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Integrating M&A Due Diligence Software into Your Existing Processes

In the fast-paced and complex world of mergers and acquisitions (M&A), due diligence is a critical stage that demands meticulous attention to detail and efficiency. Financial Due Diligence (FDD) and Transaction Advisory Services (TAS) teams in mid-market to large accounting firms face many challenges – from staffing shortages and volatile markets to extremely tight deadlines. In this landscape, the integration of M&A due diligence software, like Strongbox, into existing processes is not just beneficial – it's becoming essential.


The Need for Efficient Due Diligence Tools

The traditional M&A due diligence process is fraught with manual steps that are both time-consuming and error prone. FDD/TAS professionals first have to get access to the data needed, which takes days, if not weeks, of back-and-forth with targets that might be less than forthcoming.

Then, once they have access, they must grapple with vast amounts of data that need to be formatted, analyzed, and reported on to management, the target’s leadership team, and ultimately, the client. The formatting alone in this leg of the process can take additional days, if not weeks, depending on how the data is submitted. This is where M&A Due Diligence Software steps in as a game-changer.

The right software can automate many of these manual tasks, eliminating human error, ensuring accuracy of reports, and saving precious time for both the target and the time-strapped team.


Understanding the FDD Process

Below is a high-level overview of a buy-side financial due diligence project:

  1. Determine deal scope with client (periods covered, important analysis, etc.)

  2. Send a data request list to the sell-side.

  3. Wait. (Days or sometimes weeks)

  4. Review documents as they arrive and update the request list for missing or incomplete items. Repeat this until requests have been fulfilled.

  5. Convert submitted data and documents into the Excel "databook" to use for analysis - highlighting any questions or items to be clarified by sell-side's management team.

  6. Multiple levels of review of the databook to ensure accuracy and consistency.

  7. Complete meeting(s) with sell-side management team, including standard questions and detailed questions about the provided data.

  8. Complete analysis on key scope items, like the quality of earnings or net working capital.

  9. Convert databook and findings into a report for the client.

  10. Write, review, and finalize report before sending to the client.

Each of these steps involves multiple processes of their own, and seeing the process laid out makes it easier to identify bottlenecks and repetitive work where technology improvements will have the biggest impact.


Streamlining FDD with Strongbox

Integrating M&A due diligence software like Strongbox into this process can significantly streamline these tasks, saving your team time and sanity. Here's how software can help:

  1. Data Collection: FDD requires collecting and analyzing vast amounts of financial data. Strongbox can automate this step by directly connecting to the target company's accounting systems, pulling necessary data without manual input.

  2. Data Analysis: Once data is collected, it needs to be analyzed to uncover trends, risks, and opportunities. Strongbox can automatically perform these analyses, presenting findings in a clear and consistent format, creating a scalable and standardized process.

  3. Reporting: Creating reports is a crucial part of FDD, but it's also time-consuming. Strongbox's integration with Excel means that reports can be customized and branded to match your firm’s templates, resulting in instantaneous, beautiful reports every time.

  4. Training and Adoption: Given the familiarity of most professionals with Excel, the learning curve for adopting Strongbox is significantly reduced. This facilitates quicker adoption and integration into the existing FDD process.


The Integration Process

Integrating any software into your existing FDD process involves a few key steps:

  1. Assessment: Start by assessing your current FDD process to identify areas where software can add the most value.

  2. Pilot Testing: Run a pilot test on a small-scale M&A transaction to see how the new solution integrates with your process and to iron out any kinks.

  3. Implementation Plan: Develop a plan for integrating the tool, including timelines, training schedules, and milestones for adoption. Don’t forget any key stakeholders that may need to be involved, like legal and your IT team.

  4. Training and Onboarding: Conduct training sessions to familiarize your team with the new technology, focusing on how it integrates with your existing tools and processes.

  5. Full-Scale Implementation: Once the pilot test is successful, roll out the full-scale implementation in your FDD processes.

  6. Ongoing Support and Evaluation: Provide ongoing support to your team and continuously evaluate the software’s impact on your FDD process, making adjustments as needed.

By following these steps, FDD/TAS teams can effectively integrate M&A due diligence software into their existing processes, enhancing efficiency and accuracy while coping with the challenges of staffing shortages, volatile markets, and tight deadlines. This strategic integration positions firms to capitalize on technological advancements, setting them apart in the competitive landscape.


Strongbox Stands Out Above the Rest

Strongbox is unique in the FDD space, primarily because it was designed specifically for TAS/FDD teams. Unlike other platforms that offer complicated dashboards and require extensive training, Strongbox offers a seamless integration experience. It leverages a tool that most professionals are already familiar with – Excel. This familiarity is a major advantage, reducing the learning curve significantly and allowing teams to get up to speed quickly.

The integration of M&A due diligence software into existing FDD/TAS processes is not just a matter of convenience – it's a strategic move to enhance efficiency, accuracy, and decision-making in M&A transactions. With its ease of integration, integration with Excel, and features designed specifically for FDD/TAS teams, Strongbox stands out as a valuable tool for accounting firms navigating the complexities of today's M&A environment. As the landscape continues to evolve, Strongbox will become increasingly indispensable for firms looking to stay competitive and deliver superior value to their clients. Contact us today to learn more.


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