Due Diligence is the process by which investors obtain an independent appraisal of your business.
It is a term that external financiers use to define the process of fully investigating businesses seeking financing from them. It covers the necessary accounting and financial issues to provide an expert opinion on the assets and liabilities of the investee company. In addition, a thorough due diligence needs to provide the investor with a holistic view of the business and therefore needs to go further into marketing, products etc. The due diligence activities normally involve the following areas:
- Commercial performance
- Business Strategy
- Products/ Services validation Assessment
- Resources and processes
- Human Resources
- Intellectual Property
- Sales and Marketing methods and strategies
- Brand Strategies
- Customer Needs
The scope of the work required is always determined in conjunction with the client. The client may want the review to be limited to a number of areas, dealing with other key areas themselves, or may ask us to conduct a full scope review, providing an in-depth analysis of the business.
Due Diligence is not an audit. It looks forward with the business and not just at historical financial information. Typically it will involve the review of the auditors and ta advisers files, in depth discussions with management of the target if appropriate, the analysis of information provided by management and the gathering of independent evidence such as market research reports. The due diligence process could also include review of the audit of completion accounts, drawn up to the date the deals are completed.
Under our structured approach, we make sure that we clearly understand the clients requirements from the outset yet remain responsive to any changes and concentrates on key issues, allows for effective monitoring of the due diligence process, minimizes costs on assignments and ensures no time is diverted by any factual misunderstandings.