Seller runs books on cash-basis, and will have a significant work in progress at time of close, and has asked how it will be handled. Assuming that the work in progress deal is closed prior to Seller and I closing on the business sale, and a 45% deposit is received, and some expenses are paid immediately with other larger materials/goods not payable until after Seller and I close the business sale, and final payment is also not received until after closing of business sale, what is the community-consensus best way to handle this?
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1) This issue is in addition to NWC. Determining target NWC is a challenge.
2) You get deposit minus purchases that have been paid.
3) Seller might ask for % of profit on the specific project if high % is complete. For example, is seller entitle to something if everything was done except the last screw?
4) If project is just received, make sure it is price properly.
5) Accounting practice and multiple simultaneous projects make life interesting..