A due diligence checklist is a vital instrument to ensure that every aspect of an M&A deal is covered. A thorough due diligence can assist in avoiding costly errors that could impede an acquisition or merger.
A typical due diligence checklist might include documents related to the company’s financial and legal operations Intellectual property and human resources, as well as marketing and sales data, and much more. Each checklist will differ depending on the industry and the specific requirements of the business.
Financial due diligence (also known as accounting due due diligence) is a thorough analysis of a company’s financial position which includes its accounts payable, receivable cash flow, tax-related risks. It must also include an analysis of past trends and projections, as well as the company’s ability to pay its debt and other financial obligations.
Human capital due diligence includes an in-depth examination of the company’s current and future personnel requirements. This includes the list of all employees, their salaries, job titles, skills and qualifications. It should also review the benefits plans of the company and time off policies.
Operational due-diligence is a close examination of the company’s internal processes and supply chain, its technology infrastructure, and other aspects of its business. It could also be used to assess the company’s compliance with different regulations and laws. It may also include an examination of the warranty policy of the company price policy, pricing philosophy, and estimation department.
It’s important that you keep your due diligence checklist updated as new developments occur. This will ensure buyers receive the most accurate and complete information available. Keep organized records in folders with clearly defined titles to facilitate buyers.