Data quality due diligence checklist for a target's records

Why run a data quality diligence checklist?

A target's financials can look clean while the records behind them are fragmented, truncated or impossible to export. Data quality diligence tests four properties of those records: completeness, history depth, linkage and exportability. Testing them early surfaces integration costs while there is still room to negotiate. The same properties also overlap with what SourceX looks at when it qualifies a company for data licensing: history, breadth of systems and rights.

Use this checklist after the first management meeting, before the confirmatory diligence list hardens. It sits beside the rights and AI-claims work in the guide on AI washing in due diligence, and it complements the cash and revenue tests in the guide to building an ARR bridge.

The CHLE test: Completeness, History, Linkage, Exportability

Score each system on four questions. Anything that fails two or more needs a remediation plan or a price conversation.

Completeness

• Are there gaps in the record sequence, such as missing months, deleted ranges or ticket numbers that jump?
• What share of records has the key fields filled in (owner, date, status, outcome)? Ask for a field fill-rate report rather than a sample.
• Were any records purged under a retention policy, and is the policy written down?
• Are duplicates and test records flagged or removed?

History depth

• What is the earliest record in each system, and was there a migration that reset history?
• Are archived or retired systems still accessible, and who holds the credentials?
• Do the dates in the system reflect when events happened or when data was imported?

Linkage

• Can a customer, deal, ticket and invoice be tied together by a stable identifier across CRM, support and finance?
• Are outcomes recorded (won or lost, resolved or escalated, approved or refused), not just activities?
• Do employee and customer identifiers survive reorganizations and tool changes?

Exportability

• Who holds admin rights, and is the account owned by the company rather than an individual?
• Has anyone actually run a full export, and in what format?
• Are attachments, comments and audit logs included in the export, or only headline fields?
• Do vendor terms or contracts limit exports or require notice?

How to read the results

Which systems to test first

Start where the work gets done, not where it gets reported.

See the guide on engineering firm backlog due diligence for a sector-specific version and the quality inspection records checklist for manufacturers.

Where does a licensing lens help the deal team?

A target whose records pass CHLE has two kinds of value. Operationally, the acquirer can integrate faster. Separately, a US company with 50+ full-time employees at peak (contractors excluded), several years of documented operations and rights to license may be able to license those records to AI developers. The company keeps ownership; the data is licensed, not sold, and nothing is binding until the company signs.

Treat that as a separate topic from the purchase price, and raise it with counsel before signing so exclusivity terms and assignment clauses do not collide. The IT handover checklist covers the closing-side mechanics, and the guide on building a buyer list explains where data buyers sit alongside acquirers.

Red flags that should stop the clock

• The target cannot name who can run an export.
• History starts at a recent migration and the prior system was deleted.
• Customer or client records belong to someone else with no consent.
• Records are mainly consumer personal data or protected health information with no authorization or de-identification.
• A court, trustee or assignee controls the assets and has not been involved.
• Records were generated by AI to look like history.

Next step

Run one target through CHLE this week, using the company fit checker for a preliminary, non-binding read, and check the baseline on who qualifies. If a company passes and its sponsor agrees, register as a partner to introduce it. Partners earn 25% of the eligible platform fees SourceX actually collects, capped at $100,000 per referred company, payable only after the buyer pays and SourceX receives its fee. No reward is guaranteed.