How a Search Fund Operator Rebuilt an Acquired Company's Books in 60 Days
Sam's List Editorial | 2026-06-23
How a Search Fund Operator Rebuilt an Acquired Company's Books in 60 Days The day after closing on the business, the operator opened the QuickBooks file and stared at a chart of accounts that put office supplies and freight in the same general ledger bucket. Featured firm System Six A Sam's List accounting firm built for acquisition entrepreneurs, multi-location operators, and modern service businesses — cloud bookkeeping, controller support, and fractional CFO work that gives owners clean numbers by service line, location, and entity. View profile → This is a search fund accounting cleanup case study — an illustrative composite, not a real client file — that shows what changes when the new owner stops accepting the seller's books as the starting point and rebuilds them as a deliberate construction. The numbers are constructed for teaching. The pattern is one most ETA operators hit on day one. The short version: a search-fund operator inherited a $9M distribution business with cash-basis books, no department-level reporting, and an SBA loan with covenant filings due in 90 days. The first 60 days were spent rebuilding the chart of accounts, converting to accrual, and setting up the reporting cadence that would make the next two years navigable. Product-line P&L showed one line was running negative margin. The decision to discontinue it lifted blended margin four points. The cleanup wasn't optional. It was the moment the business started being run instead of inherited. The setup behind this search fund accounting cleanup case study Call the business HardyParts. A regional industrial distribution company, 18 years old, $9.2M trailing twelve-month revenue, sold to a search-fund operator in March via an SBA 7(a) loan covering most of the purchase price. The seller had run the business as a sole proprietor's mindset wrapped inside an S-corp. The books reflected it: cash-basis, single revenue line, "supplies" account holding everything from packaging to office paper, owner reimbursements scattered across the P&L, no department or product-line tagging anywhere. The seller's bookkeeper had been with the business for eleven years. She knew where everything was — which was exactly the problem. The operator's first 90-day plan called for a monthly close by the end of June. That meant the chart of accounts, the basis conversion, the lender package, and a working management report all had to be in place in 60 days. Why the books needed a rebuild, not a touch-up A retouched chart of accounts inherits the seller's blind spots. The categories that hid what the seller...
