What are add-backs, and which ones count?
Short answer
Add-backs are costs added back to profit because a new owner would not have them. Buyers accept the ones you can document and reject the rest.
What to know
- Common ones: owner salary above market, personal expenses, one-time legal or moving costs.
- Every add-back needs a paper trail.
- Aggressive add-backs erode trust and get cut in diligence.
What to do next
- 1List each add-back with the amount and reason.
- 2Attach support like invoices or payroll records.
- 3Have your accountant review the list.
Last reviewed September 2026 by the Horizon team. General information, not legal, tax or financial advice.