Contras/Payables Concentration Clause Samples

Contras/Payables Concentration. Inquire of management regarding any known contra accounts. For any known contra accounts, obtain the receivable balance and the payable balance at month end Month#2. Confirm that any contra offset amounts are included in the ineligible receivables calculation. Attach your analysis as an exhibit to the report. Ask management to provide you with a listing of the 10-20 largest vendors (aggregating exposure among affiliated vendors including any accrued amounts) at month end Month#2. Review this list for potential contra offsets. For each of the large vendors that are also customers (i.e. contras), perform the following: • Verify the accuracy of their payable balance to the summary/detailed payables aging/list. • Obtain the total amount of purchases made from them over the last 3-12 months. • IF CONTRAS ARE SIGNIFICANT, obtain their daily payables balance (including accrued amounts) for the last two months (Month#1 and Month#2). • Determine which of these contra offset amounts (if any) are included in the eligible receivables calculation. • Attach your analysis as an exhibit to the report.