Kishen Patel
Founder, Consult EFC | ICAEW Chartered Accountant
Kishen specialises in preparing UK SMEs and SaaS founders for high-stakes due diligence. By bridging the gap between messy operational data and the rigorous “Investor-Ready” financial standards required by buyers, he helps owners protect their valuation and navigate the exit process without the typical “fire drill” chaos.
Table of Contents
Due diligence can feel like someone’s tipped a box of mixed paperwork onto your desk and set a deadline for next Tuesday. Requests come in fast, key facts sit in people’s heads, and the “final” version of a file exists in three places. Meanwhile, you still need to run the business.
The aim of this 90-day plan is simple: by the end, you’ll have a clear data room, clean numbers, and a story that matches the evidence. It won’t make every question vanish, but it will stop the process becoming a fire drill.
This is not legal advice. It’s a practical, owner-led plan for SMEs preparing for investment, refinancing, an acquisition, or a partial exit. If you want extra hands to run the timetable, keep people accountable, and keep Q&A moving, Consult EFC is the type of team that can support the process without turning it into theatre.
By the end, you should expect three outcomes:
- Faster Q&A, because documents are easy to find and already agreed internally.
- Stronger valuation support, because performance and forecasts tie back to evidence.
- Fewer deal delays, because gaps get fixed early, not during exclusivity.
Stop the “Fire Drill” Before it Starts
Due diligence doesn’t have to be a rescue mission. Consult EFC helps UK founders clean their data, professionalise their reporting, and bridge the gap between “running the business” and “being deal-ready”.
Independent ICAEW Corporate Finance Advice for SaaS & SMEs.
Preparing Your SME for Due Diligence: Team, Rules and Data Rooms
The first 48 hours decide whether the next 90 days stay on track. Without a simple set-up, every request becomes a new mini-project, and progress depends on whoever has time that week.
Start by naming a sponsor (usually the Owner or MD) and a deal lead (the organiser). Then assign workstream leads who can actually pull information and make decisions. For most SMEs, that means: finance, operations, sales, HR, and IT. If you don’t have those functions formally, assign the closest equivalent.
Use a simple RACI so people stop guessing:
- Responsible: does the work and uploads the evidence.
- Accountable: signs off, one person only.
- Consulted: gives input before sign-off.
- Informed: kept in the loop, no approval needed.
Buyers and investors usually ask for the same themes, even if the list looks different each time: financial performance, tax position, legal structure and contracts, commercial traction, operations and suppliers, people and incentives, IT and security, and basic compliance (sometimes including ESG).
Finally, set your single source of truth. That’s your data room, plus a Q&A log. If you allow “quick email attachments”, you’ll lose control of versions within days.
If a document isn’t in the data room, it doesn’t exist for diligence purposes. That rule saves more time than any template.
Your due diligence team, who owns what, and how you keep decisions fast
The Owner or MD should sponsor the project, but they shouldn’t do the admin. If the sponsor becomes the bottleneck, diligence slows and staff get distracted.
Use this kind of ownership model, then stick to it:
| Workstream | Owner (Responsible) | Backup | Weekly Time (Typical) | Approval Route (Accountable) |
|---|---|---|---|---|
| Deal management and Q&A | Deal lead | EA or PM | 3 to 5 hrs | Owner or MD |
| Financials and forecast | Finance lead | Management accountant | 5 to 8 hrs | Finance lead, then Owner |
| Commercial (sales, customers) | Sales lead | Key account manager | 3 to 6 hrs | Sales lead |
| Operations and suppliers | Ops lead | Site manager | 3 to 6 hrs | Ops lead |
| People and culture | HR lead | Office manager | 2 to 4 hrs | HR lead, then Owner |
| IT and security | IT lead | MSP contact | 2 to 4 hrs | IT lead |
Keep a weekly cadence that doesn’t waste time:
- Monday (30 mins): priorities and what’s needed this week.
- Midweek (15 mins): blockers only, quick decisions.
- Friday (30 mins): sign-off, uploads complete, next week locked.
That rhythm stops “nearly done” items dragging on for weeks.
Build a buyer-ready data room layout in under an hour
A data room is just an organised library of evidence. The winning version is boring: clear folders, consistent naming, and nothing uploaded without an owner.
