customer due diligence services

Best Wishes for your decision to buy a business, merge with a business or invest in someone else’s company. It is really an exciting and thrilling experience.

You might be busy to understand the business goals, marketing strategies and work operation to know how you can run it better than the previous owner.

It doesn’t matter whether you are purchasing a large MNC or a retail store. There is one thing that you should consider seriously is conducting a due diligence.

What is the importance of a due diligence?
In a very simple manner, due diligence is a process in which a potential buyer investigates, inquires or analyzes the business to verify the accuracy of the information shared by the seller. It is known as 3rd party due diligence or Customer Due Diligence Services.

Buying a new business is risky. With due diligence, it is cross checked that the sellers are who they say.

Services Offered under Due Diligence
A professional investigation company is responsible to find out several aspects of the business so that you can make final commitment to invest.

Legal Due Diligence
A meet is organized with the business’s lawyer to ask for all the present and past legal actions and claims of the company. Here the goal is to measure the legal risks the company has faced or is facing. Is there any legal action that has ended in a judgement against the firm? What is the maximum exposure? What is the charge the lawyer is taking to represent the firm? All the shared legal information of the third party including shareholders agreement, leases, purchasing agreement, client agreement and loan agreements needs to be verified.

Financial Due Diligence
Here the company’s assets need to be cross examined. You cannot buy a company which is in debt or is not doing financially well. Therefore, ask for petty cash and bank statements.

Ask for the list of the customers to know who have not been paid yet or how long they have not paid. Pay your focus on large overdue. Cross verification is required to match that their balance agrees with the company’s balance list.

Inquire is conducted on the loan status of the company. Check the payment schedule, outstanding balance and loan rate.

A due diligence expert is liable to discover if there is any liability not disclosed by the seller.