By Don McClain | Founder & Principal, Medro Advisors. When buying a business with unfinished customer orders, reconcile deposits already collected with the work and costs still required. Identify which entity holds the cash, who must finish delivery and who receives the remaining payment under the proposed transaction. A deposit should not become assumed free cash while its associated obligation disappears from the buyer’s plan. Have accounting and legal advisers review the closing treatment and working-capital assumptions before agreeing to the handoff.
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