How do I check a furniture store’s customer deposits on special orders?

Ask for the open-orders report on a specific date. Each line should show the customer, the item, the amount paid, the date, the supplier order number and the expected arrival. Tick a sample against the supplier’s confirmation and the customer’s receipt. Gaps tell you the records are not reliable.

Then follow the money. Ask where the deposits are held. If the seller used them to pay bills, the purchase agreement should adjust for it, or you will deliver goods that were already paid for with money you never received. Your accountant can show how to reflect this in the closing figures.

Look at problems from the past. Ask about orders that were late, cancelled or refunded, how often suppliers fell short, and how the seller handled the dispute. These stories show how customers may react to a change of owner. Finally, check the supplier side. Some orders may be prepaid, some on account. Find out which suppliers need to know about the sale and whether they will keep honouring the orders. Your lawyer can draft protection for what is open at closing. Look at how the store communicates with waiting customers. Regular updates keep trust, while silence breeds refund requests. Ask whether the seller keeps notes of every call and complaint, since those notes will tell you how the customers feel before you meet any of them.

Key takeaways

• Get an open-orders list tied to supplier confirmations.
• Confirm where the deposit cash is held.
• Adjust the closing figures for undelivered orders.