Due diligence is the process where a buyer verifies everything you’ve told them about your business. Being well-prepared dramatically reduces time, friction, and the risk of price adjustments.
Here’s what buyers will request, organised by category.
Financial Due Diligence
- Three years of audited or reviewed financial statements
- Monthly management accounts for the current year and prior two years
- Normalisation adjustments schedule with supporting documentation
- Revenue breakdown by customer, product/service, and geography
- Aged debtors and creditors reports
- Working capital analysis (12-month trend)
- Capital expenditure history and forward plan
- Tax returns for three years (income tax, BAS, FBT)
- Details of any ATO disputes or outstanding assessments
- Bank statements (12 months)
- Loan agreements and facility documentation
- Intercompany transactions and related-party dealings
Legal Due Diligence
- Company constitution and shareholder agreements
- Register of members and share structure
- All material contracts (customer, supplier, partnership)
- Lease agreements (premises, equipment, vehicles)
- Employment contracts for all staff
- Intellectual property registrations (trademarks, patents, domains)
- Licences, permits, and accreditations
- Outstanding or threatened litigation
- Insurance policies and claims history
- Privacy policies and data handling procedures
- Terms and conditions of trade
Operational Due Diligence
- Organisation chart and reporting structure
- Key customer list with revenue, tenure, and contract status
- Key supplier list with terms and alternatives
- Inventory reports (current, slow-moving, obsolete)
- Asset register (plant, equipment, vehicles)
- Technology systems and software licences
- Standard operating procedures
- Quality certifications (ISO, HACCP, etc.)
- Maintenance and service records for key assets
HR and People
- Employee list with roles, salaries, tenure, and leave balances
- Enterprise agreements or award coverage
- Contractor agreements
- Bonus, commission, and incentive structures
- Staff turnover data (3 years)
- Training records and professional certifications
- Workers’ compensation claims history
- Workplace health and safety policies and incident reports
- Any outstanding employee disputes or claims
Compliance and Environment
- Environmental assessments or audits
- Regulatory compliance history
- Building and planning approvals
- Fire safety and occupancy certificates
- Food safety certifications (if applicable)
- Dangerous goods licences (if applicable)
How to Prepare
Start early. Begin assembling these documents 3-6 months before going to market. Missing documents slow the process and erode buyer confidence.
Use a virtual data room. Organise everything in a secure virtual data room (Ansarada, Datasite, or even a well-structured Google Drive) with clear folder structure.
Be transparent. If there are issues, disclose them proactively. Surprises discovered in due diligence are far more damaging than issues disclosed upfront.
Work with your advisor. Your corporate advisor will help you identify and address gaps before buyers see them.