When to Bring a CPA Into a Senior Living M&A Deal (and Why Timing Matters)

Senior living M&A activity continues to attract investors, operators, and strategic buyers looking to grow portfolios or reposition assets. But while deals can move quickly, one of the most common—and costly—mistakes is waiting too long to involve a CPA.

At CJBS, we consistently see stronger outcomes when a CPA is brought into a senior living transaction during due diligence, not after the deal is signed. Early involvement allows buyers to fully understand the financial realities of a facility before committing capital. It also helps them to get a clearer picture of the deals they’re structuring and avoid issues that surface only once ownership has already changed hands. 

Learn more about CJBS’s dedicated senior living advisory and accounting services here.

Why Due Diligence Is the Critical Phase in a Senior Living M&A Deal

The due diligence is where assumptions meet evidence. It’s the point in a transaction when buyers have access to historical financials, operational data, reimbursement details, and expense structures. This is also when sellers’ narratives can be tested against real numbers.

A CPA’s role during this phase is to analyze, verify, and interpret that information through the lens of senior living operations. Waiting until after closing often means discovering issues when options are limited and leverage is gone.

In senior living, even small financial misunderstandings can have outsized consequences—particularly when margins are tight and labor, reimbursement, and regulatory compliance are all in play.

5 Key Financial Risks a CPA Can Identify Before Closing a Senior Living Deal

1. Revenue quality and sustainability
Revenue can look strong on paper and still be fragile. A CPA looks beyond totals and digs into how occupancy, payer mix, and reimbursement sources are actually driving results. Medicare, Medicaid, and private pay revenue are reviewed against historical performance to understand whether current assumptions reflect real operating patterns.

2. Expense structure and labor costs
Staffing is where most senior living deals feel pressure first. Payroll records, overtime trends, and agency staffing are reviewed to see whether labor costs reflect steady operations or short-term fixes that may not hold after the deal closes.

3. Cash flow and working capital needs
This is where buyers are often surprised. Even profitable facilities can run into cash constraints if collections lag or expenses come due faster than expected. A CPA evaluates receivables timing and overall liquidity to understand whether the business can support itself through the ownership transition without immediate outside funding.

4. Tax exposure and historical compliance
Tax risk tends to surface quietly. Prior filings, open items, or positions taken by past ownership can follow the buyer if they aren’t identified early. A CPA review during due diligence brings those issues into the open, when there’s still time to address them in the deal.

5. Capital expenditures and deferred maintenance
Buildings age whether they’re maintained or not. By looking at capital spending patterns alongside financial performance, a CPA can flag deferred maintenance and upcoming repair needs that may require attention sooner than expected.

The Risks of Bringing in a CPA After Closing a Senior Living Deal

When a CPA is brought in only after a transaction closes, their role becomes reactive. At that point, the buyer may already be dealing with overstated earnings, higher-than-expected operating costs, unanticipated tax exposure, or cash flow strain that impacts staffing and resident care.

Late-stage issues can push buyers into reaction mode while they are simultaneously dealing with lender requirements and regulatory review. Early CPA involvement reduces the likelihood of these scenarios.

What Buyers Should Consider When Evaluating Distressed Senior Living Properties

Distressed senior living facilities can present compelling opportunities—but they also carry heightened risk. Financial records may be incomplete, operational controls may be weak, and prior ownership decisions can leave lasting impact.

CJBS addresses these risks in more detail in this article: Should You Buy a Distressed Senior Living Facility? Key Questions to Ask and How to Uncover Deal Breakers

Reviewing financial performance, liabilities, and operational realities early is especially important when evaluating assets under stress.

How CJBS Supports Senior Living Transactions

CJBS provides specialized accounting and advisory services tailored to the senior living industry. We work with buyers, operators, and investors throughout a deal. The goal is to do the financial homework early so there aren’t surprises later.

Our Senior Living industry services are designed to support acquisition planning, transaction execution, and post-close integration, all grounded in a deep understanding of how senior living facilities operate day to day.

The Bottom Line

Financial review works best when it starts early in a senior living acquisition. Involving a CPA during due diligence provides clarity around the numbers. That clarity carries through negotiations and into the transition after closing.

If you’re evaluating a senior living acquisition—or considering a distressed asset—CJBS can help you understand the financial realities before they become expensive surprises.