# What is a working capital peg in a dental practice sale? A working capital peg is the target level of current assets minus current liabilities a dental practice must deliver at closing, usually set from a trailing 12-month average (Dental Practice Insider). Any shortfall or surplus moves the price dollar for dollar, typically settled 60 to 90 days after closing (Minty Dental), as part of the [deal sourcing](https://ddsintel.com/deal-sourcing) process. By DDSIntel Editorial. Source: DDSIntel, https://ddsintel.com/deal-sourcing/working-capital-peg. Published 2026-10-28; data as of 2026-09-06. ## Key numbers - **12** months, the trailing period most often averaged to set the peg (Dental Practice Insider, 2026-09-06; https://dentalpracticeinsider.org/working-capital-true-up-dental-sale/) - **60** days after closing, the early end of the usual true-up (Minty Dental, 2026-02-27; https://mintydental.com/blog/dental-practice-working-capital-adjustment-surprise) - **90** days after closing, the late end of the usual true-up (Minty Dental, 2026-02-27; https://mintydental.com/blog/dental-practice-working-capital-adjustment-surprise) - **9** fields one comparison guide captures for every DSO offer, the peg among them (DSO Compare, 2026; https://dsocompare.com/dso-comparison-guide/) ## How does a working capital peg work? The parties close on an estimate of working capital, then reconcile it against the actual figure once post-closing books are final. Minty Dental says the adjustment moves the price dollar for dollar, usually within 60 to 90 days: below the peg, the buyer gets a refund; above it, the buyer pays more. The [working capital peg](https://ddsintel.com/glossary/working-capital-peg) definition is the short version. The peg protects the buyer from receiving a practice drained of operating liquidity, so the number and its definitions both matter. ## What accounts go into dental working capital? The purchase agreement decides. Dental Practice Insider lists patient receivables, supplies inventory and prepaid expenses, less trade payables, accrued payroll and accrued paid time off. It says most dental asset deals leave cash with the seller and exclude it entirely, while deferred revenue such as orthodontic contract fees depends on the deal. Patient credits and prepaid treatment usually become liabilities the buyer inherits, so they reduce working capital. Clause-level drafting is covered in [dental purchase agreement clauses](https://ddsintel.com/for/dental-purchase-agreement-clauses). ## Who keeps accounts receivable in a dental sale? Usually the seller. Choice Transitions says receivables are excluded from the price and stay with the seller 99% of the time. It describes three approaches: the seller collects, the buyer collects and remits for a set period while keeping a small fee, or the buyer purchases the receivables as working capital. If receivables stay with you, exclude them from the peg and define collection, fees and remittance timing. If they transfer, value them net of a collectability allowance and agree how aged insurance claims are treated. ## How is the peg set, and why does seasonality matter? Most pegs average actual working capital over a trailing period, often 12 months. Dental Practice Insider notes that dental production and collections are seasonal in ways that move receivables and cash meaningfully. Minty Dental warns that a peg set at a seasonal peak can produce an unexpected bill months after closing. Ask for the monthly data behind any proposed peg, and settle the method in the [letter of intent](https://ddsintel.com/glossary/letter-of-intent) rather than the final agreement. Pricing context is on [practice valuation multiples](https://ddsintel.com/data/practice-valuation-multiples). ## How do sellers avoid working capital disputes? Define everything in writing. Minty Dental says most disputes center on receivable collectability, inventory obsolescence and understated liabilities. Ask for a sample calculation exhibit, a stated accounting policy, an independent accountant to resolve disputes and a deadline for the closing statement, and check whether a [holdback](https://ddsintel.com/glossary/holdback) pays any shortfall. DSO Compare lists the working capital peg among nine fields to capture for every DSO offer. A true-up that follows the agreed formula is routine; a demand for a new price is a [re-trade](https://ddsintel.com/deal-sourcing/dental-practice-retrade). The lease is another term buyers test before closing; see [lease assignment in a sale](https://ddsintel.com/lifecycle/lease-assignment-in-a-sale). Public-record [transition signals](https://ddsintel.com/signals) do not show deal terms; DDSIntel publishes aggregates only. ## Frequently asked questions ### What is a working capital peg? A target amount of current assets minus current liabilities the practice must deliver at closing, with the price adjusted for any difference. ### Who benefits from a working capital adjustment? Either side. A shortfall reduces the seller’s proceeds; a surplus increases them. ### When is the true-up paid? Often 60 to 90 days after closing, once post-closing books are final, according to Minty Dental. ### Is cash included in the peg? Usually not in dental asset deals, which mostly leave cash with the seller; the agreement controls. ### Can DDSIntel set my peg? No. DDSIntel publishes aggregate education and [dental market data](https://ddsintel.com/data) only; use your CPA and transaction counsel. ## Sources 1. Dental Practice Insider. Working capital true-up in a dental practice sale (updated Sept. 6, 2026). https://dentalpracticeinsider.org/working-capital-true-up-dental-sale/ 2. Minty Dental. The dental practice working capital adjustment surprise (Feb. 27, 2026). https://mintydental.com/blog/dental-practice-working-capital-adjustment-surprise 3. Choice Transitions. How are my accounts receivable handled after the sale of my dental practice?. https://choicetransitions.com/why-choice/ask-the-experts/how-are-my-accounts-receivable-handled-after-the-sale-of-my-dental-practice-and-are-they-included-in-the-purchase-price 4. DSO Compare. How to compare DSO offers. https://dsocompare.com/dso-comparison-guide/ --- DDSIntel is a dental transition intelligence platform that detects pre-market dental practice transition signals for brokers, DSOs, lenders and the firms that serve them.