When a company is up for sale, whether as a whole or parts of its operations only, it needs to show an in-depth report on its financial health to potential buyers. The processes which start from the related review and analytical work to the generation of the in-depth report are collectively referred to as vendor due diligence.
Vendor due diligence is an in-depth report on the financial health of a company that is being sold. It provides vendors with greater control over the sale process and the timing of sale, which can, in turn, help secure a higher price for the business.
While the goal of vendor due diligence is to present the historical financial/operational performance and future prospect of the business being sold in detail, thus allowing that potential buyers to understand and assess its financial health/operational efficiency with confidence. Vendor due diligence also aims to address the concerns and issues that may be relevant to even the most demanding purchaser.