Buy-side reviewers want three things from your data room: numbers that reconcile, evidence that proves those numbers, and a structure that lets them test the story without getting lost. A well-built financial due diligence pack does that job. It shortens the review cycle, lifts confidence in forecasts, and protects value during negotiations for investment due diligence and M&A.

Understanding the Due Diligence Data Room

For businesses in Australia, a due diligence data room can be a game-changer. This secure virtual space allows for the efficient handling of sensitive financial information, facilitating clearer and more comprehensive evaluations during audits or transactions.

Why Choose a Data Room?

The digital age demands solutions that are not only secure but also efficient. Using a data room helps in:

• Organizing and sharing documents quickly and securely
• Providing controlled access to sensitive information
• Enhancing collaboration among stakeholders

Key Features of Data Room Software

To optimize the due diligence process, data room software includes features such as:

1. Advanced encryption for data security
2. User activity monitoring to track interactions
3. Customizable document permissions
4. Real-time access and communication tools

Benefits of Using a Due Diligence Data Room

Implementing due diligence data room solutions can provide a number of advantages:

• Firstly, they increase efficiency. By centralizing all necessary documents, parties involved can access the information they need without delay. This reduction in time spent searching for documents translates to faster decision-making.
• Secondly, the enhanced security protocols of data rooms protect sensitive financial information against unauthorized access or leaks. This gives all parties peace of mind, knowing their data is safe.
• Real-World Application: Australian Context

Many Australian companies have increasingly turned to data room solutions to handle due diligence requirements. For instance, during the mergers and acquisition process, these data rooms allow seamless access to necessary financial records, ensuring all legal and financial evaluations are thorough.

What the pack should prove

Your pack should demonstrate that:

• statutory reporting aligns with management accounts;
• revenue and margin are repeatable, not one-off;
• cash generation matches profit over time;
• axes, payroll and superannuation are paid and reported on time;
• forward plans rest on credible drivers and limits.

In Australia, companies must keep written financial records that explain transactions and permit a true and fair set of accounts to be prepared. Companies must retain these records for seven years under the Corporations Act, which ASIC administers (source). 

For tax purposes, business records generally need to be kept for at least five years. The ATO sets out the rules and exceptions in its record-keeping guidance.

Core financial statements and reconciliations

Include a clear file set for each financial year and year-to-date period:

• Audited or reviewed financial statements with the audit report and management letter.
• Management accounts by month and quarter: P&L, balance sheet, cash flow.
• Trial balance and general ledger extracts from your accounting system (Xero, MYOB, QuickBooks Online) for the same periods.
• Reconciliations that tie management accounts to statutory numbers, with bridge schedules for material differences.
• Accounting policies and any areas of judgement such as revenue recognition, impairments, provisions and capitalization thresholds.

Australian Accounting Standards issued by the AASB apply. They incorporate International Financial Reporting Standards, so revenue, leases and financial instruments follow AASB 15, AASB 16 and AASB 9. Link your policies to those standards and flag any recent amendments that affect your numbers.

Revenue quality and margin evidence

Help reviewers test durability and mix:

• Revenue waterfalls explaining growth by price, volume, new customers, churn, and FX.
• Customer cohort and retention tables, including contract start and end dates, notice periods and indexation.
• Top customer and product concentration with gross margin by segment.
• Contract samples with executed terms, change orders and pricing schedules.
• Deferred revenue and backlog roll-forwards that reconcile opening to closing.

If you use Stripe, eWAY or other gateways, provide settlement statements and a tie-out to bank receipts. Where usage drives billing, include meter logs or system exports that evidence quantities.

Working capital and cash

Working capital drives price adjustments and closing mechanisms. Include:

• Aged receivables and payables by month, with top-20 counterparties and any disputes.
• Inventory roll-forwards, standard cost build-ups, stock counts and write-down policies (Unleashed, Cin7/DEAR, NetSuite, or SAP exports).
• Bank statements for all operating and trust accounts, plus cash sweep or pooling arrangements.
• Debt agreements and covenant calculations with lender confirmations.
• Capex registers and approval workflows.

Add a 24-month monthly cash bridge: EBITDA to operating cash flow, then to net cash change, with commentary for swings.

Taxes, payroll and superannuation

Provide compliance proof and reconciliations:

• Income tax returns and notices of assessment.
• BAS and IAS lodgements covering GST and PAYG W, with ATO Integrated Client Account statements.
• GST reconciliations from the ledger to BAS figures, including adjustments and deferred GST on imports.
• Payroll: Single Touch Payroll (STP) finalisation reports, payroll tax assessments where applicable, superannuation guarantee payment confirmations and any salary sacrifice arrangements.
• FBT working papers and returns if relevant.
• R&D Tax Incentive claims with AusIndustry registrations and supporting calculations.

The ATO’s guidance on business record retention explains the five-year baseline and circumstances that require longer retention. Cite it in your index so reviewers can quickly confirm treatment. 

Forecasts, KPIs and sensitivity analysis

Forecasts should connect to operational drivers:

• A three-statement model with monthly detail for 24 months and annual to at least year five.
• Assumption book: pricing, win rates, churn, hiring plans, wage growth, supplier terms, FX, and capital intensity.
• Sensitivity and scenario runs that stress the key levers.
• Board packs and weekly KPI dashboards (Power BI, Looker Studio, Tableau) that management already uses.

Capital structure and commitments

Place these in a separate folder with strict permissions:

• Capitalisation table, option and ESOP registers, convertible notes and SAFEs with valuation mechanics.
• Leases with AASB 16 schedules, discount rates and maturity profiles.
• Related-party transactions with terms and transfer-pricing support.
• Contingent liabilities, guarantees and insurance certificates.
• Litigation schedule with counsel updates and estimates.

Systems access and extracts

Reviewers often request read-only system access late in the process. Pre-prepare:

• Accounting system user roles and audit trails.
• Data dictionaries for key systems such as Xero, MYOB Advanced, NetSuite, SAP, or Oracle.
• Export procedures so reruns match earlier extracts and column orders.

Align retention and disclosure practices with Australian requirements. For corporate record retention and statutory reporting, point reviewers to ASIC guidance. For accounting policy frameworks, reference the AASB portal that hosts the Australian Accounting Standards.