If you’re contemplating an M&A transaction, buying a new piece of equipment or simply bringing on a new supplier due diligence is an integral part of the process. It’s essential to be confident click to read about the people you deal with, and it will help protect your company from risk.

As an entrepreneur, it’s crucial to be aware of the different types of due diligence and how they apply to your specific situation. In this article, we’ll go over five common types of due diligence that can be utilized across any industry:

Financial due diligence is the process of analyzing the financial performance of a business’s past and ensuring that the figures are accurate. This involves reviewing financial reports, evaluating the company’s performance and examining areas such as property, debt, and contracts.

Operational due-diligence has the aim of identifying any issues that may affect a company’s future success. Operational due diligence can uncover undiscovered risks, be it a lack in real estate, an outdated technology, or an inefficient utilization of resources.

Human resource due diligence is a thorough examination of a company’s workers. This includes looking over all documents and information regarding employees of a company such as contracts and compensation plans, and any pending litigation. It also assesses the company’s culture in regards to its perceptions of values, working practices and values.