What gets prorated on closing day?

Proration is unglamorous and it is where a surprising share of post-closing friction originates — not because the amounts are large, but because nobody agreed the method and both parties assumed their own.

The usual list

Rent and operating costs under the lease; utilities, ideally with meter readings taken on the day rather than estimated; realty taxes where the business owns the premises; insurance premiums if a policy is being assumed rather than replaced; prepaid service and maintenance contracts; annual licence and permit fees; and the payroll period in progress, including accrued vacation.

Payroll and vacation accrual deserve separate attention

A pay period rarely ends on the closing date, so someone funds the split. Accrued but untaken vacation is the larger figure and the one more often missed: it is a real liability the buyer inherits in a share sale, and in an asset sale its treatment depends on who employs the staff after closing. Settle both in the agreement rather than on the day.

Deposits are not prorated, they are assigned

A lease security deposit, a utility deposit or a supplier deposit is not an expense to apportion — it is an asset sitting with a third party. Whether the buyer pays the seller for it and takes the benefit, or the seller recovers it directly, is a decision the agreement should make explicitly.

Agree the method before the statement arrives

Most disputes here are about method, not honesty: whether a month is treated as thirty days or its actual length, whether a reading is actual or estimated, who chases a refund that arrives later. A short proration clause naming the convention and a post-closing true-up window removes nearly all of it.