Proof of cash is one of the most important procedures in financial due diligence.
Unfortunately, it is also one of the most manually intensive and that is becoming a serious problem for diligence teams.
Most firms still perform the proof of cash using spreadsheets. That approach worked when transaction volumes were manageable, bank account structures were simple, and deal timelines were forgiving.
None of those conditions exist today.
Over the past decade, several structural shifts have changed how cash moves through businesses:
At the same time, the economic consequences of cash-related diligence errors have increased.
Working capital purchase price adjustments are now standard in private-target M&A transactions. According to SRS Acquiom’s 2025 Working Capital Purchase Price Adjustment Study, these adjustments appear in more than 90% of private-target deals.[1]
That means proof of cash findings routinely translate into real purchase price outcomes.
A single operating account can generate hundreds of thousands of transactions per year.
Now multiply that across:
A spreadsheet-based approach to the proof of cash requires humans to make thousands of repetitive classification decisions under time pressure. This approach does not scale, and review fatigue introduces real risk.
Inter-account transfers inflate transaction volume and introduce double-counting risk.
In manual workflows, transfer matching typically relies on:
As the number of accounts increases, this approach becomes increasingly unreliable. Missed or misidentified transfers distort both inflows and outflows — exactly what the proof of cash is intended to prevent.
Certain cash movements materially affect liquidity but do not appear on the income statement, including:
These items are just a few of the accounting that naturally create gaps between accrual earnings and cash behavior. Manual processes make it easy to miss or misclassify them, weakening the explanation of cash variances to buyers.
As manual proof-of-cash workloads increased, many U.S. firms attempted to solve the problem through labor arbitrage by outsourcing cash proofs to lower-cost countries.
On paper (or the whiteboard), the math looked compelling:
In practice, the results have fallen well short of expectations.
What is rarely acknowledged inside firms is this:
The true cost of a proof of cash is not the outsourced labor cost. It is the rework performed by U.S. staff when the proof does not reconcile within a tolerable threshold in addition to the outsourced labor cost.
That rework includes:
These hours are often:
As a result, firms systematically understate the true cost of outsourced proof of cash.
Even when outsourced teams produce technically “complete” work, two structural issues remain:
Outsourced proof-of-cash work often takes days to return:
In live deal environments, those delays matter.
PwC notes that purchase price mechanics tied to cash, indebtedness, and working capital are often finalized 60 to 90 days after close, when disputes and clarifications surface most acutely. [2]
Every single day of delay when a deal is “live”:
Proof of cash is not a data-entry exercise only.
It requires:
Outsourced teams—no matter how capable—lack proximity to:
As a result, U.S. professionals often end up redoing judgment-heavy portions of the work anyway.
When firms account honestly for:
The promise of labor arbitrage for proof of cash largely evaporates.
What looked cheaper per hour often turns out to be more expensive per engagement.
At Audit Sight, we built our platform to eliminate manual work for auditors, diligence providers, and private equity professionals by automating financial transaction verification.
Proof of cash was a natural focus because it sits at the intersection of:
Automation changes the equation entirely:
Audit Sight clients consistently report material reductions in manual hours per engagement and improved realization as a result. [3]
Manual proof of cash is not failing because CPAs are incapable.
It is failing because:
And the true cost of rework, delay, and risk has been quietly ignored.
Cash, working capital, and debt drive real purchase price outcomes. Proof of cash is too important to rely on fragile workflows, whether performed domestically or offshore.
Automation does not replace professional judgment. It removes the friction that prevents that judgment from being applied where it matters most.
If your team is still building cash proofs manually, or outsourcing them and hoping for the best, it may be time to rethink what “efficient” really means.
[1] SRS Acquiom, 2025 Working Capital Purchase Price Adjustment Study
https://www.srsacquiom.com/our-insights/2025-working-capital-purchase-price-adjustment-study/
[2] PwC, Better Negotiations of Post-Closing Price Adjustments: Closing Accounts
https://www.pwc.com/us/en/services/consulting/deals/library/closing-accounts.html
[3] Audit Sight, Customer Outcomes and Platform Overview
https://www.auditsight.com/
