Due Diligence is the analytical use of financial and non-financial information and business intelligence to make top quality business decisions. Interim CFOs can take you to new heights of success by assessing the business opportunities and prospective investments and contracts from all possible angles before you decide to undertake them. This discussion is focused on some types of due diligence services interim CFOs offer and how you can benefit from.
Competitive Business Intelligence
Business intelligence is the key to critical decision making, and when you have industry-wide and complete market information no one can stop you from going ahead and get that valuable possession called competitive advantage. A well connected interim CFO can help you by providing valuable industry-wide information, identifying potential partners and those willing to cooperate, evaluating the infrastructure and operational risks, and benchmarking competitor performance. Interim CFOs will be available to guide you on all matters during the process.
Buy-Side Due Diligence
If you are looking forward to acquire a potential business that will add value to your company, you can initiate a buy-side due diligence which will enable you to analyze the target company, and take care of the major risks that may affect the valuation of the target company. You will also have an appropriate post-acquisition agenda and highlight the potential deal breakers.
Sell-Side Due Diligence
This type of due diligence is initiated by the selling party. This is often seen as a part of the selling process of the subsidiaries and business segments. Interim CFOs can evaluate the business and prepare independent due diligence reports that can serve as a valuable source of information for interested buyers. This will help in accelerating the selling process besides being aware of the risks and issues involved in the process.
Protection of Transactions and Reputation
These include due diligence and transaction advisory services that mitigate the transactional and reputational risks. Before you close out a deal, you need to:
- Assess the integrity of the individuals and management of the other party
- Evaluate the financial information presented in the annual reports
- Assessing the adequacy of financial and other controls employed
- Tracing the supply chain for compliance related vulnerabilities
- Related party transactions and issues
Regulatory Reporting and Capital Markets
These include the assessment of opportunities for raising funds for the business from various capital markets. You may generate sufficient funds by obtaining loans or issuing new equity instruments. This needs preparation in accordance with the rules of the stock exchange and other regulatory authorities.
Besides these due diligence service, you need to identify potential business opportunities and analyze your business with respect to the industry benchmarks to get an idea of your strengths and weaknesses, which is far better and easier to do with valuable business intelligence at your disposal.