AR Due diligence
Accounts Receivable (AR) Due Diligence is a specialized audit that reviews the accuracy, validity, and recoverability of receivables in a company’s books. It is particularly important for lenders, investors, and acquirers to assess the quality of receivables before providing financing or entering into a transaction.
By validating receivable balances, assessing ageing, and identifying doubtful or disputed accounts, AR due diligence provides assurance on the true liquidity position of an organization and highlights potential risks to cash flow.
About This Service
Our AR due diligence services are designed to provide an independent and thorough review of receivable portfolios. We validate invoices, confirm balances with customers, and assess the recoverability of outstanding dues through direct and indirect procedures.
We perform detailed ageing analysis to identify overdue accounts, concentration risks, and doubtful receivables that may require provisioning. This ensures stakeholders have a realistic picture of receivable quality.
We also evaluate the efficiency of credit control policies, collection processes, and dispute resolution mechanisms. This provides insights into management effectiveness in maintaining liquidity and controlling credit risk.
By providing AR due diligence reports, we enable banks, NBFCs, investors, and acquirers to make informed financing and investment decisions while helping companies strengthen their working capital management.
Key Features / Scope of Work
- Independent validation of receivables and invoice accuracy.
- Customer balance confirmations and reconciliation.
- Ageing analysis of receivables with focus on overdue accounts.
- Identification of doubtful, disputed, or uncollectible receivables.
- Review of credit control and collection efficiency.
- Assessment of concentration risk in customer portfolios.
- Recommendations for provisioning and risk mitigation.
- Assurance for lenders, investors, and acquirers on receivable quality.
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