Managing diligence costs across multiple advisors in an M&A transaction is a time-consuming task. Here's a closer look at the current challenges:
Tracking Dilemmas:
- Manual Monitoring: Deal teams often resort to sending repeated requests (weekly or bi-weekly) to advisors for updates on diligence spend to date and budget adherence.
- Pre-Meeting Scramble: Before crucial Investment Committee (IC) meetings, deal teams face the pressure of gathering and organizing scattered diligence cost information.
- Fragmented Visibility: A comprehensive view encompassing advisor fees, DD budgets, and IC approvals is often lacking in a single, centralized location.
The Invoice Impasse:
- Budget Overrun Disputes: Deal teams may encounter disagreements with advisors regarding final invoices,particularly when budget overruns were not communicated effectively or out-of-scope expenses were not flagged beforehand.
- Oversight Concerns: Ineffective oversight during the diligence process can lead to cost discrepancies later.
The Software Solution:
M&A software solutions can offer valuable tools for streamlining due diligence cost management.
Have you encountered challenges in tracking diligence costs as a deal team member or advisor? Share your insights in the comments below! Let's discuss strategies for gaining better visibility into M&A transaction expenses.