How do I check a sporting goods store’s team and league sales accounts?
Ask for a list of team and league accounts with each one’s order history, then find out which are under contract and which depend on the seller’s relationship. Check how and when they pay, and compare the list with the books.
Team and league orders can lift a sporting goods store through slow months, or look bigger than they are. Begin with a customer-by-customer list: club, school, league or company team, what they order, when and how much. Look for accounts that repeat every season and those that came once. A handful of large accounts carries more risk than many small ones.
Next, find out how each account was won. Is it a bid, an agreement, a standing arrangement or a friendship? Ask whether any exclusive supplier status exists, and whether it transfers to a new owner. If a coach or manager buys because they know the seller, ask to meet them before you decide.
Then check the money. Team orders often involve deposits, fundraising and late payments, since volunteers collect cash from parents. Ask for aging reports showing what is owed and for how long, and match several invoices to deposits. Look at custom work too, such as uniforms or printing, where stock sits unsold if an order falls through. Your accountant can help you read the receivables, and your lawyer can read any written terms. Ask what happens when a team changes its mind, merges with another or folds partway through a season.
Key takeaways
- List each team and league account with order history and repeat pattern.
- Find out how each account was won and whether it transfers.
- Check aging reports and match invoices to money actually received.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentAccounts receivable
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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