There is a cost most M&A teams never put on a line item, because it’s distributed across every deal and never invoiced. We call it the spreadsheet tax: the recurring price of rebuilding the financial model from a blank workbook on every single mandate.
It’s worth quantifying, because once you see the number, the case for changing the habit makes itself.
The hidden assumption: every deal starts from zero
On most mid-market mandates, the modeling workflow looks like this. A new deal comes in. An analyst opens a prior deal’s workbook, strips out the old numbers, and starts re-keying the new target’s financials. Or — depending on how disciplined the team is — they open a blank template and build up from there. Either way, the structural work of extracting, structuring, and validating the financials happens again, in full, from scratch.
The assumption baked into that workflow is that each deal’s model is a unique artifact. It isn’t. The contents are unique. The scaffolding — three years of historical P&L, a normalized EBITDA bridge, a working capital schedule, a sources-and-uses, a returns waterfall — is close to identical across deals in the same strategy. The team rebuilds the identical scaffolding every time because that’s how it’s always been done.
Putting a number on it
Here is the math for a representative mid-market team. Adjust the inputs to your own shop; the shape holds.
| Input | Value |
|---|---|
| Mandates per year | 14 |
| Analyst hours spent building & maintaining the model per mandate | 35 |
| Fully-loaded analyst cost per hour | €110 |
| Annual hours in deal-model production | 490 |
| Annual cost in time | €53,900 |
Roughly €54,000 a year, or a quarter of an analyst’s capacity, spent rebuilding scaffolding the firm has already built dozens of times. And that’s the conservative reading, because it only counts the build. It doesn’t count the maintenance drag of keeping each model in sync with a moving data room, or the rework when a buyer’s diligence team finds a number the model never caught up to.
The number that actually matters
€54,000 in time is not the interesting figure. The interesting figure is what those 490 hours represent in deal terms.
A mid-market team is almost always capacity-constrained, not demand-constrained. The binding limit on how many mandates a firm runs is rarely the market — it’s how many deals the team can carry at once without quality slipping. Modeling is one of the heaviest fixed costs inside each of those deal-slots.
So the spreadsheet tax doesn’t just cost money. It costs throughput:
- The marginal mandate a team turns down because it’s already at capacity
- The buyer question that takes two days to answer because the model has to be reconciled first, in a process where the firm that answers in two hours sets the tempo
- The pitch a partner doesn’t make because the analyst who would staff it is heads-down rebuilding a working capital schedule that looks exactly like the last four
In a competitive market for mandates, throughput is the whole game. A team that recovers a quarter of its analyst capacity isn’t 25% more efficient — it’s able to run the deals, and win the bake-offs, that the slower team never gets to.
Why teams keep paying it
If the tax is this large, why is it so widely tolerated? Three reasons, all rational in isolation.
It’s invisible. No one gets a bill for it. The hours are absorbed into “the cost of doing a deal,” so the line never gets scrutinized the way an external spend would.
Reuse feels risky. Inheriting a model means inheriting its errors. A junior who builds from scratch at least knows what every cell does. Reuse without traceability is how a stale assumption from Project Atlas ends up in Project Borealis. So teams rebuild because they can’t trust inherited work — which is a tooling problem dressed up as a discipline.
The standard lives in people, not systems. The firm’s modeling conventions are carried in two or three senior analysts’ habits. There’s no structural way to apply them automatically, so they get re-applied by hand, deal after deal.
What removing the tax looks like
Removing the spreadsheet tax doesn’t mean automating judgment. It means the scaffolding — extraction, structuring, normalization, source-tracing, keeping current with the data room — stops being rebuilt by hand on every deal and starts being produced as a consistent, auditable foundation the analyst reviews and then builds judgment on top of.
The test is simple: on the next mandate, how much of the model is genuinely new thinking, and how much is the team retyping work it has already done a dozen times? Most teams are surprised by the ratio. The gap between those two numbers is the tax — and it’s recoverable.
NaS_OS produces a structured, source-traced financial model on each deal automatically from the data room documents, so analysts review and refine instead of rebuilding from a blank sheet. If you want to see what your own spreadsheet tax looks like, apply for access.