When Does Due Diligence Begin and What Should You Prepare First – Welcome to SIEMA KONSULTAN, your trusted partner in the Due Diligence process across Indonesia. Are you planning an acquisition, investment, or other transactions that require thorough investigation? If so, this article will help you understand when to start the Due Diligence process and what initial preparations are necessary. With our experience and expertise, SIEMA KONSULTAN is ready to guide you from the initial planning stage to the finalization of the process. Let’s explore together the key information so you can make strategic decisions with confidence.

Due Diligence is an in-depth investigation conducted before completing a business transaction, such as company acquisitions, investments, or asset transfers. The main goal of Due Diligence is to ensure that buyers or investors have a comprehensive understanding of the target’s financial condition, legal standing, operational aspects, and potential risks involved. In other words, this process helps mitigate risks and ensures that decisions are based on accurate data and facts.

When Does the Due Diligence Process Begin?

Many ask, “When is the right time to start Due Diligence?” The answer varies depending on the transaction situation, but generally, this process should commence after the parties have reached an initial agreement and before signing the final contract.

Specifically, the timing of when Due Diligence begins includes:

• After the Letter of Intent (LOI): Once both parties agree on the main terms and sign the LOI, the Due Diligence process can begin immediately. At this stage, the buyer starts collecting information and conducting preliminary evaluations.
• Before the Final Transaction: Due Diligence should be completed prior to signing the Sale and Purchase Agreement (SPA), so that all risks and potential issues are identified and addressed beforehand.
• During Negotiations: If there are points to renegotiate based on the Due Diligence findings, this process should run concurrently to avoid delaying the transaction timeline.

What Are the Initial Preparations?

To ensure a smooth and efficient Due Diligence process, here are key elements that must be prepared early on:

1. Legal and Administrative Documentation
   • Company deeds, business licenses, NPWP (Taxpayer Identification Number), TDP (Company Registration Certificate), and other legal documents.
   • Important agreements, contracts, and ongoing litigation documents if any.
   • Asset ownership records and operational permits.
2. Financial Data
   • Recent financial statements (balance sheet, income statement, cash flow statements) covering at least the last 3 years.
   • Audit reports, tax records, and other financial obligations.
   • Accounts receivable and payable data.
3. Operational Information
   • Organizational structure and employee data.
   • Major customers and suppliers.
   • Business processes and Standard Operating Procedures (SOPs).
4. Risks and Potential Issues
   • Litigation records, disputes, or other legal issues.
   • Environmental and social risks that could impact the business.

Next Steps After Preparation

Once all documents and data are compiled, the next step is a thorough analysis. Typically, a professional consulting firm and Due Diligence team will conduct detailed examinations, interviews, and data verification to ensure all aspects are covered.

Why Is It Important to Use a Professional Due Diligence Consultant?

The Due Diligence process is complex and requires specialized expertise to ensure accurate and comprehensive results. Mistakes in this process could lead to financial losses or reputational damage. Therefore, choosing an experienced and trusted consulting company is highly recommended.

Why Choose SIEMA KONSULTAN?

As an experienced Due Diligence consulting firm, SIEMA KONSULTAN is here to assist you in conducting this process professionally and efficiently. Based at Sampoerna Strategic Square South Tower Level 30, Jl. Jend. Sudirman Kav. 45, Jakarta, we serve clients throughout Indonesia with a high commitment to quality and integrity.

With a team of experts in legal, financial, and operational fields, SIEMA KONSULTAN is ready to support you from initial preparations through to final evaluation. Contact us for a free consultation via TLP/WA at 0813 1114 2228 for more information about our Due Diligence services.

Starting the Due Diligence process at the right time and with thorough preparation is crucial to ensure smooth transactions and minimize future risks. Be sure to begin after reaching an initial agreement and preparing all relevant documents comprehensively. Don’t hesitate to rely on professional services like SIEMA KONSULTAN for the best and trusted assistance.

Together with SIEMA KONSULTAN, your business steps will be more confident and secure. Contact us now for a free consultation and start preparing your strategic moves today!

For more information

Please visit:

www.siemakonsultan.com

Jakarta Office:

Sampoerna Strategic Square

South Tower Level 30,

Jl.Jend.Sudirman Kav.45

Jakarta Selatan – DKI Jakarta

Bali Office: 

Jl. Cokroaminoto No.212,

Ubung, Denpasar Utara,

Bali – Indonesia

Contact Us:

Imam Budiharto
imam@siemakonsultan.com

Telpon: 021 2992 7844

Whatsapp: 0813 1114 2228