We recently automated our client onboarding which cut our service delivery time in half, but the buyer's Quality of Earnings provider is refusing to run-rate this savings because it occurred in the last ninety days. How do we force them to recognize this run-rate EBITDA adjustment in our final valuation?

Question

Tyler Smith · Accepted Answer

A buy-side Quality of Earnings provider is paid to be skeptical and will naturally try to dismiss recent margin improvements as temporary blips. To force them to recognize this run-rate EBITDA adjustment, you must bridge the gap between financial statements and operational reality. Do this by presenting concrete operating data straight from your EOS scorecard. Show them the weekly metrics from your Level 10 Meeting history. This should prove that the reduction in onboarding time has remained consistent over the last twelve weeks.

You must also provide a detailed bridge analysis that shows the direct reduction in labor hours per onboarded client, multiplied by your current hourly fully-burdened labor rates. Under standard valuation approaches like IVS 105, adjustments for permanent operational changes are entirely appropriate if they are verifiable and recurring.

Show that this efficiency is structural, not a temporary spike. If your team is handling double the volume with the same headcount, demonstrate that you do not need to hire to support your current revenue run-rate. By proving the automated onboarding process is fully institutionalized within your EOS Accountability Chart, you change the conversation from speculative projection to historical fact. This forces the buyer to calculate your enterprise value based on your actual, optimized run-rate profitability rather than outdated historical averages.