INDUSTRIES / WHOLESALE & DISTRIBUTION
Distributors run on thin margins and fast turns, which makes inventory and receivables quality the core of the credit. Our exams test how quickly stock moves, where it physically sits, and whether credits, rebates and returns are eroding the receivables you lend against.
RISKS WE TEST FOR
- Inventory held at third-party warehouses or in transit
- Consigned goods mixed with owned inventory
- Drop-ship sales where the borrower never holds the goods
- Vendor rebates and price protection netted against payables
- High dilution from returns, allowances and credit memos
- A small number of large retail or national accounts
WHAT THE EXAM COVERS
- Inventory by location, including third-party and in-transit stock
- Turnover and aging by product line
- Test counts and valuation to supplier invoices
- Credit memo, returns and dilution analysis
- Customer concentration and chargeback review
- AP analysis for contras, rebates and vendor offsets
COMMON INELIGIBLES
- Consigned inventory
- In-transit goods
- Inventory at locations without landlord or bailee waivers
- Drop-ship receivables before delivery
- Excess concentrations
- Chargebacks and deductions
Full ineligibles directory →