Sell-side due diligence checklist: 39 items, by workstream

The standard data request list we send at the start of every vendor due diligence engagement — grouped into nine workstreams, with a one-line explanation of why buyers ask for each item, a status legend, and a printable PDF.

Why a request list, and why this one

Every buyer’s advisor arrives with a data request list. It is long, it is generic, and it is sent on day one of exclusivity, when the seller has least time and most to lose from a slow answer. The sell-side response is to send the list to yourself first: collect the documents before the process starts, mark what exists and what does not, and open the data room already complete. A seller who does this controls the timetable; a seller who does not is answering questions under a clock set by the other side.

The list below is the standard request list we send at the start of every vendor due diligence engagement and the same list our gap analysis in the data room is built around. It is deliberately not exhaustive — a sector-specific review (software, manufacturing, hospitality) adds its own items — but these 39 documents are what a financial, tax and legal diligence team expects to find in any sale of an established private company, and each one is here because a buyer will ask for it. If you want the context for how these documents are used, read our guide to vendor due diligence and what a good VDD report contains.

How to use it: the status legend

Give every item one of four statuses and keep the list current until closing. The point of the statuses is not bureaucracy; it is that the “missing” and “partial” lines are the open-items appendix of the vendor due diligence report, and the buyer will see them.

Three rules of thumb. Mark something N/A only with a reason (“no owned property; all premises leased, see F29”) — an unexplained N/A reads as a gap. Treat partial as missing for planning purposes: two of three years of audited accounts is a question, not an answer. And date every status change; when a bidder asks why the ageing in the room is three months old, the log is your answer.

The 39 items, by workstream

Numbering runs continuously from 1 to 39 across the nine workstreams so that the same reference can be used in the data room index, the Q&A log and the report’s open-items appendix.

What buyers do with these documents

It helps to know how the other side reads the list. A financial diligence team starts with items 6–9 and 15–16 — the audited accounts, the management accounts and the tax filings — and runs three reconciliations before anything else: revenue to the VAT returns, payroll to the payroll tax filings, and cash to the bank statements. If those agree, the management numbers are trusted and the rest of the work builds on them. If they do not, everything slows down and the tone of the whole process changes.

The next stop is the EBITDA bridge, which draws on items 9, 23–25, 29–30 and 38–39: the ledger for exceptional items, the payroll for owner and related-party remuneration, the leases and property valuation for market rent, and the related-party schedule for non-arm’s-length dealings. Then the net debt and working capital work, which lives in items 8, 10–11, 26, 33–35: monthly balance sheets, ageings, pension and holiday obligations, loans, guarantees and off-balance-sheet financing. The legal team, in parallel, is reading items 1–5 and 20–24 for change-of-control clauses, consents and key-person risk, because every one of those becomes either a closing condition or a warranty.

Seen this way, the list is not nine unrelated piles of paper. It is the input to four or five analyses a buyer will do regardless, and the seller who has done them first — with the documents to show for it — is negotiating from the buyer’s own fact base.

The gaps we see most often

• Monthly balance sheets (item 8). Most owner-managed companies produce a monthly P&L but not a monthly balance sheet. Without one there is no defensible working capital peg, and the buyer’s advisor will propose the reference month that suits the buyer.
• Contracts without the signed version (item 20). A draft or an unsigned counterpart is not evidence. Find the executed copy, including all amendments and side letters.
• Capex without the maintenance/growth split (item 13). If the seller has not split it, the buyer will treat all of it as maintenance.
• Related-party dealings listed from memory (item 38). Pull them from the ledger, not from recollection; the buyer will.
• An empty litigation schedule (item 5). Disclose the small disputes with their resolution. A blank schedule for a company of any age is treated as incomplete, not clean.
• Key-person contracts that were never written (item 24). A verbal arrangement with the operations director is a retention problem the buyer will price. Paper it before the process.

Once the documents are collected, the question becomes where to put them and how to control who sees what. Our guide to choosing a data room for sell-side M&A covers the folder structure that maps onto these nine workstreams, access tiers, watermarking and the Q&A workflow. In SellSide DD the checklist is built in: documents uploaded to the room are matched to the 39 items automatically, the status of each item updates as files arrive, and the gaps become the first draft of the open-items appendix in the vendor DD report.