At CFO Strategies, we have built strong working relationships with many local and national banks. We support financial institutions by providing the knowledge, insights, and due diligence that can assist banks and lenders in making better lending decisions to prospective customers. One of the most important issues for a lender is to know that their customers can pay back a loan. The best way to ensure that a bank is making the right decision about lending money is to perform a field examination. A field exam is an evaluation of collateral supporting a loan so that a bank or lender can determine whether it is a sound decision to move forward with lending the money.
The most common types of collateral evaluated typically are accounts receivable and inventory, and it may also include an analysis of accounts payable, cash, and insurance. In addition, field examinations usually focus on an inspection of a client’s books and records and any assets pledged as collateral support.
Our team has experience performing field examinations for new and existing loans to help lenders assess their clients’ risk position, quality of earnings, operations, and other factors that result in better clarity for your lending decisions. We have had a variety of experience in areas such as general accounting and financial reporting and risk management to help you with these decisions.
We can customize our field examinations based on the needs of the lender. It can include, but is not limited to:
Overall Financial Review
- Comparison of actual financial performance against business plans and budgets, internal controls review, evaluation of the ability to meet payment obligations, cash management, tax payments and returns, compliances with rules and regulations
Accounts Receivable Services
- Review of financial statements, general ledger balances, cash receipts and disbursements, bank reconciliations, sales activity, accounts receivable aging, write-downs, and other adjustments
If Lending to Contractors
- Review of the work in process schedule, billing procedures for projects, job costing procedures, controls for estimated profits by project, evaluation of over and under billings and backlog
- Detail inventory report, reconciliation of detail inventory report to general ledger report, controls for inventory, analysis of adjustments for physical vs. recorded inventory, evaluation of the net realizable value of inventory, physical examination procedures
Taking the time to have this exam performed can save a lender money and reduce their exposure to risk. Our team is trained to identify risks and understand how a company’s accounting and internal control systems are designed as a result of broad and extensive experience in a variety of industries
It is our goal to ensure lenders have the information they need to make an informed decision. Contact us today if you are a bank or lender so we can help with a new or recurring business field examination.