Due diligence finds what financials do not show upfront
A targeted review checks quality of earnings, debt, working capital, receivables, pending disputes, GST/TDS exposure, related-party arrangements and off-balance-sheet risks before a transaction closes.
Situations this page is built for
- Investor or acquirer evaluating an Indian target company.
- Startup founder preparing for fundraising data-room audit.
- Business acquiring a competitor or vendor.
- PE/VC fund reviewing a portfolio company.
- Buyer of a franchise or established small business.
- Partnership or JV formation requiring financial verification.
Documents usually required
- 3 years of audited financial statements.
- Management accounts for latest available period.
- GST returns and income tax returns for 3 years.
- Bank statements and loan schedules.
- Customer and vendor concentration data.
- Cap table and shareholder agreements.
- Pending litigation, tax demands or contingencies.
Practical process
Define scope
Set materiality threshold, period and transaction objective.
Review history
Analyse financial statements, returns and bank data.
Normalise EBITDA
Adjust for one-time, related-party or non-operational items.
Identify liabilities
Flag debt, tax, statutory and contractual exposure.
Issue report
Summarise findings, risks and negotiation points.
Common red flags in India-specific deals
- Cash transactions not in books.
- Inflated receivables with no collections.
- Related-party revenue with circular transactions.
- Pending GST notices or TDS demands not disclosed.
- Multiple auditors in 3 years.
How to use this page safely
Financial Due Diligence Services can depend on financial year, entity type, turnover, location, portal status, notice dates, transaction volume, documentation quality and whether prior filings were done correctly.
Use this page as preparation guidance. Before filing, responding, registering or appealing, share exact forms, notices, portal screenshots, amounts, due dates and prior acknowledgements with a qualified professional.
A strong WorkIndex quote should clearly state scope, assumptions, documents required, expected timeline, exclusions, and whether follow-up, correction filing or notice-response support is included.
How to compare WorkIndex responses
- Ask whether the expert has handled this exact service type, industry and portal workflow before.
- Confirm whether the quote includes filing only, advisory only, or also reconciliation, correction, response drafting and follow-up.
- Prefer experts who ask for records before final pricing instead of quoting blindly.
- For urgent matters, include statutory deadline, notice/order date, current portal status and financial exposure.
- Keep acknowledgement, computation, challan, report, working papers and communication trail after completion.
Keep these ready before requesting quotes
- PAN, Aadhaar, GSTIN, TAN, DIN, CIN, LLPIN, UAN or registration number as applicable.
- Portal login access or screenshots from Income Tax, GST, MCA, EPFO, ESIC, Startup India or other relevant portals.
- Previous filings, acknowledgements, challans, certificates, orders, notices, audit reports and working papers.
- Bank statements, invoices, contracts, payroll records, books export, rent agreements, transaction reports or board/investor documents relevant to the case.
- A short written summary of what happened, what deadline exists, what help you need and whether support can be remote or must be local.
How to get better quotes faster
- Mention whether you need a one-time filing, urgent correction, registration, audit, monthly retainer, appeal, or advisory review.
- Add approximate transaction count, employee count, turnover range, number of filings/years pending, and any notice deadline so experts can size the work properly.
- For accounting and bookkeeping pages, share the software used, number of bank accounts, monthly invoice count, GST status, payroll size and whether old cleanup is needed.
- For audit and diligence pages, share the review period, location count, materiality level, report format expected and who will consume the report: founder, investor, bank, board or tax department.
- For tax and GST disputes, upload or summarise the section/form/order number, demand amount, date of service, due date and current portal status before asking for a fee quote.
FAQs
How long does financial due diligence take?
Small deal reviews can take 1-2 weeks; deeper transaction diligence may take longer.
What is a quality of earnings report?
It normalises earnings to show sustainable operating performance and risk adjustments.
Can due diligence be done remotely?
Much can be remote through a data room, but physical verification may be needed for inventory, assets or operations.
Can WorkIndex find CA firms with M&A experience?
Yes. Mention deal size, industry, deadline and report expectations.