“And how to automate due diligence process management”.

According to Rocket Lawyer;

 “due diligence is a process of detailed investigation completed by a business or person before signing a contract or starting an ongoing business or employment relationship. The aim of due diligence is to identify any potential problems or unexpected liabilities”.

As necessary as the due diligence process is, however, these processes can also be cumbersome, lengthy, and require a large number of documentation steps and gathering of information. Let’s learn more about the types of due diligence.

Types of Due Diligence Processes

In this article, we will focus on the business and operational areas. We will make emphasis on customer due diligence, vendor due diligence, and operational due diligence.

Customer due diligence is the act of assessing your customer’s background. Vendor due diligence focuses on ensuring a potential vendor is a safe fit for your organization. While the operational due diligence is the process by which a potential purchaser reviews the operational aspects of a target company during mergers and acquisitions.

Due diligence is usually classified in one of the areas above, which can also be divided into three main categories:

Legal Due Diligence

It is the process of collecting, understanding and assessing all the legal risks associated during a M&A process. The idea behind this investigation is to understand if there will be any future legal problems due to this acquisition.

Legal due diligence
financial due diligence

Financial Due Diligence

It entails a full analysis of a business. It uncovers potential risks, red flags and helps to make an informed decision on whether partnering with a new entity will be beneficial for your company or not.

Commercial Due Diligence

It’s instituted by a prospective buyer to uncover a target company’s commercial activity, viability and potential. Commercial due diligence services insight on market demand, commercial position, revenue, and competitive dynamics.

commercial due diligence

Performing the appropriate legal, financial and commercial due diligence could prevent your company from compliance nightmares. It will help you protect your intellectual property, and even uncover financial information that can shape the future of your products and services.

These processes can be long and full of moving parts — which is often the main reason why many organizations choose to use due diligence software.

Due Diligence Software: What it can do for you

A powerful software solution is an effective way to create an accelerated due diligence process. It will lead to increasing visibility, managing requests in real time, easily tracking progress, and eliminating disparate communication.

By choosing a due diligence software platform you’re able to better conduct your due diligence processes and get a 360-degree view of your data with automatic audit trails.

Some additional benefits include:

» A safe place for sharing confidential information
» Options for hosting all relevant documents in one place
» Dashboards where you can get full documentation visibility
» Alternatives for share and route documents
» The ability to develop custom rules
» Elimination of duplicate work

How to manage your Due Diligence Processes with Virtus Flow

Virtus Flow allows you to digitize and automate your existing due diligence processes and add new ones without hassle. It helps you to connect processes between different departments to automate processes end to end without the need for coding.

How to automate them?

Well, to take advantage of your automation software and simplify your work as much as possible, automate your full process cycle. This is nothing but to connect all related processes. For example, if we are talking about Vendor Due Diligence, make sure to include all processes from new vendor request, to credentialing, to due diligence, approvals, and onboarding.

New vendor requisition form

A department that has found a solution that needs, digitally requests the purchase of the new product or service.

The requests and support documentation is automatically routed to the team, office, or person that has been pre-stablished.

According to the rules and conditions stablished when designing the workflow.

Explore how to create dynamic forms
new vendor requisition form
pending Virtus Flow workflow management dashboard

Managing requests and work

The staff member in charge receives the new request in his/her dashboard as well as via email. Depending on what is next, they can approve or decline with a few clicks or start a new workflow.

All steps and actions are fully customizable. After action is taken, they can invite the vendor to submit information and upload all documentation digitally with a similar form.

Once all information has been provided, the system automatically routes specific information to specific department or staff and triggers automatic events.

For example it can send the notification to the due diligence department with the request to start a new due diligence process.

Document Management

We also incorporated a full document management dashboard to give users the ability to manage documents faster.

You can either access the documents you have acquired through your workflows, or add and share with internal or external users.

This section allows you to quickly filter and access documents by project, department, team, staff member, customer, case or you can choose your desired filters.

explore digital workflows
Virtus flow document management platform

Because due diligence requires such a vast amount of research and information, the more powerful the software solution you choose, the more long-term benefits you’ll see and the easier it will be.

See how to streamline your Due Diligence and related processes


7 Tips To Enhance Your Due Diligence Process Management

Here are our seven tips to help you improve your due diligence process while increasing efficiency.

7 Tips To Enhance Your Due Diligence Process Management

1- Broaden your Knowledge

The more you know about the market you’re conducting due diligence for, the less time you’ll need to make an educated decision. This could take a lot of time and resources. Therefore a due diligence software could be a great alternative to support your investigations.

2- Use accurate Data

When you’re legally obligated to conduct due diligence for Mergers and Acquisitions, the accuracy of your data will determine how successful your research is. Make sure to use reputable sources and to use platforms that allow you to view all documents in one place.

3- Increase Transparency

When handling intellectual property data and sensitive documents like financial statements, having a secure place for sharing files and allowing relevant parties to have full visibility will only streamline the process.

When shopping for due diligence software, make sure to look for a vendor that gives you safe file-sharing alternatives.

4- Introduce Automation

Due diligence automation can help you build customized workflows, determine relevant deadlines, help you run background checks and even introduce machine learning to drive informed business decisions.

You can automatically trigger steps and route work once the decision point is submitted. As well as to start the verification process simultaneously or by steps. Automatically share and store information after one department has given its feedback or completed a verification, etc.

Before choosing the right software solution, make a list of all the features you need and why. This will help you ask the right questions when shopping for due diligence software.

By expanding your company’s business operations, you empower your team by allowing it to focus on strategic tasks.

See how you can digitize and automate your full due diligence processes.

5- Do plenty of Research

Going the extra mile will help your company from liabilities and potential loss of profit. To do so, you will need to maintain excellent file organization and make sure nothing goes missing.

6- Expand your Bandwidth

As detailed and accurate as your exercised due diligence process needs to be. It’s important that you take advantage of all available resources that will save you time and money while conducting research.

When it comes to joint ventures, for instance, your job is to prepare, organize, and analyze the data in advance. So make sure to use all the tools that will help you do so in the most efficient way possible.

7- Trust your Intuition

There is no business process for trusting your intuition. Being able to get a full view of your findings will make it easier to draw an accurate picture in your mind. Letting you make a better decision with as much information as possible.

Comply with you SOP with process automation

Simplify your Due Diligence processes 

…with digital forms, automatic audit trails, event triggering and information sharing so as with an advanced document management and more.

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