A simple folder structure that works for most SMEs:
- 01 Corporate
- 02 Financial
- 03 Tax
- 04 Legal
- 05 Commercial
- 06 Operations
- 07 HR
- 08 IT and Security
- 09 Compliance and ESG
- 10 Forecast and Value Drivers
Use one naming format and enforce it. For example: YYYY-MM-DD_DocName_Vx_Owner.
Add three rules that prevent chaos:
- No document goes in without an owner and date.
- No drafts in the data room (keep drafts in a separate internal working area).
- One Q&A log with a unique ID per question, an owner, a due date, and a link to the uploaded answer.
Common traps to avoid early:
- Mixing date formats (especially US month-first dates).
- Uploading inconsistent versions of the same schedule.
- Sharing unsigned contracts when signatures exist elsewhere.
- Allowing “final-final” filenames with no version control.
The 13-Week Due Diligence Checklist for SMEs
Think of this as a 13-week fitness plan. You can’t cram it into the last fortnight and expect a good result. The work needs repetition, checks, and sign-off. That’s what makes Due Diligence Preparation feel controlled rather than chaotic.
Below is a realistic week-by-week sequence for an SME. It works whether you’re a multi-site service firm, a light manufacturer, or a SaaS business. Adjust owners to fit your structure, but don’t skip the deliverables.
Phase 1 (Weeks 1-4): Financial Foundations and Corporate Structure
Early weeks are about control and basic proof. If you can’t reconcile your own figures, a buyer won’t trust your forecast.
Here’s the four-week foundation plan:
| Week | Main Goal | Key Tasks (Tight but Specific) | Owner(s) | Deliverables |
|---|---|---|---|---|
| 1 | Kick-off and Control | Confirm RACI, create data room, create master request list, start Q&A log, set timeline, set NDA process. | Deal Lead | Must-have: Project plan, Data room index, Q&A log v1 |
| 2 | Clean Historical Performance | Tie trial balance to accounts, build 3-year monthly P&L, revenue split by product/site/customer type, gross margin bridge. | Finance Lead | Must-have: 3-year monthly P&L pack, Margin analysis, Tie-out notes |
| 3 | Cash, Net Debt & Working Cap | Build net debt schedule, working capital analysis, capex history, bank statement pack, aged debtors and creditors. | Finance Lead | Must-have: Net debt bridge, WC analysis, Debt schedule; Nice-to-have: Cash trends |
| 4 | Corporate and Contract Map | Confirm group structure, update org chart, cap table, key contracts list, board minutes list, licences and registrations. | Deal Lead (or CoSec) | Must-have: Corporate overview memo, Contract register v1, Org chart v1 |
Friday Quality Checks (Weeks 1-4)
- Dates match across files (same period ends).
- Totals match across schedules (P&L to management accounts, TB to statutory).
- Documents are signed where signatures exist.
- Every upload has an owner and version number.
Quality checks to run every Friday in Weeks 1 to 4:
- Dates match across files (same period ends).
- Totals match across schedules (P&L to management accounts, TB to statutory).
- Documents are signed where signatures exist.
- Every upload has an owner and version.
Phase 2 (Weeks 5-8): Commercial Traction and Operational Proof
Now you move from “these are our numbers” to “this is how the engine works”. Investors pay for repeatable profit, not for confident opinions. Evidence matters more than adjectives.
Use these weeks to show customer health, pricing discipline, delivery capacity, and people risk.
| Week | Main Goal | Key Tasks | Owner | Deliverables |
|---|---|---|---|---|
| 5 | Customer Demand | Top 20 customer pack, churn/retention analysis, pipeline hygiene. | Sales Lead | Customer cohort table, pipeline report |
| 6 | Unit Economics | Price list review, contribution by product line, discount rules. | Finance + Sales | Pricing policy, margin by SKU/service |
| 7 | Operations & Supply | Process mapping, capacity/utilisation, supplier concentration. | Ops Lead | Process map, supplier register, KPI dashboard |
| 8 | People & Culture | Headcount list, key person dependencies, bonus/commission rules. | HR Lead | Headcount list, incentives summary, skills risk note |
Practical tip: when a claim matters, attach a report. For example, don’t say “low churn”, show churn by month. Don’t say “strong pipeline”, show stage definitions and conversion.
