Due Diligence Cheat Sheet

A quick and dirty bullet point list to prepare for your Due Diligence.

Photo by Glenn Carstens-Peters on Unsplash

The Due Diligence process is conducted by prospective investors in or potential buyers of your business to ascertain the credibility of your financial statements and projections.

You will have to justify the values on your Balance Sheet, Income Statement, and Cash Flow Statement. Depending on your industry, further information might be needed about HR, Production Processes, Q&A Processes, Health & Safety Policies, Regulatory Compliance, or more.

Without further ado, here are the documents you need to prepare and the things you need to look out for.

CURRENT ASSETS

CASH & CASH EQUIVALENTS

• Bank statements
• Record of petty cash on hand
• Summary of available liquidity at a given date. This must tie in with your Cash Flow Projections.

ACCOUNTS RECEIVABLES

• List of outstanding Trade Debtors, outlining amounts overdue. Split between local and international debtors (to see exposure to foreign currencies).
• If a client is also a stakeholder in your company (shareholder, subsidiary or parent company, partner…