The first step to rebuilding trust
The importance of knowing your customer has been reiterated time and again to SMEs and corporates as the economic climate has put pressure on business of all sizes. Yet this is also true for the lender and advisor market.
One of our clients, a leading UK bank, needed to take a closer look at one of its clients when it came under significant cash flow pressure after suffering a £250,000 bad debt.
This client, a specialist wholesaler of food stuffs, was a long-standing client of the bank having been with them for over 12 years. A cash flow review following the bad debt had supported the viability of the business, however a recent internal audit had brought mixed results, which led to the bank calling on the expertise of Hilton-Baird Audit & Survey to ascertain the true extent of the challenges facing the client.
Presented with a ledger of over £3.5m, made up of 1,400 debtors and running to over 600 pages of A4 with over 17,000 invoices being raised a month, Hilton-Baird moved quickly to undertake a full sales ledger audit which included an extended TDV in order to fully understand the issues at hand. On site just 48 hours after instruction, our team quickly compiled the required information and presented the findings to the bank in a detailed and concise report.
The result of the audit quantified the extent of breaches by the client and led to the directors of the business to accept that they needed to be completely honest with the bank in order to start rebuilding trust. Armed with the facts and the true extent of the problem the funder was willing to continue providing the facility necessary to support the client.
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