--- title: "Buying a Business: Opening Books & First Year | MCC" description: "Record the purchase, set opening balances and keep closing documents. Worked allocation example." url: "https://mcc-solutionsnj.com/bookkeeping/guides/buying-a-business-opening-books-and-first-year-records" --- Bookkeeping guide · Updated October 12, 2026 # Buying a Business: Opening the Books and First-Year Records Buying an existing business gives you customers and equipment, but also a record-keeping job that begins on closing day. How the purchase price is divided among assets can matter for tax. That allocation is negotiated and documented by your attorney and CPA. Your books must then follow it faithfully. By [Matthew Coleman](/about), MCC Solutions **Quick answer.** When you buy a business, keep the purchase agreement, closing statement, asset list, allocation schedule if there is one, loan documents, bills of sale, lease assignments and any seller financing note. Record the exact closing date; everything in your books should trace to these papers. Want this handled for you? Monthly bookkeeping, cleanup and year-end close for small businesses. Start with a free health check of your books. [Free health check](/bookkeeping/health-check)[Get a quote](/bookkeeping/#interest) **Related:** [Owner contribution or loan](/bookkeeping/guides/owner-equity-and-capital-contributions) · [Closing entries and retained earnings](/bookkeeping/guides/closing-entries-and-retained-earnings) · [Void vs delete a transaction](/bookkeeping/guides/voiding-vs-deleting-transactions) **Free tools:** [Profit margin and markup calculator](/bookkeeping/profit-margin-and-markup-calculator) · [What should I charge per hour?](/bookkeeping/freelance-hourly-rate-calculator) [![Intuit ProAdvisor Gold tier badge](/img/credentials/intuit-proadvisor-gold.png)](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77)Gold tier in Intuit's ProAdvisor program. [See my Intuit listing](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77) Keeping your own books? Tallyfinch does invoices, bank import and reports on your computer. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) ## Collect the closing documents Keep the purchase agreement, the closing statement, the asset list, the allocation schedule if one exists, loan documents, bills of sale, lease assignments and any seller financing note. Record the exact closing date. Everything in your books should trace to these papers. Ask whether the deal is an asset purchase or an equity purchase, because the books differ. ## Record the purchase correctly In an asset purchase, record each asset acquired at its allocated cost: equipment, inventory, vehicles, leasehold improvements, and intangible items such as customer lists and goodwill. Record liabilities you assumed. Do not put the whole price into one account called Business Purchase. Your preparer needs the breakdown. Fees for lawyers, brokers and due diligence may be treated differently from the price itself. Track them separately. ## Opening balances for receivables, payables and inventory Verify the inventory at closing with a count, and the receivables and payables with the seller's reports. Agree in writing on who collects and pays items from before closing. Money received from old customers may belong to the seller. Keep a clear log of such items, and do not mix them with your sales. Deposits held for customers and gift cards outstanding are liabilities that often transfer. Find them early. ## Want us to handle it? We set up your books with you, or keep them for you every month, online for businesses in any state. **Price:** Free review of your books first, then a written quote before any work starts. [Get a free review and quote](/bookkeeping/#interest) [Done-with-you setup packages](/bookkeeping/done-with-you-bookkeeping-setup) ## Set up your own accounts and filings Open new bank accounts in the buyer's name and set up the employer and sales tax registrations for the new owner as required. Registrations of the old owner generally do not transfer automatically. Ask your advisor about successor liability for the seller's unpaid taxes and whether to obtain tax clearance from the state, where available. Set up payroll for any employees you keep, including new hire forms. ## Track the first year closely In the first year, reconcile monthly, compare actual results to the numbers shown during the sale, and keep a list of differences. Maintain a file on integration costs and one-time expenses. If seller financing is involved, record each payment split between interest and principal. Ask your preparer to review the first quarter's books so that any treatment issues are caught early. Keep a separate list of promises made in the sale, such as the seller's training period, a non-compete, holdbacks or earn-out payments. Each has a date and an amount that must show up correctly in your books. Review the list at every month end until the last item closes. Finally, schedule a check-in with your attorney and CPA after ninety days. By then the real numbers are visible and any needed adjustments to the allocation records or filings can be raised while the deal is still fresh. Bring the closing binder and your first quarterly reports to that meeting. ## Worked example with numbers You buy for $150,000: equipment $40,000, inventory $25,000 and the rest goodwill and other intangibles $85,000. Record each piece at its agreed value from the closing documents. Open receivables and payables only if they were part of the deal. Keep the purchase agreement and allocation schedule for your preparer. ## Mistakes that cost money Recording the whole price as one asset. Skipping allocation. Missing opening balances. ## Check your work Opening balance sheet should equal the closing statement. ## Common questions **Can I use the seller's accounting file?** Sometimes a copy of historical data is provided, but start a new file for the new owner unless your advisors suggest otherwise. **Who handles the allocation of price?** It is negotiated by the parties and documented with help from a CPA or attorney. **Do I inherit the seller's tax debts?** It can happen in some situations. Ask your attorney about protections and clearances. This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation. Let us handle it [### Monthly bookkeeping Categorizing, reconciling and monthly reports, with cleanup, payroll and NJ filings available. Bookkeeping →](/bookkeeping/) More guides - [Side Hustle Bookkeeping for People With a Day Job](/bookkeeping/guides/side-hustle-bookkeeping-for-people-with-a-day-job) - [Bookkeeping for Contractors and Builders](/bookkeeping/guides/bookkeeping-for-contractors) - [Restaurant Bookkeeping: Sales, Tips and Food Cost](/bookkeeping/guides/bookkeeping-for-restaurants) - [Bookkeeping for Real Estate Agents](/bookkeeping/guides/bookkeeping-for-real-estate-agents) Free tool - [Bookkeeping health check](/bookkeeping/health-check) [All guides](/bookkeeping/guides) Reach small business owners, freelancers and bookkeepers who read this guide: [advertise here](/advertise#bookkeeping). Do it yourself ### Business Valuation & Three-Statement Cash Flow Forecaster Enter last year and a few drivers; get linked statements that balance, a DCF value, and a grid showing how much the answer moves with your assumptions. 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