If you're buying a small business, the seller's P&L is a story. A Quality of Earnings (QoE) report is the fact-check. Here's what every searcher needs to know before writing a check. **What a QoE Actually Does** A QoE is an independent financial analysis — typically run by a third-party CPA firm — that validates whether the seller's claimed EBITDA is real, repeatable, and transferable. It's not an audit. It's a forward-looking lens on historical cash flows. **The Four Things That Should Keep You Up at Night** 1. **One-time revenue spikes.** A government contract that expired in 2024, a pandemic-era windfall, a single customer who represented 40% of revenue. QoE analysts strip these out to reveal normalized earnings. 2. **Owner add-backs.** Sellers routinely add back personal expenses — vehicles, travel, family salaries. Some are legitimate. Some are aggressive. Scrutinize every line. 3. **Working capital traps.** A business showing strong EBITDA can still bleed cash if receivables are bloating or inventory is building. QoE surfaces these timing mismatches before they become your problem. 4. **Customer concentration.** If the top three customers represent more than 50% of revenue, your multiple should reflect that risk — or you walk. **When to Order One** For any deal above $1M in enterprise value, a sell-side or buy-side QoE is non-negotiable. Expect to spend $8,000–$25,000 depending on business complexity. That cost has saved searchers from multimillion-dollar mistakes more times than anyone wants to admit. **The Bottom Line** The goal isn't to kill deals — it's to buy with conviction. A clean QoE gives you leverage in negotiations, confidence with lenders, and a defensible basis for your purchase price. Trust the numbers. Verify everything else.