Financial Information to Request
- Three years of full accounts, not the filleted versions at Companies House
- Current year management accounts and the trial balance
- Detailed nominal ledger for the most recent full year
- Income analysis by revenue stream and by fee earner
- Aged debtor listing, split between clients and insurers
- Aged creditor listing and wholesaler statements
- Stock valuation with the count method and date
- Payroll reports by individual with contracts and holiday accrual
- Locum invoices for the last two years
- Equipment finance and lease agreements with settlement figures
- The lease, or title documents if freehold, plus any option to tax
- VAT returns and any HMRC correspondence
- Pet health plan membership numbers, pricing and the administrator agreement
- Out of hours provider contract including notice provisions
Questions About Earnings
- How much income does the departing owner personally generate?
- Ask for income by fee earner. If a large share belongs to the seller, that income is at risk and the earnings need adjusting for a replacement.
- Which adjustments are being claimed and can each be evidenced?
- Every add-back needs a document behind it. An adjustment described as a one-off that appears in all three years is not a one-off.
- Has anything been deferred to flatter the figures?
- Check equipment ages, maintenance spending and staff vacancies. A year of deferred cost is a year of inflated profit.
- Is the plan book real?
- Membership numbers, churn, pricing and whether members actually use what they pay for. A plan priced below the cost of delivery is a liability.
Questions About Risk
- Client concentration
- In farm and equine practice especially, how much income comes from the largest three clients and are any contracts up for renewal?
- Employment status
- Long-standing locums engaged as self-employed are a PAYE exposure that transfers on a share purchase. Ask directly.
- The lease
- Term remaining, security of tenure, repair obligations, rent review and whether the landlord is the seller or a connected party.
- Working capital
- What level does the business normally need, and what does the completion mechanism actually leave in it?
- Compliance and regulation
- Practice Standards Scheme status, medicines records, waste contracts and readiness for the CMA transparency requirements.
What to Do With the Findings
Each material finding becomes a price adjustment, a warranty or indemnity in the agreement, or a task in your first hundred days. If a finding does not end up in one of those three places, the diligence was an expensive reading exercise.
Written by Veterinary Accountants UK editorial team. Published 3 August 2026.
Last reviewed 3 August 2026. [REVIEWER DETAILS REQUIRED BEFORE PUBLICATION]
Frequently Asked Questions
What if the seller refuses to provide some of this?
Ask why. There are legitimate reasons, particularly around confidentiality before exclusivity. There are also illegitimate ones. A refusal to provide income by fee earner in a practice where the owner is the principal clinician tells you something on its own.
How much should due diligence cost?
It scales with the size of the transaction and the scope agreed. On any practice purchase it should be a small fraction of the price, and it is the cheapest insurance in the deal.