Make No Mistake With Financial Due Diligence in Indonesia
The business industry has a nature of being constantly dynamic and unpredictable. That’s why business owners conduct financial due diligence – to protect themselves and their business. Performing due diligence is imperative for your business when entering into an agreement with any individual or body. Learn more on financial due diligence in Indonesia below.
What is Due Diligence?
Due diligence is the act of launching an investigation or a thorough review on a matter to verify its validity. In the business world, financial due diligence is defined as examining a business affair, including the company’s past financial record, transactions, legal matters, patent and factors pertaining to it. In today’s economic climate, more and more companies are choosing to properly execute due diligence in order to avoid one too many mistakes from happening. But is it really that important?
Why Do I Need to Conduct Financial Due Diligence?
Some businesses, especially newer ones and start-ups, tend to overlook the necessity of due diligence. While some may be lucky and have smooth business transactions, others who were not so fortunate might have suffered terrible dents to their company affairs. Many things can be put off or skipped, but performing financial due diligence should never be taken lightly.
There are several reasons as to why you need to conduct financial due diligence, regardless of whether you are playing the role of a seller or buyer. Let’s say you are a seller and choose to have financial due diligence conducted on your company. Your financial due diligence report will attract more clients and investors, and at the same time convinces existing business partners to increase their stock percentage or to sign in more new deals. On the other hand, onlookers and the public audience (who may very well be your future employees) will be interested in your company and would want to work for you.
Now, imagine yourself as a buyer. Before purchasing an item or service, you would want to make sure that whoever you will be working with is cooperative and trustworthy. In other words, you’d double-check to confirm the real deal. In this case, financial due diligence will be launched to examine the other party to weed out any possible threats that may bring harm such as loss of money, bankruptcy or a ruined reputation to the business you worked so hard to build. Financial due diligence goes both ways and is a win-win situation for everybody!
Why Wait? Start Now
Do not put off conducting your financial due diligence to the last minute. If you are a foreigner looking to build your business here, always start by conducting financial due diligence first. We understand that it might cost a little; however, the small costs will go far and give you the peace of mind when it comes to business affairs. One key thing to always keep in mind is safety never takes a day off, and neither should you (or your business!). Consult a reputable firm that works with finance and start your financial due diligence in Indonesia today!