Which receipts belong to unfinished jobs?
Start with actual cash received and the customer contract behind it. Identify the job, payer, receipt date, amount, billing stage, and service promised. A bank entry called deposit may combine project cash, a refundable amount, or another type of payment.
Keep cash receipts separate from invoices and the assigned value of completed scope. The customer may pay before a task, at a milestone, or after completion under the actual terms. The buyer needs the schedule and work record to understand what remains.
Use the valuation hub for earnings context. A job-linked ledger helps seller and buyer assess future performance and funding without treating all deposits alike.
A unfinished-job deposit ledger links a customer's cash to contracted scope, completed work, recorded amounts, remaining costs, future receipts, and deal treatment. It is an original analytical control. It does not prescribe revenue recognition, tax treatment, or a required price adjustment.
What has actually been completed and earned?
Compare site notes, photos, inspection records where relevant, materials, time, and customer acceptance with the contracted scope. Identify completed work, work still underway, and work not started. A dispatch status called complete may not describe every promised task.
Ask the CPA how the target's accounting policy treats those facts. Separate the value assigned to a task in a budget from revenue that may be recognized under the applicable policy. Do not infer an earned percentage simply from the amount collected or billed.
The plumbing quality-of-earnings guide helps review timing and recurring costs. Reconcile amounts recorded in different periods, especially where a deposit was received before the work. A period with more cash receipts need not be the period with the same amount of supported earnings.
Keep each correction linked to its original amount and source record. That trail helps distinguish timing issues, unfinished duties, missing facts, and customer disputes.
What does the customer contract require next?
Read the scope, payment schedule, cancellation terms, changes, and completion conditions together. Identify what work the customer has paid for and which rights remain. Ask counsel about disputed terms rather than assuming that every payment is either refundable or final.
California CSLB's home-improvement contract guidance gives a local example of written scope, payment terms, and agreed changes. Those requirements apply within their stated context. Check the actual jurisdiction and project type instead of using a California consumer example as one national deposit rule.
Confirm access, materials, outside providers, inspections, and customer decisions needed to finish. A remaining cost estimate is incomplete if the job cannot yet proceed. Record the next condition and person responsible for arranging it.
Keep contract rights beside the planned handoff. If the buyer uses a new entity or changes the service, ask what notice or consent is required. A buyer and seller can allocate money between themselves without automatically changing what the customer is entitled to receive.
Which costs must the buyer fund after takeover?
Build the remaining-work estimate from tasks, staff time, materials, outside support, travel, and other actual needs. Distinguish paid historical costs, unpaid bills for past work, and costs of future performance. They may affect different parts of the closing and cash model.
Ask retained staff to explain a routine job and one with changed scope. Compare the plan with purchase orders, inventory, crew availability, and site records. A budget made months earlier may not reflect current quantities, timing, or labor needs.
Keep a supplier refund, credit, or reimbursement separate until its terms and status support the receipt. The buyer may need cash to finish before another party pays. Do not treat a hoped-for recovery as available working funds without showing the assumption.
Use the working-capital guide for the broader closing discussion. Assign every remaining task to a responsible person as well as a payer. The financial allocation should leave a workable plan to serve the customer.
What can one illustrative job reveal about cash needs?
Consider an illustrative ledger, with no real target data. Assume a $30,000 contract, $9,000 received from the customer, and $10,000 assigned to completed scope in the job plan. The assigned scope value is an example input, not an accounting conclusion about earned revenue.
Assume $6,000 of job costs have been paid from the receipts, leaving $3,000 in this simplified cash bridge. That is not proof that $3,000 remains in the company's bank or will be delivered to the buyer. Actual cash and deal terms require their own reconciliation.
Now assume another $12,000 of cost must be funded to finish before the remaining $21,000 of customer payment becomes collectible under the chosen terms. Even if the buyer receives the example's $3,000, it needs another $9,000 before completion. That gap excludes other costs, delays, and disputes.
The example shows why the deposit balance, unfinished-work cost, and unpaid customer amount are different inputs. It does not prove profit, a funding requirement for a real target, or a market deposit rate. Replace the assumptions with source records and actual collection timing.
Can the reports preserve the evidence behind each balance?
Request detailed receipts, invoices, credits, job status, costs, and remaining tasks. Ask which date range, filters, and fields were used. Check whether refunds or customer changes sit in another report or period.
ServiceTitan's report instructions describe filtered results and exports, including aggregated data. They explain why a summary may omit detail the ledger needs. The instructions do not prove that every target report contains complete deposits, cost records, or attachments.
Trace a sample from report row to customer terms, cash receipt, work record, and cost evidence. Find duplicated deposits, canceled jobs, misapplied cash, and balances linked to the wrong customer. Preserve the original trail when correcting a row.
Limit customer access to the agreed diligence purpose and record handoff. The buyer needs enough evidence to assess the work and balances without sharing private details with unrelated bidders. Name who will keep the accepted ledger current after takeover.
How should the ledger connect to the closing adjustment?
Read the purchase agreement's definitions before applying a balance. Decide which cash, receivables, inventory, unpaid bills, and customer duties the buyer receives or assumes. Different structures can require different calculations even where the operating job looks the same.
| Ledger field | Records to inspect | Closing question |
|---|---|---|
| Customer cash | Receipt, payer and refund history | What was paid and where is it recorded? |
| Completed scope | Job evidence and accounting review | What supports the earned amount? |
| Remaining promise | Contract, changes and next tasks | What work or refund is still owed? |
| Completion cost | Labor, parts and outside support | What must be funded? |
| Future collection | Billing stage, acceptance and disputes | When can the balance be collected? |
| Deal treatment | Cash, liability and adjustment definitions | Who receives, performs and pays? |
Use the working-capital peg definition to discuss the actual balances with the CPA. The add-back guide helps test whether a proposed earnings change removes a necessary cost. Explain each treatment so one duty is not silently deducted twice.
IRS's Form 8594 instructions address qualifying asset transfers and allocation. They do not determine the earned portion of every deposit or require the same filing for every structure. Give tax advisers the agreed assets, duties, values, and transaction facts for the reporting review.
What handoff keeps the ledger usable after closing?
Choose one routine job and one with a disputed payment or changed scope. Have the future manager find the contract, last receipt, completed work, remaining task, and expected collection. Ask the CPA to locate the same amounts in the books and model.
- Link each customer receipt to the actual contract and job.
- Reconcile completed scope, bills, credits, and the accounting treatment.
- Estimate remaining tasks, costs, access needs, and collection timing.
- Agree who receives cash, assumes duties, funds work, and handles refunds.
- Test record access and assign the next customer or site response.
Record each unresolved task, owner, due date, and funding. A receipt summary is useful, but the buyer also needs to finish what the customer paid for. The ledger supports the closing calculation and actual service.