Seller evidence · Before you sell
How sellers can prove add-backs before going to market
Published · Reviewed by The Diligence Standard Team · Updated
For every add-back, identify the ledger entry, amount, period, supporting document and post-close treatment. If work or resources must be replaced, present the replacement cost rather than claiming the entire expense disappears.
A realistic transaction story
A printing-business owner added back a family salary of $85,000. The family member handled bookkeeping, purchasing and scheduling. A buyer accepted that the salary was discretionary but included $55,000 for replacement labor.
What the evidence changed
The relationship supported an adjustment; the continuing work limited its amount.
What to check
- Write down the exact claim and who supplied it.
- Ask what was independently tested, by whom and under what scope.
- Prepare an add-back schedule that distinguishes removable payment from continuing business function.
- Translate any unresolved gap into cash, price, terms, timing or a decision not to proceed.