How do I judge how many bottle deposits a water delivery business is still holding?

Bottle deposits look like income but behave like a debt. If customers paid a deposit when they received reusable bottles, someone may have to return that money when they leave. Ask the seller to show you how deposits are recorded, in what account, and how they reconcile to the number of bottles believed to be in the field.

Test the records. Pick a handful of customers and check that their deposit matches the bottles they have. Ask how lost or damaged bottles are charged, and whether deposits from long-gone customers are still sitting on the books. Ask where the cash actually is. If deposits were spent on operations, a buyer may end up funding refunds from new money. Your accountant can tell you how the deposit balance should be shown on the financial statements and how it might shift the closing numbers.

Put the issue in the purchase agreement. Your lawyer can help with a clause that either transfers the cash along with the obligation or reduces the price adjustment to match, so neither side is surprised after closing.

Key takeaways

• Treat deposits as a possible obligation, not as sales.
• Reconcile the deposit ledger to bottles customers actually hold.
• Decide in the agreement whether the deposit cash transfers with the obligation.
• Ask your accountant how the deposit balance appears on the statements and how it should be treated when the sale closes.