Why do buyers have to worry about post-closing payments?

Buyers are typically responsible for post-closing payments when an escrow is released several months or years after a transaction closes, because often only the buyer remains.  The seller’s payroll department is either no longer in existence or the vendor relationship previously responsible for seller payroll has been terminated. In order to make post-closing payments such as working capital adjustments, escrow releases or earnouts, the buyer payroll department must recreate payroll records and make these payroll payments to people who are no longer employees. Buyers must generate the proper tax forms, calculate and make tax withholdings, send withholdings and documents to the IRS, and then pay and provide Form W2s to shareholders who have never actually been employed by the buyer. Acquiom® Compensation Payments greatly simplifies payments administration by freeing buyers and sellers from these burdensome and complicated responsibilities.

For more information, please contact us at sales@srsacquiom.com.

Posted in: Services: Compensation Payments