We are two weeks away from closing, and the buyer is suddenly redefining our accounts payable in the net working capital calculation to force a price reduction. How do we handle this late-stage negotiation tactic?

Question

Tyler Smith · Accepted Answer

This is a common late-stage tactic designed to grind down your valuation when they know you are emotionally committed to the exit. Do not react impulsively. Take forty-five minutes of quiet Thinking Time to analyze the financial impact of their proposed change. Convert this stressful statement into a clear, solvable question: How might we structure the working capital peg to reflect our actual historical accounting practices so we do not pay a late-stage tax? Once you have clarity, hold your ground by pointing to the agreed-upon terms in the LOI. Remind the buyer that net working capital must be calculated using Consistent Accounting Principles, which means the exact same methodologies used to prepare the historical financial statements that they used to price the business. If they insist on changing the definition of accounts payable, then they must also adjust the historical baseline peg to match that new definition. This ensures an apples-to-apples comparison. By demonstrating that any change to the calculation must apply equally to both sides of the ledger, you effectively neutralize their attempt to slide in a hidden price cut at the finish line.