Transactions · Acquisitions · Investment
Understand the business behind the numbers—before you buy, invest or sell.
SAIF Chartered Accountants helps buyers, sellers and investors examine earnings, working capital, debt and financial risks. Get a transaction-focused view of the target, with clear findings, evidence gaps and questions for your deal team.
A decision, not just a report
Start with what is being acquired, how the price was calculated and whether the records support the seller’s description. Financial due diligence (FDD) brings those questions together for a business acquisition, merger, investment or financing.
Our review can cover historical results, current trading, revenue concentration, cash conversion and obligations that may change the economics of the deal. Findings help you decide what to investigate further, negotiate or plan for after completion.
For an SME acquisition, a family-business sale or a larger group transaction, the scope should reflect the business—not a standard bundle of documents.
Choose the right assignment
Test the financial case for acquiring a company or investing in it. Focus on the target’s trading, cash needs, exposures and assumptions that support the offer.
Useful for: business purchases, private equity and family-office investments, joint ventures and acquisition finance.
Understand issues before potential buyers raise them. Organise the data room, reconcile financial information and explain material movements or adjustments.
Agree the distinction: seller preparation is not automatically an independent vendor report on which a buyer can rely.
Concentrate on specified financial concerns at an early stage, or examine earnings in greater depth. A staged approach can help prioritise further investigation.
Know the limits: a narrow review is not a substitute for omitted tax, legal or financial workstreams.
Inside the financial review
The engagement letter defines the entities, periods, materiality, access and deliverables. These six areas form a practical starting point for a financial due diligence checklist.
Separate recurring performance from one-off income, exceptional costs and accounting differences. Review revenue recognition, gross margins, owner remuneration and related-party charges.
What you receive: A bridge from reported earnings to proposed adjustments, with the rationale, evidence available and unresolved items. An expense is not an add-back merely because management calls it exceptional.
Analyse receivables ageing, collections, inventory, payables, accruals and customer advances across monthly periods. Consider seasonality, growth and overdue balances rather than relying only on year-end.
What you receive: A proposed normal level of operating working capital and issues to discuss in the purchase agreement. Definitions must be consistent with the agreed deal mechanism.
Review borrowings, shareholder loans, financing arrangements, restricted cash, unpaid obligations and contingent exposures. Consider leases and other disputed classifications in the transaction context.
What you receive: A schedule of proposed debt, cash and debt-like adjustments. Avoid counting the same item in both net debt and working capital. Classification is a matter for agreement, not a universal checklist.
Examine the consistency of management accounts with financial statements, accounting policies, provisions, asset recoverability, capitalised expenditure and related-party balances.
What you receive: Financial reporting gaps and their possible effect on earnings or the assets and liabilities being acquired. The work is not an audit opinion or asset appraisal.
Compare recent trading with historical results and budgets. Challenge assumptions about customer retention, sales pipeline, margins, staffing, capital expenditure and cash requirements.
What you receive: Sensitivities and funding questions for the buyer or investor. Forecasts remain assumptions; a profitable target may still require additional cash after acquisition.
Identify tax, contractual and operational matters that affect the figures. Link findings with separately scoped tax work and legal, commercial or technical specialists where required.
What you receive: A prioritised issues list showing known amounts, estimates, missing information and follow-up responsibilities. Unknown exposure should not be presented as zero.
From analysis to negotiation
A financial observation becomes useful when the deal team understands its consequence. The sequence below shows how a finding can shape the deal team's questions; the outcome depends on the evidence and negotiations.
The records show sales, but the cash has not arrived.
Discuss recoverability and reconcile the supporting information available.
Assess whether provisions or agreed balance-sheet definitions need attention.
Discuss the financial effect with the buyer and legal advisers; track unresolved items.
A cash-free, debt-free transaction may adjust enterprise value for agreed cash, debt and differences from a normal working-capital level. A locked-box and a completion-accounts mechanism work differently. The purchase agreement governs the definitions and adjustments; there is no one formula suitable for every deal.
Financial findings can inform a sale and purchase agreement (SPA), but legal counsel drafts and advises on warranties, indemnities, conditions and enforceability.
Local context matters
Where tax due diligence is included, review registration and filing history, calculations, payments and open FTA matters against the available records. Identify missing periods and distinguish quantified liabilities from questions needing further analysis.
Examine Corporate tax, VAT treatment and related-party pricing as separate technical questions. Do not treat a tax registration certificate as evidence that all transactions are compliant.
Clarify whether the purchase concerns shares, selected assets or a carved-out division. Identify the accounting perimeter, shared costs, balances to settle and services the business may need after separation.
For a free-zone target, assess the financial assumptions behind any QFZP tax position. Coordinate licence, ownership-change and regulatory questions with the relevant authority and legal specialists. Cross-border entities may require advisers in other jurisdictions.
Prepare the data room
Start with an indexed information request. Name an owner for each response and keep a record of outstanding questions. Reconciled schedules are more useful than a large folder of unexplained files.
