Accelerated Financial Due Diligence: How to Complete a Financial Due Diligence in Just 7 Days

Most due diligence firms commit to a three-week timeline to render a Financial Due Diligence (FDD) report. However, with the right approach, it’s possible to complete a thorough due diligence process in just 7 days. Here’s how.

CPA (Adv.) Gilad Finkelstein

Preface

Time is money – especially when it comes to mergers and acquisitions (M&As) and transactions in general. While the buyer’s interest is to speed up the process, the target company’s management may want to take its time. It’s a delicate balance, but with the right approach, it’s possible to significantly shorten the due diligence schedule – to 7 days.

1. Working as a Legal Force

What’s better than coordinating the financial and legal teams? A financial due diligence specialist with a legal background (as with Finkelstein Financial). It mainly speeds up the analysis part. This is because the legal experience provides a deep understanding of local “ground rules” that impact the target company environment. This allows faster identification and resolution of potential legal issues.

Furthermore, a specialist with legal training may also have a more robust understanding of corporate governance, contracts, and compliance, enabling more concrete conclusions regarding key documents and agreements. Instead of just declaring “Non-quantified (+-N/Q)” and referring to your legal counsel, a financial due diligence report made by an M&A lawyer (as with Finkelstein Financials) can cut to the chase and leave no stone unturned.

Add that it goes without saying that a legal background can provide critical skills in communication, problem-solving, and negotiation, which can facilitate the due diligence process, reduce delays, and ultimately affect the SPA negotiations.

2. Provide On-site Solutions

A massive bottleneck in the due diligence process is often caused by delays in preparing and organizing the financial and legal materials for analysis by the target company. Most advisory firms take this delay as a given fact. We at Finkelstein Financials, however, don’t.

We create engagement as of day one through physical visits at the target headquarters. If preparation is prolonged, we are there to provide on-site solutions. If a delay is inevitable, we quickly inform the buyer of material reconciliation gaps.

Of course, it’s important to approach this method with sensitivity and respect. The target company’s management may be hesitant to hand over sensitive information, and it’s essential to work with them to ensure that their concerns are addressed.

Only by building a relationship of trust and transparency is it possible to complete the due diligence process quickly and effectively.

3. Using AI tools

Artificial intelligence (AI) tools are revolutionizing the way we work, and their impact on the financial due diligence process is no exception. These tools – when used cautiously, can be used to streamline the process of drafting, analyzing, and illustrating written content. For example, AI-powered writing assistants can help writers generate high-quality drafts quickly and efficiently, with features such as grammar and style checks, automated summaries, and even content generation based on user input.

AI tools can also be used for data analysis, helping to identify trends, patterns, and insights from large datasets.

In addition, AI-powered graphic design tools can help create visual representations of data and information, making it easier to communicate complex ideas to audiences. By leveraging the power of AI, Finkelstein Financials save time, increase accuracy and control, and produce easy-to-read, engaging reports that resonate with the board of directors.

Conclusion

In the end, executing a financial due diligence process in just 7 days may seem daunting, but with the right approach, it’s absolutely possible. By (a) working as a legal force; (b) providing on-site solutions, and (c) using AI tools, buyers can rely on a 7 days financial due diligence process.

Don’t lose time in your next M&A. Let Finkelstein Financials squeeze the deal timeline. Accelerate your financial due diligence process.

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