Get Your Closing Mechanics Straight: How to Avoid Deal Disaster When Buying or Selling an Accounting Firm

If you're buying or selling an accounting practice and your team can't answer the question, “So, what does closing day look like?” - you've got a problem.

A big one.

The closing mechanics of a deal are like the choreography in a Broadway show. Everyone (buyer, seller, attorney, lender) needs to be doing the same steps, at the same time, or the whole thing falls apart—and in deals, the curtain doesn't rise again for an encore.

Let’s break down the three most common closing approaches—and why they matter—so you can avoid rookie mistakes and get your transaction across the finish line.

Option 1: Simultaneous Sign and Close

This is the classic, old-school method.

In a simultaneous sign-and-close deal, the signature date, effective date, and closing date are all the same. You sign the documents, the money moves, and voilà—you own the business. But here's the kicker: you can't sign anything in advance. Once that pen hits paper, you're legally committed.

While this method is neat and tidy, it can also be totally impractical if:

• You need a tax clearance from a state agency

• Your lender won’t schedule a closing until they see a signed agreement

Spoiler alert: that’s most of the time.

Option 2: Delayed Closing with Conditions (a.k.a. “Let’s keep everything on track”)

Most of my deals are delayed sign-and-close.

Why? Because instead of waiting for everything to line up exactly right in a single moment so you can close, it lets you ease into it and start marking things off your list before the closing date. You can sign the purchase agreement and the seller can get comfortable enough to introduce you to a key employee.

Plus, strategically you want to take things off the table once they’re agreed to. By signing the purchase agreement, you make sure everyone has put their pens down on the major deal points.

But what happens if something important changes after the signing but before closing? Like the bank pulls its funding or a critical employee quits?

To avoid that nightmare, your purchase agreement should include conditions precedent—fancy legalese for “if X doesn’t happen, we’re not closing.” At the top of that list? Financing.

This is the structure I use to create what I call an anticlimactic closing. That’s right—boring is good. No drama. No surprises. Just a solid, methodical transfer of a business with:

• A signed purchase agreement

• Clearly defined conditions precedent

• A firm closing date triggered only when financing, documents, and logistics are all lined up

So, What Is Closing Then?

If you’ve already signed the purchase agreement, what happens at closing?

Glad you asked.

That’s when the money moves, and key deal documents get executed:

• Promissory Note

• Bill of Sale

• Assignment and Assumption Agreement

• Closing Certificate

These are the documents that actually transfer ownership and liability, and they need to reflect the reality of that day, not what everyone thought might happen a month ago.

A closing certificate, in particular, is your way of saying: “Everything I promised in the purchase agreement is still true, today.” So it’s great for closing the gap.

Option 3: The (Misunderstood) Escrow Signature Strategy

Ever hear someone say they want to “hold signatures in escrow” and nod politely while wondering what on earth that actually means?

Here’s the deal: there’s no official escrow agency involved. It’s not tied to title companies. It’s just a mutual agreement that both parties will sign the documents, but not make them effective until everyone agrees via email to “release” them.

It’s a legal fiction—but sometimes a useful one. Especially when you’re close to agreement but still working through the deal checklist. I don’t recommend it in hostile or highly contested situations, but it can buy you breathing room in a friendly transaction.

Choose Your Mechanics Early or Risk a Meltdown

Here’s the bottom line: your deal documents must match your closing plan. If you’re not aligned on how and when you're signing and closing, you’re setting yourself up for confusion, delays, and potentially catastrophic legal exposure.

And the worst part? Fixing a closing mechanic mistake after the fact is like trying to put toothpaste back in the tube—technically possible, but very, very messy.

Want to learn how to draft smart, airtight agreements that actually work in the real world?

Check out Deal Academy, where we train entrepreneurs and professionals to buy and sell accounting practices the right way.