Share confidential records only through the agreed access-controlled channel. The information request below is a starting point; request depth depends on the deal and the work commissioned.
Group structure, trade licences, ownership details, entities or assets in scope, draft term sheet and intended transaction timetable.
Typically two to three years of financial statements, monthly management accounts, trial balances and current year-to-date results; the appropriate period is agreed for the business.
Sales by customer, product and location; major contracts; revenue recognition policies; payroll, owner remuneration and key supplier schedules.
Bank reconciliations, borrowing agreements, debtor and creditor ageing, inventory listings, advances, guarantees and related-party balances.
VAT and Corporate tax registrations, returns, calculations, payments, authority correspondence, leases, employee benefit provisions and material commitments.
Budgets, forecasts, capital expenditure plans, management explanations for exceptional items, accounting changes and differences between records.
Clear stages. Visible open questions.
Discuss the proposed deal, conflicts and independence, entities, users, deadlines and permitted reliance. Confirm what is included and what requires another specialist.
Analyse the financial records, reconcile key schedules, hold management discussions and investigate agreed areas. Flag significant concerns early rather than waiting for a final report.
Present key findings, proposed adjustments, supporting analysis and limitations. Distinguish management representations, documented facts and estimates.
Discuss the report with authorised users. Additional negotiation support, updated trading analysis or completion accounts can be separately agreed.
A board, lender or investment committee may have specific requirements. Confirm those before work begins; report acceptance and third-party reliance are not automatic.
We assess the number of entities, record quality, business model, historical periods and transaction complexity before quoting. The need for tax analysis, overseas work, urgent reporting or repeated updates changes the effort.
Agree a realistic timetable once information access is understood. A red-flag stage can precede a fuller review, but a short deadline does not remove the need for adequate information.
Request a scoped proposal →Questions before you appoint an adviser
Financial due diligence is a transaction-focused examination of a business’s financial performance, cash flow, assets and liabilities. It helps a buyer, seller or funder understand the financial assumptions and risks behind a proposed deal. Its scope is agreed for that transaction; it does not provide an audit opinion or guarantee that every issue will be detected.
Identify exactly what you are buying, request recent accounts and monthly trading figures, understand the asking-price assumptions and establish access to management. Review earnings, cash collection, debt, tax exposures and customer dependency before committing. Coordinate separate legal checks on ownership, contracts, licences and the transaction documents.
No. An audit addresses financial statements under an applicable reporting and assurance framework. Financial due diligence is tailored to a transaction and investigates questions relevant to that deal, including current trading and purchase-price assumptions. Audited accounts are useful inputs but do not replace due diligence.
A quality of earnings, or QoE, report examines the composition and sustainability of reported earnings. It can analyse proposed EBITDA adjustments, revenue quality, cost trends and accounting inconsistencies. A focused QoE assignment is narrower than a full financial due diligence engagement unless working capital, net debt and other workstreams are also included.
Vendor due diligence is commissioned by a seller to examine financial information before or during a sale process. Seller preparation instead helps organise records and explain issues. They are different assignments: whether a purchaser can rely on a vendor report depends on its terms, permitted users and any agreed reliance arrangements.
An initial review may be possible using management accounts and other available records, but the quality and completeness of information determine what conclusions can be reached. Missing or inconsistent records may require separate accounting cleanup, a narrower scope or additional work. Limitations should be visible in the report.
Financial work can identify tax-related items, but detailed tax due diligence must be expressly included in the engagement. Relevant work may cover registrations, returns, calculations, payments, open enquiries, related-party transactions and free-zone tax assumptions. Transaction-specific tax advice is scoped separately where needed.
A free-zone licence does not establish the quality of a company’s finances or remove acquisition risks. Review its earnings, liabilities and records, then coordinate authority, licence-transfer and tax questions with the appropriate advisers. Qualifying Free Zone Person status should not be assumed from the registered address alone.
Fees depend on the company profile, transaction scope, number of entities, historical periods, record quality, access to management and the depth of financial and tax work. A limited red-flag review and a full buy-side report involve different work. SAIF provides a scoped quotation rather than standard fixed plans for every business.
The timetable is agreed after assessing the scope and information available. A single-entity review with organised records can progress faster than a multi-entity, cross-border or carve-out transaction. Data gaps, delayed management responses and changes to the deal can extend the work. Agree interim findings and the final reporting date at the outset.
No. Findings inform the valuation assumptions, negotiations and risk assessment, but a valuation is a distinct assignment and the investment decision remains yours. No due diligence report guarantees future performance, detects every hidden liability or assures acceptance by a bank or investor. Confirm a recipient’s requirements before commissioning work.
Agree an NDA where appropriate, the authorised recipients and a controlled data room or secure transfer method before sharing detailed records. Limit access to necessary information, keep a request and response log, and agree report circulation and retention arrangements. Do not send passwords or one-time login codes.
Start with the transaction
Tell us the business activity, entities, proposed transaction and deadline. We will help define the financial questions and information needed for a scoped proposal.
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