Estimated reading time: 6 minutes
Last updated: July 2026
A due diligence checklist is the practical companion to knowing what due diligence means: a working list of the documents and disclosures a buyer will expect before they complete an agency sale. Having this due diligence checklist ready before a buyer appears, rather than assembling it under pressure once they have, is consistently the difference between a due diligence process measured in weeks and one measured in months.
This blog looks at the key categories of items found on a due diligence checklist, organised into the areas buyers actually work through, corporate structure, finances, commercial position, contracts, intellectual property, systems, tax, and employment, so it can be worked through in order rather than treated as an undifferentiated pile of paperwork.
Download our free Due Diligence Excel Checklist
1. Corporate structure and ownership records
Buyers start with the basics: the share register, articles of association, and confirmation of who owns what. Where a business has multiple shareholders, this is also where any past share transfers, options, or side agreements need to be current and properly documented. Gaps here are easy to overlook because they rarely cause day-to-day problems, until a buyer’s solicitor asks for a document that was never formally filed.
2. Management accounts and financial reporting
Buyers typically want three to five years of management accounts and statutory accounts, ideally broken down by client or service line rather than presented as a single company-wide total. Reports that are consistent, produced monthly, and cover an extended period give a buyer far more confidence than a single retrospective set of annual figures.
3. Aged debtor and creditor listings
These show a buyer exactly who owes the business money, who the business owes, and how promptly both get settled. Slow-paying clients or stretched supplier terms are the kind of detail a buyer’s financial due diligence team checks closely, since they affect the working capital the buyer will need to fund after completion.
4. Revenue and margin by client
A single blended margin figure hides more than it reveals. Buyers want to see profitability broken down client by client, partly to understand where the money is actually made, and partly to spot client concentration risk before they price it into the deal themselves.
5. Commercial position: market and customer checks
Financial and legal due diligence confirm what has happened. Commercial due diligence tests whether it will keep happening, and this is where a buyer’s team goes beyond the numbers to speak with key clients directly, assess competitive position, and stress-test the growth assumptions behind any forecast. It’s easy to leave off a due diligence checklist focused on documents, since there’s nothing to file for it, but founders should still prepare an honest account of client dependency and competitive risk, since a buyer’s own conversations with customers will surface this regardless of what the paperwork says.
6. Payroll records and contracts of employment
Buyers check that payroll has been run correctly and that every employee has a current, properly issued contract. Where the sale involves a transfer of staff, this list should also flag anyone whose employment history or contract terms look unusual, since TUPE, the Transfer of Undertakings (Protection of Employment) regulations, governs what happens to their continuity of employment and any errors here create liability that survives the sale itself.
7. Material contracts, with change-of-control clauses flagged
Every current client and supplier contract should be easy to locate, in date, and reviewed for change-of-control clauses, terms that let a client walk away or renegotiate the moment ownership changes. For agencies specifically, this is one of the highest-value items on any due diligence checklist, since a buyer who finds several key clients carrying this clause will treat it as a direct risk to the revenue they are paying for.
8. Intellectual property and data protection
Brand assets, creative work, and any proprietary tools or processes need clear ownership records. Data protection compliance sits alongside this, along with modern slavery and anti-bribery policies, which buyers now treat as standard expectations rather than optional extras.
9. IT systems and data infrastructure
Agencies typically run on a stack of platforms, from project management and creative tools to client data storage and hosting arrangements, and a buyer will want these mapped clearly: what’s licensed, what’s owned, and what’s tied to a founder personally rather than the business. Where client work depends on specific software or subscriptions, an unclear picture of who actually holds those accounts and contracts is a common, avoidable source of delay.
10. Licences, permits, and regulatory compliance
Pensions auto-enrolment, health and safety practices, and working time regulations all get checked. None of these individually tends to stop a deal, but an accumulation of small gaps across several of them signals a business that has not been tightly managed, which affects both a buyer’s confidence and the price they are willing to pay.
11. Tax compliance records
Historic PAYE and National Insurance compliance, VAT treatment on any cross-border or agency-specific transactions, and substantiation for any R&D tax credit claims all belong on this list. Where a claim cannot be properly evidenced, HMRC clawback on an invalid historic claim becomes the buyer’s problem the moment the deal completes, and they will price that uncertainty in.
12. A signed non-disclosure agreement, before anything else goes out
Due diligence involves handing over client lists, pricing, and margin data that a founder would never otherwise share outside the business. An NDA covering everyone on the buyer’s side, including their advisers, should be in place before any of the items above are shared, not requested partway through.
Building this into a data room
A due diligence checklist is only as useful as the system it lives in. Structuring these documents into a data room by category, financial, legal, commercial, HR, tax, with consistent file naming, turns a static checklist into something that can be kept current as the business runs, and handed over in days rather than reconstructed in weeks once a buyer actually appears. ICAEW’s due diligence resources are a useful starting point for founders working with an accountant to structure this properly.
Working through this due diligence checklist is preparation, not a guarantee. It does not remove the scrutiny a buyer will apply, but it does mean that scrutiny moves faster, and that fewer findings arrive as surprises partway through negotiation. For a fuller picture of what happens once a buyer starts working through this list, and how findings translate into price, warranties, or indemnities, see our companion piece on what due diligence actually means for an agency sale and download your Excel due diligence checklist to complete.
This article is intended for general information and does not constitute legal, tax, or financial advice. Every sale process is different, and founders should take advice from a qualified solicitor and accountant on their specific circumstances.
Frequently Asked Questions
What should be included in a due diligence checklist for a business sale?
A complete checklist covers corporate and ownership records, financial reporting, contracts, intellectual property, tax compliance, and employment documentation. For agencies specifically, it should also flag change-of-control clauses in client contracts, since these carry particular risk in a service business.
How far in advance should founders start preparing?
Ideally a year or more before any sale conversation begins. Preparing a data room and reviewing a due diligence checklist while there is no live deal on the table means the work happens at a manageable pace rather than under pressure once a buyer has already been found.
Is the checklist different for financial versus legal due diligence?
The categories overlap in practice, but financial due diligence focuses on management accounts, margin, and forecast credibility, legal due diligence focuses on contracts, compliance, and employment matters, and commercial due diligence tests the business against market and customer reality. A thorough checklist covers all three, since buyers run them in parallel rather than one after the other.
Can an accountant or fractional CFO help prepare a due diligence checklist?
Yes, and this is typically where a fractional CFO adds the most value ahead of a sale. They can coordinate what financial and reporting documents need to be current, work alongside a solicitor covering the legal items, and help build a data room that a buyer’s team can move through quickly.
About the Author
ACC Finance Solutions provides fractional CFO leadership to scaling UK service and agency businesses. Founder Adam Cooper (ACMA) with over 20 years finance experience hosts The Fractional CFO Show, where the ACC team’s advisory experience, including the financial due diligence readiness covered in this article, is drawn from direct work with agency founders preparing for exit. To discuss preparing your business for a sale, book a call with Adam.
