Due diligence is a crucial part of ensuring that a merger or acquisition is acceptable to the new owner. This involves examining the financials and other aspects of the target company to ensure that the deal is in good hands. Due diligence can be a lengthy and exhausting process. To make the most of it, it’s crucial to work with a thriving team of experts from different business functions.
The first step in due diligence is to look over general records and documents to understand the structure of the company from an organizational standpoint. This includes click this assessing ownership and if there are any compliance or regulatory issues. It is important to know the culture of the company and its the leadership.
Due diligence also includes assessing the credibility of key business processes and their documentation. This focuses on how often business process tests are carried out, and whether the documentation related to these tests are revised frequently. It is also essential to determine if the company has prepared for unexpected changes in its operations. This is a matter of assessing the ability of employees to adapt to an entirely new business model, and how they will be supported.
It is also essential to evaluate the efficacy of escalation processes. This involves the identification, reporting and resolution of issues, and ensuring third-party vendors follow escalation protocols. This is vital to prevent problems that can impact your business, especially in highly-regulated industries.
