Who Gets Paid for Work Around the Business Sale Closing Date?

A card payment can reach the bank after closing even though the seller performed the service before closing. A booking made by the seller can lead to work performed by the buyer. The deposit date alone may not answer who should receive the money.

Buyer and seller should agree on a workable cutoff rule, document exceptions, and give the closing team approved figures and instructions. This guide describes planning choices rather than a universal allocation rule.

Choose the event that determines entitlement

The agreement may allocate revenue by service date, delivery date, receipt date, another defined event, or different rules for different categories. State the exact cutoff date and time and how it relates to possession and operational control.

For a service business, one agreed approach might give the seller revenue for services performed before the closing date and the buyer revenue for services performed on or after that date. Whether that approach fits the deal, and how it affects financial and tax reporting, requires the parties’ advisers’ review.

Write down examples before approving the rule

Testing the language against actual operating patterns can expose gaps before closing. Identify how a service spanning the cutoff, a partially completed order, or a later price adjustment will be handled.

Address refunds, chargebacks, and prepaid obligations

• Late settlements: Identify the receiving account, supporting reports, and remittance deadline.
• Refunds and chargebacks: State the allocation rule, evidence required, notice process, and treatment of contested items.
• Gift cards and prepaid services: Identify outstanding balances, who honors them, and any price credit or reserve.
• Future appointments: Address deposits, cancellations, no-shows, and services delivered after closing.
• Receivables: Confirm which are sold, retained, or collected for the other party and how collections are reported.

Processor rules and account ownership may limit the operational choices. Confirm the arrangement with the processor rather than assuming payments can immediately move to a different merchant account.

Apply an agreed rule to expenses as well

Rent, utilities, subscriptions, staff compensation, supplier invoices, and other expenses may be billed after the period they relate to. Define the allocation basis, supporting records, proration method, and any estimate used at closing.

Identify expenses requiring separate treatment, such as an equipment payoff or a landlord-financed improvement. A routine rent proration should not obscure an obligation the parties agreed the seller would pay in full. Employment, contractor, payroll, and tax obligations need the appropriate advisers’ review.

Use a closing statement and a defined reconciliation process

Separate figures that can be finalized at closing from items requiring a later reconciliation. State who prepares the calculation, who supplies records, the deadline to object, the payment deadline, and how unresolved differences are handled. An agreed reserve needs an amount, purpose, authorized deductions, and release evidence.

A review date should not be confused with an automatic payout instruction. The escrow holder needs sufficiently clear accepted directions and does not decide an accounting disagreement simply because it holds a reserve.

Distinguish accounting work from escrow accounting

ColoradoTitle’s base business purchase escrow service includes its ledger and receipts-and-disbursements accounting using supplied, approved figures. Calculating transaction prorations, preparing a purchase closing statement, or administering a post-closing adjustment requires a separately agreed scope.

Provide approved figures and any holdback instructions with the Business Purchase Escrow Checklist. Coordinate them with the asset and account handover and any seller transition support.

Published October 24, 2026. General planning information; the agreements, applicable law, third-party requirements, and accepted escrow instructions govern a particular transaction. Examples are hypothetical. Neutral escrow is separate from individual legal or tax advice.