The first document consultants send to their client after kicking off a project is the information request list ("IRL"), a shopping list of documents needed by the team to start the work.
Preparing a request list may seem straightforward and humdrum, but it is actually very time consuming. Senior team members, who are responsible for sending the IRL to the client themselves, will be heavily involved in this activity.
It is also a good idea to attach a preliminary version of the IRL to the engagement letter, so that the client can get a head start on gathering the necessary documentation before the project has even begun.
The list must be as complete and comprehensive as possible to avoid excessive (and frustrating) back-and-forths with the client. The trick is to be mindful of the data and information you will need to populate the different slides and sections of your report: get inspired by skimming through reports drafted for similar projects in the past.
The IRL should be created in Excel, as it allows you to:
keep track of what's pending, of the answers already provided by the client, and of any follow up requests,
quickly calculate the status of the requests (i.e. new, closed, partially closed, outstanding), and
set limits with regards to how different fields can be populated (e.g. predefined drop-down lists).
Here is our blank IRL template for your reference and use:
Coming up, we present examples of IRLs to be shared with clients when conducting valuation and TS projects.
IRL for Valuation
Say you are performing a business valuation. A standard valuation report is divided into the following sections:
Sector overview
Business overview
Financial analysis (historical and forecast, as relevant)
Valuation analysis.
For section 1, you need information regarding key competitors and their relative market share, as well as the relevant industry's historical performance and future growth expectations.
For section 2, you require information on the company's history, product and service offering, geographical presence, group and ownership structures, among others.
For section 3, you must receive historical annual reports and management accounts, as well as financial projections prepared by the company (if available and relevant).
Section 4 is based on the previous sections' data, analyzed and processed as deemed appropriate.
Based on the above, we provide an example of a non-sector specific IRL for performing a business valuation:
IRL for FDD
When carrying out a financial due diligence on a company, e.g. in the context of a potential acquisition, requests will be detailed by material financial statement item and tailored to the company's main business activity. We provide an example of a non-sector specific IRL for performing an FDD:
We hope you found this article useful. For questions or clarifications, feel free to reach out. Thanks for reading, and good luck!