In brief: Verify reported revenue against original payment, bank, billing or marketplace records and reconcile it to the seller's financial statements.
Start with the ledger or P&L
Understand how the seller defines revenue and which period is being presented, then reconcile the total to underlying records.
Match to source systems
- Bank statements
- Payment processors
- Billing platforms
- Marketplace dashboards
- Affiliate or advertising partner statements
- Accounting software
Look for gross versus net confusion
Make sure refunds, taxes, marketplace fees, discounts and pass-through amounts are treated consistently. High gross receipts do not automatically mean high economic revenue.
Check concentration and recurrence
Revenue quality changes when one customer, one channel or one temporary promotion dominates. Separate recurring, repeat and one-time components.
Tie revenue to the purchase agreement
Material representations about revenue, customers and financial condition should be handled in the transaction documents with appropriate professional advice.