How do I review a hockey pro shop’s pre-order and deposit liabilities?

Ask for the list in writing and test it. Pick a handful of entries and check each against the receipt, the supplier order and the bank deposit. Look for deposits that were spent on operating costs instead of being set aside, because that would leave the shop short when the goods arrive. Ask how the shop handles a customer who changes an order or walks away, and what it does with the deposit in that case.

Then look at the supply side. Confirm that each pre-order has a matching order with a supplier, and ask about delivery delays, cancelled lines and customers who have been waiting a long time. Team and club orders deserve special attention, since the balances and the timing are usually larger and tied to a season. A tidy ledger of deposits kept apart from daily cash is a better sign than a shop that cannot say where the money sits.

Finally, raise it in negotiation. Ask how the deposits will be handled at closing, whether the money moves to you or stays with the seller, and who answers for refunds. Have your lawyer put the answer in the agreement, and ask your accountant to review the treatment. Remember that the supplier may have been paid in full or in part already, so ask for those records too.

Key takeaways

• Test the deposit list against receipts, supplier orders and bank records.
• Check whether deposit money was spent on day-to-day costs.
• Settle in the agreement who delivers, refunds and holds the funds.