We signed the LOI and the buyer is demanding deep-dive data on our delivery team's historical utilization rates, but our systems do not track billable hours cleanly. How do we build a retrofitted operational scorecard to keep the deal on track without missing closing milestones?

Question

Tyler Smith · Accepted Answer

Buyers use data gaps during due diligence to sow doubt, drag out the closing timeline, and ultimately chip away at your valuation. If you do not have clean, historical timesheets to prove your utilization rates, do not try to build a messy, retrofitted tracking system from scratch. Instead, use your existing operational data to prove efficiency through output rather than input.

Build a retrofitted scorecard based on completed deliverables, project milestones, and client outcomes. Look at your past invoicing, project management systems, and client delivery schedules. For example, show the volume of tickets resolved, the number of clients served per technician, or the average turnaround time per project. Match these historical outputs against your payroll records to calculate your true operational capacity and labor efficiency.

Present this data to the buyer as a highly sophisticated output-based metric. Explain that tracking raw billable hours is an outdated method that encourages slow, inefficient work. Show them how your team focuses on execution and output, which is why your profit margins exceed industry standards. By framing your lack of traditional timesheets as a deliberate, high-efficiency operational strategy backed by clear historical output data, you satisfy their diligence requirements. This keeps your transaction moving forward along your agreed-upon timeline without letting the buyer use a lack of timesheets as an excuse to renegotiate the purchase price.