Phase 3 (Weeks 9-13): Legal, IT Security, and Forecast Testing
In the final stretch, you reduce uncertainty. You also rehearse the Q&A process, because real diligence feels like a stress test. A mock week helps you spot weak areas while you still have time to fix them.
| Week | Main Goal | Key Tasks | Owner | Deliverables |
|---|---|---|---|---|
| 9 | Tax Readiness | VAT/PAYE status, filings calendar, reconcile VAT control. | Finance Lead | Tax compliance pack, risks register v1 |
| 10 | Legal Sweep | Contract renewals, disputes log, IP ownership summary. | Deal Lead (Legal) | Legal issues list, IP register |
| 11 | IT & Security | Systems map, backup tests, GDPR checks, incident log. | IT Lead | Systems inventory, security summary |
| 12 | Forecast & Drivers | 3-year forecast, link assumptions to history, run-rate bridge. | Finance Lead | Forecast model, assumptions book |
| 13 | Mock Diligence | Run mock Q&A week, red flag review, final index check. | Deal Lead | Final Data Room, Mock Q&A log |
A simple go or no-go check for Week 13:
- Can you answer top 30 likely questions within 24 to 48 hours?
- Do numbers tie out across every summary pack?
- Are the top 20 contracts findable, signed, and consistent with the register?
- Does the forecast have written assumptions and owner sign-off?
Stop the “Fire Drill” Before it Starts
Due diligence doesn’t have to be a rescue mission. Consult EFC helps UK founders clean their data, professionalise their reporting, and bridge the gap between “running the business” and “being deal-ready”.
Independent ICAEW Corporate Finance Advice for SaaS & SMEs.
What good looks like: the final deliverables buyers trust
Good diligence prep isn’t about having more files. It’s about having the right files, with clean links between them. Buyers trust packs that feel consistent, because they reduce the risk of “surprises later”.
At the end of 90 days, your data room should feel like a well-labelled cupboard. Anyone can find what they need, and each document tells the same story.
Aim for these end-state standards:
- One version of performance truth (monthly P&L, balance sheet, cash view).
- Clear bridges (what changed, why it changed, and what repeats).
- Evidence for key claims (customer stickiness, margins, capacity, IP).
- Signed approvals for anything that represents policy or commitment.
- A living Q&A log with owners and response dates.
When you present the story, stay grounded. Don’t oversell “blue-sky” upside. Instead, separate what’s proven (backed by results) from what’s planned (backed by actions). That tone builds confidence.
A simple “one-page pack” that helps an investor move faster usually includes:
- Headline financials (3-year summary plus last 12 months).
- Revenue mix and gross margin bridge.
- Net debt and working capital snapshot.
- Customer concentration and retention.
- Three to five value drivers with evidence.
- Key risks and how you manage them.
Consult EFC often supports SMEs here through advisory and accounting, helping clean numbers, tighten the pack, manage the timetable, and keep Q&A under control. The work still needs internal owners, but the process becomes calmer with clear coordination.
Your buyer-ready pack, the 12 documents that reduce follow-up questions
This table shows a practical “minimum set” that reduces back-and-forth. Keep it tight, signed off, and easy to trace back to source systems.
| Document | Owner | Quality Check (Sign-off) |
|---|---|---|
| 1) Corporate overview memo | Deal lead | Owner or MD |
| 2) Org chart (roles and reporting) | HR lead | Owner or MD |
| 3) 3-year monthly P&L and balance sheet | Finance lead | Finance lead, then Owner |
| 4) Net debt and working capital bridge | Finance lead | Finance lead |
| 5) Revenue and margin analysis | Finance lead | Finance + Sales joint sign-off |
| 6) Customer and pipeline pack | Sales lead | Sales lead |
| 7) Key contracts register | Deal lead | Owner or MD |
| 8) Supplier register | Ops lead | Ops lead |
| 9) Headcount and incentives summary | HR lead | HR lead |
| 10) Tax compliance pack | Finance lead | Finance lead |
| 11) IT systems and security summary | IT lead | IT lead |
| 12) Forecast and assumptions book | Finance lead | Finance lead, then Owner |
The takeaway: when owners sign off early, the business stops re-litigating answers mid-process.
M&A Red Flags: What to Fix Before Diligence Begins
Some issues are tidy-up jobs. Others are real risks that buyers will find anyway. The goal is to fix what’s fixable, then disclose the rest early with facts and context.
