Due Diligence
Proof of Cash
A reconciliation that ties a business's bank deposits to its reported revenue, used during due diligence to confirm that stated sales reflect actual cash received.
A reconciliation procedure that matches bank deposit records against reported revenue figures to confirm that stated sales correspond to actual cash received. Performed during financial due diligence, typically by comparing monthly bank statements to the income reported on tax returns and profit-and-loss statements. Discrepancies between deposits and reported revenue may indicate unreported income, revenue inflation, or recording errors. Considered one of the most direct methods for verifying revenue quality in a small business acquisition. (Also see: Due Diligence, QOE Report, Revenue Quality.)