In many small-business-sale transactions, an asset sale is the method. The buyer is buying the name, phone/email/etc numbers, goodwill, inventory but not receivables and payables. As the transaction approaches, closing buyers and sellers begin to think of the reality of the receivables. Can the seller really collect after the business is no longer there and do they really want to? The payments are likely to come to the same old address no matter what communication efforts are made AND if you change the address for the old accounts will the clients maintain using that address for new accounts? If a check comes in to the routine address and has no invoice number associated with it, is it for old business or new business. It is all very messy.
To solve this, there are a number of methods to resolve it.
1) The seller can sell the receivables (likely at a discounted rate) to the buyer.
2) The seller can pay the buyer to receive payments and make agreement to apply checks in a specific fashion. Example: Apply receipts to oldest accounts first unless the payment has specific invoices referenced. This could be further refined to specify applying to accounts no more than three months old first, then buyer’s new accounts
3) Each check that arrives with no invoice referenced can be researched through the client’s office for appropriate application.
Note that having an address change for old payments and a new address for the new can be very confusing to clients. In business-sale transactions really, really try hard to not confuse the clients.
There are a number of other methods. Each business has unique billing cycles and collection track records. The process for each business-sale transaction will have a unique resolution. However, a wise seller will be working accounts hard before the close and immediately after to maximize collections before the new owner’s billings begin to go out.