Financial modelling that survives due diligence

Financial inconsistency is the fastest way to erode a valuation or derail a transaction. Not fraud, and rarely anything dramatic. Usually it is a forecast that does not reconcile to the management accounts, a working capital assumption nobody can defend, or a model that breaks the first time an investor changes a variable.

We build the financial infrastructure that a mid-market business needs when someone from outside is about to examine it properly.

Why the numbers fail under scrutiny

Owner-managed businesses usually have accurate numbers and inadequate architecture. The information exists but sits across several spreadsheets, depends on one person to interpret, and has never been asked to answer a question it was not built for.

Diligence tests exactly that. An acquirer or investor will ask what happens if revenue falls twelve per cent, what the cash impact of thirty days of additional debtor days would be, and how last year’s adjusted EBITDA reconciles to statutory profit. A model that cannot answer quickly does not merely delay the process. It changes the buyer’s view of management.

What we build

A fully integrated three-statement model linking profit and loss, balance sheet and cash flow, so a change in one flows correctly through the others.
Scenario and sensitivity analysis, with a downside case that has been genuinely stress-tested rather than assumed away.
A KPI framework covering the ten to fifteen measures that actually drive value in your business, rather than the forty that are merely measurable.
Monthly management reporting and a board pack that a non-executive or investor can read without a translator.
Covenant and headroom modelling where debt facilities are in place or contemplated.
Reconciliation of adjusted earnings to statutory accounts, with each adjustment evidenced and defensible.

Modelling for a decision, not for a folder

A model built for filing is a different object from a model built for deciding. Most of our work is commissioned because a specific decision is imminent: whether to take on a facility, whether an acquisition works at the asking price, whether the business can fund a second site from operating cash, or what a founder would actually realise under competing deal structures.

We build to answer the question in front of you, and we build so the model remains usable afterwards by your own finance function.

Diligence readiness

Where a transaction is in prospect, the objective is narrower: reduce the volume and severity of diligence queries. Well-prepared financial information typically cuts diligence questions by around forty per cent, which shortens the process, reduces professional fees on both sides, and removes the accumulation of small unanswered questions that buyers eventually convert into a price adjustment.

When you need capacity as well as a model

Some businesses do not have a modelling problem so much as a seniority gap. There is a capable finance team producing accurate history and nobody with the experience to interpret it forward, sit opposite an investor, or run a transaction alongside the day job. Where that is the case, we can provide senior finance capability on a fractional basis, scaled to what the business genuinely needs rather than to a full-time salary.

What this looks like in practice

(client example — anonymised)

We recently supported the management team of a specialist technology business through a management buyout. Completing the transaction meant raising £1.5m of debt funding, and the lender’s credit committee would not commit without a rigorously stress-tested forecast proving the standalone business could service the facility while still holding enough working capital to operate normally.

We built a fully integrated three-statement model with the management team: monthly, multi-year, and linking profit and loss, balance sheet and cash flow so every assumption flowed through consistently rather than living in isolation. Working from the historical trading data, we identified the KPIs that actually drove this business, then layered in the covenant tracking and downside sensitivity scenarios the lender needed to see repayment capacity holding even if trading fell short of plan.

The model gave the credit committee the transparency and rigour it needed to proceed with confidence. The £1.5m facility was approved, the buyout completed on schedule, and the management team moved into the next phase of growth with a model built to keep working, not to be retired the day the deal closed.

Common questions

We already have an accountant and a bookkeeper. Why would we need this? Bookkeeping and statutory accounts look backwards and satisfy compliance. This work looks forwards and satisfies an investor, a lender or an acquirer, which is a different standard of evidence entirely.

How long does a model take to build? A full integrated model for a mid-market business is typically three to five weeks depending on data quality and the number of trading entities.

Will our finance team be able to maintain it? Yes. We build in Excel, document the assumptions, and hand over with a working session. A model only your adviser can operate is a liability.

Can you work with our existing model? Often. We will review it first and tell you honestly whether it is better to rebuild or to strengthen what exists.

Do you offer fractional CFO support? Yes. Senior finance expertise scaled to need, without a full-time cost. This suits businesses that need experience at the board table rather than another pair of hands in the ledger.