The accounting section of a request list is the longest and the most mechanical, which makes it the easiest to prepare in advance. The intellectual property list is short and is the one most often incomplete, and an incomplete one can stop a deal rather than reprice it.
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The accounting list
Three years of profit and loss statements and balance sheets with year to date figures, tax returns that agree with them, trial balances, the general ledger for the period, bank statements and reconciliations, receivable and payable ageing, the fixed asset register with depreciation, inventory records where the trade has stock, and the add back schedule with evidence for every line.
What buyers check first
Whether the management accounts reconcile to the tax returns and, if not, why. Whether revenue ties to cash. Whether the add backs are documented. Whether anything unusual sits in the final month of a year. None of these is a trap; all of them are answerable in advance, and answering them in advance is what makes a seller look prepared rather than examined.
The intellectual property list
Registered trademarks and their owner, domains and who controls the registrar account, software and content ownership with assignments from every contractor and employee who created anything, licenses in and out, and any disputes. Ownership sitting with a founder personally rather than with the company is the single most common finding, and fixing it retrospectively takes weeks.
Questions people ask about accounting due diligence checklist
What if my books are on a spreadsheet?
That is workable for a very small business if the spreadsheet reconciles to the bank and the tax return. It is worth moving to proper software a year before a sale.
How far back do they go?
Three years for financial information is standard, with tax and anything with a long tail examined further back.
Who assembles this?
Your accountant, from your records. Budget for their time; it is a real engagement rather than a favor.