Hi RoT,
Audited financials is the first thing. However, only annuals are audited so you have a gap where you need to fill in using the 10Q info. Other SEC filings may update 10Q info. Meetings with the CFO of the vendor often happen. But what is said about unreported quarters is handled very gingerly. Statements using previous quarters as guides are common but specifics of unreported data generally don't get discussed. Remember the infamous "break even based on orders in hand"? Even stuff like that can come back to bite you.
I also agree somewhat with nelzoni about the "going concern." However, when dealing with smaller companies that pops up a bit. The partnership arrangements Mr. Solms alluded to in the Q3 call helps there but I assume CFO meetings happened also on those accounts.
The risk manager rates different categories in addition to financials, company profile info, customer reference info, management, etc. I've even seen bug report metrics requested. Like the auditors, they make their decisions based on the best info available to them. That's why it is risk "management" and not risk "elimination."
If done properly, risk management starts when the short list of vendors is made based on RFP/RFI input. Ideally they are involved at the early stage so resources aren't wasted on companies that have no chance of passing their muster.
The real price negotiations for large commercial prospects start when you are down to the final 2 or 3 vendors. Pilots and POCs are over or just about over. Yes, the decision makers did some pricing up front but then the "buyers" get involved and they don't care about anything other than price and contract Ts & Cs. It can be very frustrating after all the previous work to get pushed right back to square one on items.
If I had a deal forecasted to get closed by the end of a quarter, it had to be in pricing and T&C negotiations a month before for me to be 80% confident. Anything after that dropped my confidence for the quarterly close timeframe, but not the deal close.
Smaller commercial clients without the buyer organization were much quicker. Those could just be a week between price negotiation and PO.
