Being a potential buyer or investor in an acquisition or merger or an investment transaction involves extensive review and an in-depth examination of a variety of documents. This can often be time-consuming, especially when parties are examining a large amount of information in a variety areas of due diligence, such as human capital, financial assets, intellectual property, and tax. To avoid confusion and decrease the risk of missed items, it is crucial to prepare a comprehensive list of all the documents that must be requested during the review process.
A thorough business due diligence checklist can assist an individual to pinpoint important information and ensure all aspects of the review are covered. For instance the human capital portion of a review would look at the employees and employees, their salaries and benefits. This may include a breakdown of salaries by location of employees as well as a comparison of the salaries of individuals working in similar positions within their industry or region. It also will examine the business’s policies, procedures and procedures for hiring, firing, compensation, incentives, sick leave, vacation contracts and the severance process.
Many of these areas of due diligence will require the input of specialists and external consultants. To avoid delays, miscommunications and duplicates of work, it is best to establish a deadline for the review. Using a CRM like DealRoom can help speed up the process through providing a central repository for all documents, communications, and tasks to be streamlined.