The honest answer: before you sign anything, because the LOI locks the deal
A letter of intent reads as non-binding, but commercially it is the deal: it names the price, and usually the structure, and reopening either afterwards costs goodwill, leverage and sometimes the deal itself. Those two terms, what you pay and whether you buy shares or assets, are precisely where accounting judgment moves the most money. Price should be a multiple of earnings someone has actually tested, not the broker's package; structure swings the tax outcome for both sides and decides what liabilities you inherit. Sign first and ask later, and your CPA's job quietly changes from shaping the deal to documenting a deal already shaped.
Sellers understand this asymmetry, which is why their side is usually prepared long before yours: statements tidied, earnings adjusted, a price anchored to the adjusted number. The buyer who walks into that conversation alone is negotiating against preparation with enthusiasm. The fix is not complicated and it is not expensive. It is a phone call earlier than feels necessary.
Each stage of a deal has CPA work in it, and skipping a stage has a price
The work is not one engagement but a chain of small ones, each attached to a stage of the deal, and the table is the honest map of what each stage buys you.
| Stage | What the CPA does | Hard to fix if skipped |
|---|---|---|
| Before the search | Sets your affordable price range and financing capacity; readies the purchasing structure | Months spent chasing businesses you could never close |
| Offer and LOI | Tests the seller's adjusted earnings; prices both structures; flags LOI terms to keep open | Price and structure, locked at the worst moment |
| Diligence | Runs the financial and tax review; converts findings into price, terms or walking away | Inherited liabilities discovered after they became yours |
| Financing | Builds projections and the lender package; negotiates covenants that fit the plan | A financing decline late in the process, or covenants that choke year one |
| Closing | Purchase price allocation, tax elections, closing working capital mechanics | Elections missed at closing rarely come back |
| First 90 days | Opening balance sheet, accounting setup, first lender reporting cycle | A blind first quarter in a business you just borrowed to buy |
Read the right-hand column bottom to top and the pattern is plain: the later the stage, the more mechanical the work; the earlier the stage, the more it moves the outcome. That is the whole argument for early involvement, in one table.
Before the LOI: the price basis, the structure, and what you can afford
The pre-LOI work answers three questions in rough, fast form, because speed matters more than polish at this stage. First, is the asking price built on earnings that survive scrutiny: a quick pass over the seller's adjusted numbers, testing the add-backs and the trend, tells you whether the anchor price is real before you negotiate against it. Second, which structure should the offer assume: the trade-offs in asset purchase versus share purchase are worth real money to both sides, and the LOI is the moment to claim them, or at least to keep the question expressly open. Third, can you actually carry it: a rough cash flow test showing the business covering the acquisition debt service, your salary and taxes with margin left over, which decides your walk-away price before emotion sets it for you.
This stage also sets up the LOI terms buyers routinely under-negotiate because they seem procedural: a diligence condition wide enough to reopen price if findings warrant, a financing condition matched to a realistic approval timeline, and language on how working capital will be handled rather than silence. None of that is legal drafting your lawyer cannot do; all of it depends on financial judgments your lawyer will ask you for anyway. Arriving with them answered is the difference between an LOI that protects you and one that merely starts the clock.
Between LOI and closing: diligence, the financing package, and the clauses with numbers in them
Once the LOI is signed, the CPA's work splits into two parallel tracks with a deadline on each. The first is financial due diligence: verifying the earnings, testing the revenue for concentration, reading the balance sheet, and, in a share deal, auditing the tax history you would inherit, with every finding converted into a price change, a structural protection or a reason to leave. The second is financing: lenders want financial projections that start from the debt service and prove the business covers it, a working capital plan for the first year, and a package that answers the credit committee's questions before they are asked. We build these together as business financing and projections work for Ontario buyers under Business Financing Advisory, because the diligence findings and the projections must tell the same story or the lender will notice the difference.
The same window is when the purchase agreement's financial clauses get drafted, and they deserve an accountant's eyes before signature, not after. The working capital target and its definitions decide whether the business arrives with fuel in it, and the mechanics are worth understanding in full; we walk through them in what working capital means in a business purchase. Earn-outs need definitions of the earnings they are measured on. Holdbacks and indemnities need amounts and survival periods matched to the actual risks diligence found. Lawyers draft these clauses; the numbers inside them are accounting decisions, and unpriced clauses default in the seller's favour.
Closing and the first ninety days are still part of the deal
Closing has its own short list of items that never come back if missed. The purchase price allocation across assets, negotiated rather than defaulted, sets your depreciation for years. The tax elections, the joint HST election on a qualifying asset sale, the election on purchased receivables, have filing requirements and deadlines attached to the transaction itself. And the closing working capital statement, prepared in the weeks after the deal, is a small negotiation in its own right, with real dollars moving on definitions agreed months earlier.
Then the ownership begins, and the first quarter decides whether you are running the business or guessing at it. The opening balance sheet has to be built properly in your accounting records; the reporting the lender expects, monthly or quarterly statements and covenant certificates, starts on schedule whether you are ready or not; and cash flow needs watching weekly while collections, supplier terms and payroll settle into your hands. Buyers who treat closing as the finish line meet their first covenant test unprepared. The ones who planned the first ninety days before closing simply continue a rhythm already running.
What changes the timing, and what asking early actually costs
The right moment to call depends on a few facts worth naming. How locked the LOI already is, since an unsigned draft can still be shaped while a signed one narrows the work to diligence and repair. The structure on the table, because a share purchase raises the stakes on inherited tax history and moves diligence earlier. Whether financing is needed, since lender timelines are usually the critical path and projections take time to build well. How prepared the seller is, because a polished sale package deserves an equally prepared reading. And the size of the deal relative to your balance sheet: the closer the purchase is to betting the company, the earlier the analysis should start.
Against all of that, the cost of asking early is deliberately small. A one-time consult runs $75 for thirty minutes or $150 for an hour, which is enough to pressure-test a price, flag the structure question and map the work ahead; from there, acquisition support is defined-scope work under Strategic Projects, with the fee in writing before we start, and the full path from search to closing is laid out in buying a business in Canada. The pattern we see across deals is consistent: the buyers who involved their CPA before the LOI negotiated the price down or the protections up by more than the entire cost of the engagement, and the ones who called during diligence mostly paid us to measure problems they could no longer reprice.
