What is a common practice for dealing with accounts payable/receivable when purchasing a business?
In nearly all small business sales the seller retains the cash and accounts receivables (A/R). They will pay off the payables, and deliver the business "free and clear" to you.
In larger purchases, the buyer should consider acquiring the A/R to provide themselves with immediate working capital. Ample working capital is of utmost importance for successfully running the business after the acquistion.
As an added benefit, acquiring the A/R allows the buyer to begin dealing
directly with his most important assets - his customers.
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This information was provided by
Rose Stabler, Managing Partner at Certified Business Brokers in Houston, Texas.
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