Ensuring Receivable Authenticity : 

Best Practices for Bankers

Vinu: Hi Manu, I'm working in a bank and one of our customers has a cash credit facility against their receivables. Do you know of any ways to verify the authenticity of their receivable claims, aside from just collecting invoices?

Manu: Absolutely, Vinu! There are several other methods you can use:

Confirmations: You can directly contact the customer's debtors to confirm outstanding balances.

Sales Records: Examining the customer's sales records can verify the existence of the sales that generated the receivables.

Payment History: Analyzing the customer's payment history with their debtors can reveal any unusual patterns or inconsistencies.

Aging Analysis: This can help identify any past-due accounts.

Credit Reports: Checking the credit reports of the customer's debtors can give you insights into their financial health.

Site Visits: In some cases, visiting the customer's or their debtors' premises might be helpful.

Bank Statements: Reviewing the customer's bank statements can verify whether payments from debtors are being received.

Industry Benchmarks: Comparing the customer's receivables to industry standards can help assess their reasonableness.

External Auditors: If the customer has been audited, their financial statements can provide independent verification.

Data Analytics: Using data analytics tools can help identify any patterns or anomalies in the receivables data.

Vinu: Wow, thanks Manu! That's really helpful. I appreciate the advice.

Manu: You're welcome, Vinu! Remember, it's best to use a combination of these methods for a more comprehensive assessment. And don't hesitate to reach out if you have any more questions.

OUR COURSES

Credit & Financial Analysis Mastery Bundle

Banking Premium Membership

Launch your GraphyLaunch your Graphy
100K+ creators trust Graphy to teach online
𝕏
CARAJACLASSES 2024 Privacy policy Terms of use Contact us Refund policy