Asset Verification Services

Credit Management Association offers independent third-party asset verification to regional banks and other financial institutions that must confirm the value of business assets pledged as collateral by business borrowers.  CMA works with the lender to define the scope of the verification required, then prepares customized reports valuing any type of collateral, including accounts receivable, inventory, vehicles, furniture, fixtures and equipment.

By outsourcing Field Audits to CMA the Lender adds a layer of protection for the lending institution by creating a preferred safe distance between the lender and the borrower.  This is especially important when the lender finds it necessary to take legal action to protect its interests.  Lenders do not want to deal with potential lender liability issues, and this service is one additional safeguard against such claims.

With more than a century of experience with the administration of all manner of assets across the full spectrum of business categories, CMA provides a full-scope service for all asset classes at a reasonable cost.  CMA is a leader in training and assisting Credit Managers, and our experienced personnel know to look and listen for information that would be helpful to a lender that may not show up in ordinary reporting.

Making use of this service also lends itself to a more seamless transition should it become necessary for the lender to foreclose or liquidate the company since CMA handles those transactions routinely. Depending on the case, if a lender uses CMA’s Asset Verification Service and subsequently to handle the foreclosure or liquidation of the borrower, a reduced fee schedule is possible, depending on the situation.

To ensure accuracy, an independent CPA reviews all reports prior to final submission to the financial institution.

Fixed Assets

  • Examine and validate fixed assets to the borrower’s financial records.
  • Check on ghost assets and any property taxes associated with them.
  • Confirm insurance policy limits for adequacy of coverage.
  • Check on high-value items such as artwork and antiques and procure current appraisal.
  • Confirm property records – name of building owners, land and the actual cost of the property. Furnish photographs and a detailed report of the facility or site if needed.
  • Confirm company records – identify business partners, capital investors, business locations, taxes, vehicle ownership and payroll.

Inventories

  • Determine the type of inventory to be verified whether retail, wholesale or manufacturing.  Understand the reporting system.
  • Test for the mix, turns accounting and tracking.
  • Test for proper monthly closing cut-offs.
  • Field verifiers report on inventory values at the time of site verification and confirm to company’s financial records.
  • Test the inventory costs to the financial records and verify current market value or replacement value.

Accounts Receivable

  • Validate inventory or services to accounts receivable invoices.
  • Qualify accounts receivable invoices, statements and accounts receivable aging.
  • Check for contra accounts.
  • Confirm accounts receivable balances through customer mailing.
  • Review credit memos for timing and reason for issuance.
  • Verify cut-off dates for invoicing for month-end reporting.
  • Test concentration of high-volume customers.

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