How do I review an IT support company’s monthly service contracts before buying?
Collect every active monthly contract and read them side by side. Look at what each one promises, how it renews or ends, how quickly the client can leave, and who signed it. Then match each contract to the invoices and deposits in the books to confirm it is real.
Ask for the full set of current agreements, not a sample. Put them in one sheet showing the client, the services covered, the renewal terms, the notice needed to cancel and the date of the last change. Gaps show up quickly. Some clients may be working on handshake terms, an old template, or an agreement that expired and was never replaced.
Read what the business promised to deliver. Response times, after-hours cover, included hardware and security monitoring are commitments you would inherit. Ask whether the team meets them today and whether any client has complained or asked for credits. Check how pricing can change, because a contract that locks in an old rate limits growth.
Next, ask who can assign or end each contract when the owner changes. Some agreements may need the client’s consent to transfer, so ask your lawyer which ones. Compare each contract with bank deposits and invoices to confirm that clients really pay. Last, ask which contracts rest on one technician’s relationship, since that person may not stay. Also ask how often the contracts are reviewed with clients and whether any were discounted to keep the account. A quiet renewal history is useful, but find out why each client stayed.
Key takeaways
- Build one sheet listing every contract, its services, renewal terms and cancellation notice.
- Match each agreement to invoices and bank deposits.
- Ask your lawyer which contracts need client consent to transfer.
- Note any client tied to a single technician.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
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