Blog · Published 2026-10-18
Due diligence automation tools: what they check, and what they leave out.
Due diligence automation tools check what can be checked by reading documents against each other: whether the same figure agrees across them, whether two passages contradict, whether add-backs are supported and what is missing. They do not check what is not on paper, and they do not give professional opinions.
The checks, one by one
| Check | What it compares | What a human still does |
|---|---|---|
| Figure tie-out | Revenue, EBITDA, margin and net income across the CIM, statements and tax return. | Decides which version is right and why they differ. |
| Contradiction check | Two statements in the same or different documents that cannot both be true. | Asks the seller which one holds. |
| Add-back review | Each seller adjustment, its amount and its source page, with a first rating. | Obtains support and decides what to accept. |
| Coverage test | Debt service coverage computed from stated figures and financing assumptions. | Confirms with the lender, who applies the actual rules. |
| Gap list | Documents referenced but not provided; open questions in the text. | Sends the requests and chases the answers. |
| Management cross-check | What was said on a call against what the documents support. | Runs the call and judges the person. |
What no tool should claim
- A conclusion that a business is sound. Documents can agree with each other and still be wrong.
- A legal opinion on contracts, licenses or liabilities.
- A replacement for the independent quality of earnings analysis that a lender may require (for certain SBA 7(a) deals at $3 million or more from 1 October 2026; AAFCPAs summary).
- Accuracy figures that have no method behind them. If a vendor states one, ask how it was measured, on what documents.
How to judge any of them
Use the criteria table in the AI due diligence software guide, and run the tool on a deal you already understand. If you want to see what Deal OS does with the checks above, the sandbox has real briefs on synthetic deals you can open without an account.
Worked example from the sample brief
The checks above, applied to the sample brief:
- A claim contradicted by the document's own table. The CIM says on page 8 that no customer is more than 15% of revenue. Page 9 lists the top account (Northgate Property Group) at $1,366,000 against $6.21M of revenue, which the brief computes as 22.0%. The brief shows both passages word for word, each with its page, and marks the page 8 statement as false on the CIM's own numbers.
- A headline figure that two documents state differently. Trailing twelve month revenue is $6.21M on page 6 of the CIM and $5.95M as gross receipts on the tax return. The brief shows the $260K gap side by side and says to reconcile it before applying any multiple.
- A definition that changes what a number means. Page 7 says about 78% of revenue is recurring. Page 22 defines recurring as all revenue from accounts with an active inspection agreement, including repair and call-out work. The brief flags the two passages as inconsistent and asks for a revenue cut that separates fixed inspection billings from variable work.
- Add-backs sorted by whether they are likely to survive. The seller presents adjusted EBITDA of $1.42M. The brief itemizes the add-backs and rates each one; $90K of them are rated questionable or unlikely, which gives $1.33M that holds up on the documents. The arithmetic is computed, and the ratings are a first judgment for a human to confirm.
- A statement the documents do not support, thrown out. While drafting, the model proposed that the company has no outstanding litigation. No passage says so, so the verifier discarded it and the brief lists it in a verification log, with a request for a 10-year litigation history instead.
The example is Sentinel Fire & Safety, Inc., a synthetic company built to show the product. Nothing in it describes a real business, and the same output shape applies to a real data room. See the whole thing at /sample-brief.
See it on a deal.
Open a real brief on a synthetic deal without an account, or check how a single deal is priced.
