“How long will this take?” is the first question every CEO asks when someone tells them their data is not ready for diligence.
The honest answer is it depends. But that is not helpful. So here are the real ranges based on what I have seen across dozens of PE-backed companies preparing for exits.
The timeline depends on three things: how bad the current state is, how much resource you can dedicate, and how much risk you are willing to accept when diligence starts.
Factors that determine your timeline
Before picking a path, be honest about where you stand.
How many systems are involved? A company running on one ERP with an integrated CRM is in a fundamentally different position than a company with seven systems connected by spreadsheets. Each additional system adds reconciliation complexity.
Has there been a system migration in the last 24 months? Migrations create data continuity breaks. Bridging historical data across system changes is one of the most time-consuming parts of preparation.
How many acquisitions have been integrated? Buy-and-build portfolios have the hardest data readiness challenge. Each acquisition brings a different system, different definitions, and different data quality levels.
Who is doing the work? If your controller is also your data readiness lead, and they are also closing the books every month, progress will be slow. Dedicated resource (even part-time) makes a significant difference.
What is the tolerance for remaining issues? You do not need to fix everything. You need to fix the things that would cause adjustments, delays, or loss of buyer confidence. Knowing which issues matter and which do not is part of the assessment.
The 12-month ideal path
This is the gold standard. Enough time to do it right without heroics.
Months 1 through 2. Assessment.
Run an internal audit against the data diligence checklist. Answer the 15 questions buyers ask. Document every gap. Prioritize based on deal impact.
Deliverables: Gap assessment document, prioritized remediation plan, resource requirements.
Months 3 through 5. Foundation.
Fix the critical reconciliation issues. Revenue by customer should match revenue by product should match the GL. Customer counts should be consistent across systems. EBITDA adjustments should have clean documentation trails.
Start documenting KPI definitions, data flows, and close processes. Cross-train at least one additional person on key reporting.
Deliverables: Monthly reconciliation process, KPI dictionary, data flow diagram, adjustment documentation templates.
Months 6 through 9. Remediation.
Address the second-tier items. Historical data bridging, customer segmentation analysis, unit economics by segment, data security documentation. Build the reports and analyses the diligence team will request.
Deliverables: 36-month historical data in consistent format, segment P&L, customer cohort analysis, data security policy.
Months 10 through 12. Testing and polish.
Run a mock diligence. Have someone outside the core team make data requests and time the response. Fix what breaks. Update documentation. Make sure the team is confident and rehearsed.
Deliverables: Mock diligence results, updated documentation, response playbook, trained team.
At the end of 12 months, you should be at Level 2 readiness (efficient, documented, repeatable) and able to respond to most diligence requests within 48 hours.
The 6-month accelerated path
The exit timeline moved up. Or you just started paying attention. You have half the time and need to be strategic about what gets fixed.
Months 1 through 1.5. Rapid assessment.
Same assessment as the 12-month path but compressed. Focus on the items that carry the highest dollar risk in a QoE. Revenue reconciliation, adjustment documentation, and customer metrics are usually the top three.
Deliverables: Prioritized gap list (top 10 items only), remediation plan with named owners and deadlines.
Months 1.5 through 4. Focused remediation.
Fix the top 10 items. Nothing else. Resist the urge to improve things that are working adequately. Every hour spent on a nice-to-have is an hour not spent on a deal-critical issue.
The priority order is usually: revenue reconciliation, EBITDA adjustment documentation, KPI definitions and consistency, customer segmentation, key person cross-training.
Deliverables: Monthly reconciliation process, adjustment documentation, KPI dictionary, at least one cross-trained team member.
Months 4 through 6. Documentation and testing.
Document everything you fixed. Run a focused mock diligence on the areas you remediated. Prepare honest responses for the items you did not have time to fix.
The key insight here is that knowing about your remaining issues and having a plan for them is almost as valuable as fixing them. A company that says “we identified this gap, here is the impact, and here is our 90-day remediation plan” earns more trust than one that claims everything is fine and gets caught.
Deliverables: Data flow diagram, mock diligence results, response preparation for known gaps.
The 3-month emergency path
This is triage. You cannot fix the underlying issues. You can control the narrative and minimize damage.
Weeks 1 through 2. Crisis assessment.
Identify the three issues most likely to trigger QoE adjustments or slow diligence. Typically: revenue reconciliation gaps, undocumented adjustments, and inconsistent customer metrics.
Deliverables: Top 3 risk areas identified with estimated dollar impact.
Weeks 3 through 8. Targeted fixes.
Fix what you can. For revenue reconciliation, build the bridge even if it is manual. For adjustments, create the one-page summaries with supporting data. For customer metrics, align the definitions and produce the analysis.
Simultaneously, document everything else. You may not be able to fix the data security policy gap, but you can acknowledge it and have a plan. You may not be able to bridge 36 months of historical data, but you can bridge the last 18 and explain the break.
Deliverables: Revenue reconciliation, adjustment documentation, customer analysis, honest gap disclosure with remediation plans.
Weeks 9 through 12. Rehearsal.
Practice. Run through the likely diligence questions with your team. Make sure everyone tells the same story. Prepare responses for the issues you know exist. Time the team on key data requests.
Deliverables: Response playbook, rehearsed team, realistic timeline estimates for open items.
What if you have less than 3 months?
Accept that data will be a finding in the diligence report. Focus on two things.
Control the narrative. Proactively disclose the issues you know about. Frame them with context, impact, and your plan to address them. A buyer who discovers issues feels deceived. A buyer who hears about issues from you feels informed.
Protect the critical numbers. Make sure your revenue, EBITDA adjustments, and customer metrics are defensible even if not perfect. These are the numbers that drive the multiple. Everything else is negotiable.
The worst outcome is a surprise. Even at this stage, an honest assessment and a prepared response are worth more than pretending everything is fine.
The real cost of waiting
Every month you delay starting this work costs you in one of three ways.
Slower diligence. Unprepared companies add four to eight weeks to the diligence process. At mid-market deal sizes, the legal and advisory fees alone for those extra weeks run into hundreds of thousands of dollars.
Management distraction. When data requests pile up during diligence, your leadership team stops running the business and starts chasing data. Revenue and operations suffer at exactly the moment you need them to perform.
Lower multiple. Buyers price data risk. If diligence surfaces issues that suggest the numbers are unreliable, the buyer either adjusts the price, adds holdbacks, or walks. For more on the math, see How Data Problems Cost One Company Half a Turn.
Start now. Whatever path you choose, you will wish you started earlier.
For the full checklist of what to prepare, see The Complete Data Diligence Guide. For a quick readiness test, try The 48-Hour Test.