When selling a business, agreeing the price is rarely as simple as shaking hands on a number. Most deals involve adjustments to ensure the buyer pays a fair value for the company as it actually stands on the day the deal completes, not based solely on projections or last year’s financials. This is where Completion Accounts come in. They are one of the most common mechanisms used to finalise the purchase price and protect both seller and buyer.

Completion Accounts are a set of financial statements prepared shortly after the transaction completes, usually covering the balance sheet (and sometimes a short profit and loss period). Their purpose is simple: to show the true financial position of the business at completion and enable any required adjustments to the headline price. For example, if working capital is higher than expected, the seller may receive an uplift. If it’s lower, the price may be adjusted downward.

This mechanism is common in transactions because financial positions can shift quickly, especially in owner-managed businesses where cash, stock, debtors, or creditors may fluctuate right up to the point of sale. Completion Accounts provide a fair and transparent way to capture those movements.

What typically gets adjusted?

‍The most common adjustment is working capital. A buyer expects the business to come with a “normal” level of circulating cash, stock, and trade debtors/creditors so it can operate smoothly from day one. If the business has less working capital than expected at completion, the buyer may need to inject cash immediately, so a downward adjustment is applied. If it has more, the seller may benefit from an increase in the purchase price.

Other typical adjustments include:

• Cash – Ensuring excess/free cash is correctly recognised.
• Debt – Capturing loans, overdrafts, HP/lease balances, tax liabilities, and other obligations.
• Stock/Inventory – Ensuring it is fairly valued and saleable.

Because these numbers can meaningfully impact value, both parties invest time upfront to agree the methodology: definitions, accounting policies, and even the format of the Completion Accounts themselves.

Who prepares them?

‍Usually, the buyer prepares the Completion Accounts after completion, often using their accounting team or advisors. The seller then reviews and either agrees or disputes the figures. To avoid disagreements, the SPA sets out a dispute resolution process, often involving an independent accountant whose decision is binding.

How do they compare to a Locked Box?

‍A Locked Box mechanism fixes the price based on historical accounts and doesn’t allow for post-completion adjustments. Sellers often prefer this because it provides certainty. Buyers may prefer Completion Accounts because they reduce risk by reflecting the actual completion-day position. Choosing the right mechanism often depends on deal size, financial stability, and negotiation strength.

Why are Completion Accounts valuable?

‍Ultimately, they ensure fairness. They stop value being transferred unintentionally between parties and make sure the price reflects reality, not assumptions. For business owners, understanding Completion Accounts early in a sale process helps avoid surprises and smooths negotiations, leading to a cleaner, more transparent transaction for everyone involved.