A buyer runs three questions on every line of an add-back schedule. Run them on your own schedule first — every line that fails question one was never yours to claim, and every line that fails question two is yours to fix, starting now. Which add-backs are defensible is a judgement your CPA makes with you; this sheet is what a buyer will ask.
| The three questions, in order | If the answer is… |
|---|---|
| 1 · Would this expense continue under a new owner? | Yes → stop. Not an add-back; it is a cost of the business. |
| 2 · Can you prove it — a schedule, an invoice, a market comparable? | No → real, but worth little until documented. Build the file first. |
| 3 · Did it also “not recur” last year, and the year before? | Yes → then it recurs. It will not survive diligence. |
| Your schedule, line by line | Q1 pass | Q2 pass | Q3 pass | Evidence attached? |
|---|---|---|---|---|
| Owner vehicle, travel, or personal expense in the P&L | ☐ | ☐ | ☐ | |
| Family member on payroll | ☐ | ☐ | ☐ | |
| Rent paid to a related entity, above or below market | ☐ | ☐ | ☐ | |
| A one-time legal, insurance, or repair matter | ☐ | ☐ | ☐ | |
| Owner compensation itself | ☐ | ☐ | ☐ | |
| (your line) | ☐ | ☐ | ☐ | |
| (your line) | ☐ | ☐ | ☐ | |
| (your line) | ☐ | ☐ | ☐ |
This sheet produces no number and no valuation — deliberately. Education, not advice: your accountant, attorney, and family make every real decision with you. Heritage Platform Group is a principal and advisor, not a broker. © 2026 Heritage Platform Group, Inc.