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What is a Bank Field Examination?

by | Mar 15, 2021 | PKF Texas - The Entrepreneur's Playbook®, Tax and Accounting Desk

Jen: This is The PKF Texas – Entrepreneur’s Playbook®. I’m Jen Lemanski, and I’m back again with Matt Goldston, one of our directors of our Entrepreneurial Advisory Services team, and one of the faces of the PKF Texas Bank Advisory Services team. Matt, welcome back to The Playbook.

Matt: Thank you, Jen. I appreciate it.

Jen: So, we’ve had some conversations – can you tell me a little bit, what is a bank field audit?

Matt: Certainly. A field audit or field examination is typically engaged by the bank, where we’ll go in and we’ll look at their client, we’ll review their banking agreement, we’ll look at the underlying assets that support balances that they’re reporting to the bank. So, it’s basically a third-party review in depth of their reported balances to a bank.

Jen: And what types of clients actually need these types of examinations?

Matt: Really, any type client that’s a bank client that has a revolving debt or an asset-based loan.

Jen: And we’ve been providing these services to clients, but I know that you’re an outsource CFO for several. What have you learned from being on the other side of the desk in this process?

Matt: Certainly. I was an outsourced, kind of a serial CFO, for a long time, and I’ve sat through a number of these. And these field exams typically feel like a brutal analysis, very quick, there’s not a lot of grace in it, and it’s really a difficult process when you’re on the receiving end of it.

Jen: And what types of things do they typically focus on?

Matt: So, a lot of times they’ll look at inventory balances, inventory turn, they’ll look at inventory values, accounts receivable, you look at concentrations, you review—are the balances that we’re reporting in line and in compliance with what the bank asked for.

Jen: Now is it as simple as just checking the box or is there a lot more to it?

Matt: You know, that’s the important part, and I think it distinguishes PKF from other companies that do field exams. We’ll go in and we’ll do the standard ongoing review, much like the bank is accustomed to, but having a consultant, CPAs, fraud examiners and valuation analysts – having those people on site – we look for opportunities to better the bank’s clients’ businesses.

Jen: If somebody wants to get in touch with us, what’s the best way to do that? Check our website?

Matt: I’d check the website or hit me up on LinkedIn. My phone rings all day, every day, on this front.

Jen: Perfect. Well, we will get you back to talk about some more topics soon.

Matt: Thank you very much, Jen.

Jen: For more information about a Bank Field Examination, visit PKFTexas.com/FieldExamination. This has been another thought leadership production brought to you by PKF Texas – The Entrepreneurs Playbook. Tune in next week for another chapter.

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