Completion accounts

Definition

Completion accounts is the older, and in the Benelux still dominant, price mechanic alongside the growing share of locked box. The principle is straightforward: at closing a provisional amount changes hands based on estimated working capital, and within 60 to 90 days after closing an appointed accounting firm draws up the actual completion balance. The difference between estimate and reality cash-settles.

The mechanic requires three carefully drafted SPA components. First, the working-capital peg: the 12-month average NWC that serves as reference. Second, the definition of "cash" and "debt-like items": anything not evasion-proof gets disputed later. Third, the dispute resolution procedure: who drafts the first accounts (seller-side standard), who reviews (buyer-side, with data-room access), how disagreements get resolved (typically escalation to an independent arbiter: Belgian CEPANI, Dutch NAI, or a jointly appointed Big 4 partner).

Compared to locked box, completion accounts offers one clear advantage: accuracy. Locked box fixes the price at a reference date that may sit months before closing; the actual closing balance is a guess. Completion accounts trades that accuracy for 2 to 4 extra months of post-closing work, with associated cost (typically €15-40k for the completion audit plus legal hours when disputes arise) and a prolonged window during which funds sit in escrow until the balance is final. For stable businesses with predictable working capital, locked box is typically faster and cheaper; for cyclical or fast-growing businesses, completion accounts remains safer.

In Benelux practice as of 2026 the market shares vary by deal size. Below €5m EV: completion accounts wins, largely because many smaller buyers don't trust the balance at a reference date months distant. Between €5m and €25m: roughly 50/50, with locked box rising. Above €25m: locked box wins, driven by PE buyers prioritising speed and running deep pre-closing DD. The choice gets locked in the LOI or early SPA phase and is hard to revisit later: so think about it early.

Worked example

A Rotterdam wholesaler was sold for €8m EV with completion accounts. NWC peg: €1.4m (12-month average). Provisional amount at closing: €8m - €0 cash + €0 debt + €0 NWC adjustment = €8m. Three months later the final completion accounts were drawn up. Actual NWC at closing: €1.55m (+€150k above peg), cash €240k, debt-like items €380k. Final settlement: €8m + €150k (NWC exceeds peg, buyer pays seller) + €240k (excess cash, buyer pays) - €380k (debt-like items, seller pays buyer) = €8.01m. Seller received a €10k top-up on top of the €8m closing payment. Audit cost €22k, split 50/50 per the SPA.

When it matters

For businesses with seasonality, fast growth, or where working-capital volatility is a material risk: completion accounts produces a fairer outcome than locked box there. Also in deals where buyer and seller don't trust each other deeply and an independent post-closing measurement is desired. Avoid completion accounts for very stable businesses under time pressure; locked box is typically faster there.

Frequently asked

How long does the completion accounts procedure typically take?

60 to 90 days post-closing for seller-side drafting, plus 30 days for buyer-side review, plus any dispute resolution. Total 3 to 6 months to finalisation. A portion of the price typically sits in escrow until the balance is final.

Who pays the cost of the completion audit?

Usually split 50/50 between buyer and seller as fixed in the SPA. Dispute-resolution costs typically fall on the losing party. Budget €15-40k of audit cost for a Benelux SME deal; higher for complex multi-entity structures.

What if buyer and seller disagree on the completion balance?

The SPA provides an escalation mechanism: typically a jointly appointed independent accountant (Big 4 or recognised M&A-DD firm) who decides the disputed items, with ruling binding on both parties. Takes 30 to 60 additional days and costs €10-25k.

Can I switch mid-process from completion accounts to locked box?

Theoretically yes, practically rare: the choice is locked in at LOI and renegotiation derails the whole process. Make this call before LOI signing; once in DD it's too late without commercial damage.