Common Revenue Recognition issues we see in SMB Due Diligence

We were recently discussing with our QoE project managers the main themes that keep coming up in SMB deals and thought it could be useful to share them with this community. Revenue recognition and sales quality consistently show up in our Top 5. @redacted‌ has more than 10 years of experience in this field, with roles at KPMG, PwC, and for the last three years at Centurica. He mentioned that this is one of the areas where we most frequently see adjustments during diligence. A few examples that show up often: 1. Annual subscriptions recorded as revenue when cash is received, instead of being recognized monthly. 2. Amazon / Shopify sales recorded manually through journal entries rather than integrated systems. 3. Returns or discounts recorded in the wrong period, distorting TTM numbers. 4. Customer concentration not clearly identified early on. 5. Sales platforms not reconciled to the accounting system (very often QuickBooks). 6. Missing bank or platform reconciliations, which can materially affect revenue accuracy. Most of the time these issues aren’t intentional and are just the result of processes that didn’t evolve as the business grew. Curious if others here have run into similar revenue issues during diligence, or if there are other common ones you’ve seen.