Fixable in 90 days for many SMEs:
- Missing reconciliations (bank, debtors, creditors).
- Unclear cost allocations between sites or product lines.
- Unsigned contracts that are actually agreed.
- Weak credit control and no clear collections process.
- Outdated policies (expenses, approvals, basic HR policies).
Disclose early, because hiding it usually harms value later:
- Active disputes or threatened litigation.
- A major customer loss, or a clear risk of it.
- Tax investigations or large unpaid liabilities.
- IP ownership gaps (especially for software and brand assets).
Early disclosure builds trust. It also stops “price chips” late in the deal when time pressure is highest.
How Consult EFC Manages Your Due Diligence Timetable
Due diligence feels stressful when the business is guessing, searching, and reacting. Pick a start date, assign owners, set the weekly cadence, and build the data room as you go. In 90 days, you can turn scattered knowledge into clear evidence that supports value and speeds up decisions. If you want hands-on support getting deal-ready, speak with Consult EFC about running the timetable, tightening the numbers, and managing Q&A while you keep focus on growth.
Stop the “Fire Drill” Before it Starts
Due diligence doesn’t have to be a rescue mission. Consult EFC helps UK founders clean their data, professionalise their reporting, and bridge the gap between “running the business” and “being deal-ready”.
Independent ICAEW Corporate Finance Advice for SaaS & SMEs.
Frequently Asked Questions (Consult EFC)
What does “SME due diligence” usually cover?
Due diligence is the buyer’s (or investor’s) deep check of your business before they commit. In practice, it tends to cover financials, tax, legal contracts, customer and supplier concentration, people and payroll, systems and controls, and how the business actually makes money.
For most SMEs, the biggest pressure points are simple ones, clean monthly management accounts, clear revenue recognition, sensible add-backs, signed customer contracts, and a tidy position on tax filings. If something’s unclear, it doesn’t automatically kill a deal, but it often slows things down and chips away at value because the buyer has to price in risk.
At Consult EFC, the aim of a due diligence prep plan is to help you present the business as it truly operates, with evidence to back it up, so you can stay in control of the process.
When should we start preparing for due diligence?
Start earlier than feels necessary. If you wait until you’re already in conversations, you’ll end up answering questions in a rush, and rushed answers create errors. A sensible rule is to begin months before you plan to raise investment or exit, because you may need a full set of clean monthly numbers, contract clean-up, and time to resolve any gaps.
Besides, prep work often improves day-to-day decision making. Better reporting, clearer margins, and tighter cash tracking help you run the business now, not just sell it later.
If you only prepare when someone asks, you’re reacting. If you prepare in advance, you’re negotiating.
What documents and evidence do buyers typically ask for?
It varies by deal, but most requests fall into a few buckets: historical financial statements and management accounts, bank statements, tax returns and VAT records, customer and supplier contracts, payroll and employment agreements, leases, insurance, cap table (if relevant), and proof of key assets or IP ownership.
They’ll also want explanations, not just files. For example, why margins changed, why working capital swings, how churn is tracked, or how you recognise revenue. A due diligence prep plan helps you pair each document with the story it supports, so the buyer doesn’t fill in the blanks themselves.
How do we avoid getting stuck in a long Q&A cycle?
The fastest way to shorten due diligence is to get organised before the data room opens. That means consistent file naming, version control, and a clear index so a buyer can find what they need without coming back with repeat questions.
Just as important, make sure your numbers tie together. For example, management accounts should reconcile to bank activity and tax filings where expected. If you’re using adjustments (like owner salary normalisation), document the logic and keep it consistent.
Consult EFC often sees deals drag because information is scattered across inboxes and spreadsheets. Pulling it into one place, with clear explanations, saves time and protects momentum.
Will due diligence prep increase the value of my business?
Prep doesn’t magically change what your business is, but it can improve how confidently a buyer can price it. When reporting is reliable, contracts are clear, and risks are understood, buyers tend to apply fewer discounts, smaller holdbacks, and less aggressive warranties or indemnities.
In other words, good prep helps you defend value. It also gives you options, because a well-prepared business can run a tighter process and keep multiple interested parties moving at the same pace. If you’re planning to raise or exit, it’s one of the most practical investments you can make in the outcome.
