Due diligence is the part of the mergers and acquisitions process where you find out the nuts and bolts of the business that you are buying. Conducting due diligence can take weeks or even months, even for a relatively small and ‘uncomplicated’ business –so having an awareness of some of the more common challenges can help you to speed up the M & A process, or at least make it a little less stressful. Read on for our overview...

The Most Common Challenges in Due Diligence


Throughout the due diligence phase, the buyer side needs to ask for a lot of varied information from the seller, as well as any operational or other questions that crop up. The seller side then needs to find the relevant documentation and pass it along, as well as answer those questions.

This almost constant stream of two-way information can become tricky –items get missed or forgotten about, documents get misplaced, and wires can get crossed. One of the better ways to tackle this is through using a data room –a shared online portal where all requests and responses can be centralized and stored.


As the buyer, you probably have an accountant that you use or even an internal accounting team. Likewise, you likely already have someone on your expanded team that you turn to for legal advice. Unless those people have conducted due diligence work before, they are unlikely to be the right people for the job –account personnel and legal experts are often extremely focused on the exact type of work that they specialize in, and this is a different (but adjacent) requirement.
This means that you will have to hire external experts, which means that the due diligence process can become costly.


It may seem to you that the due diligence is dragging on for too long. There will be a temptation to draw a line under the activity and proceed forward –particularly if you are looking at another two or three months of costly due diligence when you feel very comfortable with the information that you have found so far.

The important thing to do here is not to see due diligence as costing you money, but rather to see it as an investment. Those extra few months of work might uncover something which changes the very nature of the business transaction (and your appetite to see it through) ultimately saving you money in the longer-term.

Sunk Costs

On the subject of costs –the whole point of the due diligence process is to help you decide if the deal is what you want it to be. However, it can be challenging to spend the money required to handle due diligence properly, only to then walk away from the deal.
Try not to see it as money wasted –finding out that the deal was not right for you was exactly what you paid the money for.