The buyer's Quality of Earnings firm is auditing our books and wants to exclude the historical cost-savings from our recent AI operational automation as one-time adjustments rather than systemic run-rate savings. How do we defend these run-rate adjustments during QoE?

Question

Tyler Smith · Accepted Answer

The buyer's Quality of Earnings (QoE) firm is trained to be skeptical of any adjustments that increase EBITDA. When you claim that your AI-driven operational efficiency has permanently lowered your overhead, they will look to classify these cost savings as unproven, temporary, or contingent. To defend these run-rate adjustments, you must present the operational proof behind the numbers.

This is where your EOS® systems provide a massive advantage. You should present your Accountability Chart from both before and after the automation was implemented. This visual proof shows exactly which seats were eliminated or merged as a result of the software integration. You must also provide your documented processes to prove that the automation is institutionalized and does not rely on manual intervention.

Additionally, pull up your weekly Scorecard history to show a sustained, multi-month drop in labor costs relative to output. This operational data transforms a theoretical accounting adjustment into an undeniable historical trend.

During the QoE process, do not let your CFO fight this battle using accounting principles alone. Bring the operational reality to the table. Frame the cost savings as a permanent structural change rather than a temporary bump. By demonstrating that the new processes are fully integrated and that the team has GWC™ (Gets It, Wants It, Capacity to do it) for the new way of working, you can force the QoE firm to accept the run-rate adjustments. This protects your adjusted EBITDA and preserves your headline valuation multiple.