Accounts receivable may or may not be part of a sale, for reasons similar to cash, as discussed last week. Where it is left in, it is typically matched up with the payables (i.e., the buyer takes over the receivables, and pays the payables). Specific things to look for when you examine accounts receivable are:

  • Review an aging schedule
  • Understand if there is customer concentration
  • Review any overdue / disputed accounts
  • Understand the amount held as a reserve for bad debts
  • If a buyer buys receivables, it should be clear who is responsible for any amount that is uncollectable by the new buyer.

In the meantime, if you would like more information on buying a business, contact us at 204-478-7266×110.