Common use of Collection Methodology Clause in Contracts

Collection Methodology. Obtain a current listing of the lockbox/collection account(s) into which collections on purchased receivables are deposited. Compare this to the listing presented in the TAA. Examine the most recent bank statement/general ledger reconciliations for the 1-2 largest lockbox/collection account(s), noting the timeliness of completion and materiality of any unreconciled variances. Which entity’s name is on each of these bank statements? Ask management to prepare a schedule for Month#1 and Month#2 summarizing collections by obligor remittance location.