How Are Accounts Payable/Receivable Normally Handled In The Sale Of A Business?
Question:
What is a common practice for dealing with accounts payable/receivable when purchasing a business?
Answer:
In nearly all small business sales, the seller will retain the cash and accounts receivables, they will pay off the payables, and deliver the business "free and clear" to you.
In larger purchases, the buyers will likely acquire these balance sheet items to provide them with immediate working capital. However,
unless it is an especially large or complicated deal, you will usually not take the AR at closing.
With this being the norm, be certain that you have ample working capital available.
This article represents a fraction of what you’ll learn on this topic in the How To Buy A Good Business At A Great Price© series - the most widely used reference resource and strategy guide for buying a business. To learn more click here
What's More Important, Assets Or Income?
While this may sound like an odd question, rest assured you will encounter arguments for both answers while you're in the process to buy a business. I'm sure you've heard the sayin
Continue Reading >
Every Business Buyer Must Become An Expert At Reading Financial Statements
It can be difficult to cultivate great small business lessons from multi-billion dollar companies or executives however, one of the greatest stories I ever heard about financial st
Continue Reading >
Quickly Analyze The Numbers And Stop Falling For Old Broker Tricks
If you spend any time at all looking at businesses for sale, I guarantee you will run across a broker or seller (or several) who will only release financials on a business after yo
Continue Reading >
