# Proof of cash

A diligence test that ties reported revenue to money in the bank.

It catches the two things a tax return cannot show: revenue booked that nobody ever paid, and cash taken out before it reached the statements. A [quality of earnings](https://searchspheresource.com/glossary/qoe) engagement runs it as a matter of course, and it is the single procedure most worth paying for on a business whose books are kept on a [cash basis](https://searchspheresource.com/glossary/cash-basis-vs-accrual) by the owner's spouse. Do not confuse it with [proof of funds](https://searchspheresource.com/glossary/proof-of-funds), which is the opposite direction: that is what a broker asks YOU for before showing a listing.

In numbers: A seller reporting $2.4M of revenue whose deposits total $2.1M over the same twelve months has a $300k question to answer before any multiple is applied.

Source: https://searchspheresource.com/glossary/proof-of-cash
Not dated: A definition is editorial: what a term means, why it matters, and an example. None of it reads a source that can go stale, so there is no date to take and a stamped one would be the build time wearing a costume.

Site index for machines: https://searchspheresource.com/llms.txt