---
title: "Completion Accounts"
url: "https://mahouse.world/glossary/completion-accounts"
type: "glossary term"
topic: "Deal structure"
author: "Ihor Vlasov"
reviewed: "2026-09-20"
published: "2026-08-10"
---

# Completion Accounts

Completion accounts are a balance sheet drawn up as at the day a deal completes, used to adjust the price paid on that day for the actual cash, debt and working capital of the company. The buyer pays an estimated price at completion and the difference is settled once the accounts are agreed, usually within three months.

**Also known as:** Closing accounts, Closing balance sheet, Post-completion adjustment

## Key facts

- **Used at:** the price clause of a share purchase agreement, as the alternative to a locked box
- **Binding:** yes; the agreement fixes the accounting policies, the timetable and the dispute route
- **Prepared by:** usually the buyer, within 60–90 days of completion; reviewed by the seller
- **Adjusted items:** cash, debt, working capital against a target, sometimes capex and specific provisions
- **Disputes:** an independent accountant acting as expert, whose determination is final

## How completion accounts work in practice

Completion accounts give the buyer the price it actually paid for: if the company has more cash at completion than the estimate, the buyer pays more; if working capital is below the agreed target, the buyer pays less. The mechanism is fair in principle and contentious in practice, because the buyer prepares the accounts after it owns the company and the seller reviews them without access to the staff who wrote them. The share purchase agreement therefore spends pages on the accounting policies — in a fixed order of priority, deal-specific rules first, then the company's past practice, then the accounting standards — so that the same question always has the same answer.

The working capital target is the number that decides most of the money. It is set at signing on the basis of the company's normal level, averaged over twelve months to smooth the season; a company sold at its working-capital peak with a target set at the average hands the seller a windfall, and the reverse hands one to the buyer. For a payments company the "normal" level has to exclude merchant funds in transit and safeguarded balances, which are neither cash nor working capital.

The mechanism suits businesses whose balance sheet moves, and buyers who want to pay for what they get rather than what was there four months earlier. Sellers who want certainty at signing choose the locked box.

## Example

A buyer pays an estimated £24m for a lending platform at completion, on an enterprise value of £22m with estimated net cash of £2m and working capital at the £1.5m target. Its completion accounts, delivered 75 days later, show net cash of £1.7m and working capital of £1.2m — a £600,000 reduction, so the sellers repay that from escrow. The sellers dispute one item, a £150,000 provision for a customer claim the buyer added under a deal-specific policy; the independent accountant holds the policy applies and the £600,000 stands.

## Common mistakes

- Accounting policies left to "consistent with past practice" with no order of priority, so every line is arguable.
- A working capital target set on one month's balance sheet rather than a normalised average.
- No timetable, so the accounts arrive a year later, after the escrow has been released.
- Sellers who accept completion accounts without an information-access right after completion.
- Treating merchant funds, client money or safeguarded balances as cash in the adjustment.

## Related terms

- [Locked Box](https://mahouse.world/glossary/locked-box.md)
- [Working Capital Adjustment](https://mahouse.world/glossary/working-capital-adjustment.md)
- [Share Purchase](https://mahouse.world/glossary/share-purchase.md)
- [Enterprise Value](https://mahouse.world/glossary/enterprise-value.md)
- [Equity Value](https://mahouse.world/glossary/equity-value.md)
- [Escrow](https://mahouse.world/glossary/escrow.md)

— Ihor Vlasov, M&A FinTech Expert. Last reviewed 2026-09-20. https://mahouse.world/authors/ihor-vlasov