Pillar Optimization Partners Blog

The Clean Financials Advantage

Written by Ross Armstrong | Oct 22, 2025 4:10:24 PM

"Our books are clean."


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Most owners believe this.

Most are wrong.

Clean books and buyer-ready books are different things.

Clean books: Revenue and expenses are accurate. Taxes are filed. Nothing illegal.

Buyer-ready books: Adjusted EBITDA is clearly calculated with written justifications. Owner compensation is separated into market salary vs. distributions. One-time expenses are identified and explained. Capital expenditures show patterns, not chaos. Working capital is optimized and predictable.

The gap:

We've seen businesses with "clean" books that took three months to get buyer-ready.

Why? Because clarity matters more than accuracy.

Not sure if your business is exit ready? Take our 5-minute Exit Readiness Assessment.

A buyer can't understand your $2.3M EBITDA if it includes:

  • Your $400K salary (market rate is $180K)
  • Your kid's $75K salary for minimal work
  • $50K in "consulting" that was actually distributions
  • $35K in one-time legal fees
  • Your personal vehicle expenses

All legal. All accurate. All confusing.

The fix:

Use adjusted EBITDA from Day 1. Show what a buyer would actually earn.

Separate owner compensation into market salary + distributions.

Track add-backs monthly, not at year-end scrambling.

Keep personal expenses out of the business.

Show your financials to your CPA and ask: "Could a buyer understand these in ten minutes?"

If not, simplify.

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The premium:

Businesses with buyer-ready financials close 40% faster and command 0.5-0.8x higher multiples.

Because buyers pay for certainty. Confusion creates discount.

Clean up your books today. Your future buyer will pay you for it.

Download the exit ready checklist here.