One of the lesser known but no less important teams in Close Brothers Asset Finance and Leasing is our Asset Auditors.
We recently spoke with team leader, Peter Houghton, who shed more light on what it is exactly an asset auditor does on a day-to-day basis…
We’re a small diverse team of six asset audit Inspectors with a broad knowledge of the Asset Finance & Leasing Sector. Our key objective is to secure the loan book across a wide variety of divisions, including Transport, Industrial Manufacturing & Construction, Engineering, Print & Wholesale Fleet. Geographically, we cover the whole of the UK as well as the Republic of Ireland, with everyone based from home.
The team spends 4 days out of 5 working out on the road, visiting customers and offering an independent set of eyes and ears to the business. We ensure the assets we’ve leant against are in situ and not sold; are still in the custody and control of our customer and inside of the UK (unless a prior agreement has been made).
The auditing of our assets is an important part of the lifecycle of an agreement and our findings are supported by detailed reporting and photographs which are shared with the business and the wider credit community; higher risk cases are escalated to Credit & Collections.
Recommended branch action points are followed through with the branches until resolved and the audit is then closed and further diarised for a future audit check date depending on risk. Each auditor aims to complete 20 plus audits per month and over the course of a year our target is to complete in the region of 900 customer audit inspections.
Under what circumstances would you conduct an asset audit?
We audit all customers with an exposure of over £350k, with the exception of Scotland, which is £150k. With improvements to our customer data we will soon be able to better select the customers we need to audit based on market sector and the associated level of risk.
Our services are also extended to due diligence pre-lending audits as well as cases highlighted by the business of potential risk or concern. Prioritisation is key and the audit diary workflow is regularly reviewed to ensure the team is auditing where risk is perceived as the highest.
What are you looking for when you’re conducting an asset inspection?
We ensure the assets are being used for their intended purpose, that they are being properly maintained and are correctly insured and not being mistreated. We carry out our audit checks using various methods including on-line government website information checks, HPI, Operators Licensing and we also check – on site - the assets have the correct description, chassis / serial no. / registration number to ensure that we maintain our records and have a clear path to title in the case of repossession or litigation.
Our findings have uncovered the sales of assets requiring settlement, plus some found to be in breach of agreement; in poor condition or are abroad in countries operating without prior permission.
What are the benefits of an asset inspection for the customer?
Our customers are very busy and through our audit checks we often find we draw their attention to assets requiring their Immediate attention. A recent example was of a customer driving a vehicle with no MOT or Insurance. Highlighting to the customer his insurance excluded use for hire and reward, they had overlooked this as they primarily specialise in heavy crane hire.
The team is extremely courteous, and we take the opportunity to speak to our customers and find out how their business is operating, what challenges they may be facing and if they are planning to expand, potentially creating more opportunity for the sales teams. This is all important information that we share in our reporting and can be used to make better informed decisions.
In the near future the asset audit team will be integrating all customer audit reporting information findings into Salesforce. This will provide easier access for the wider business, making our work much more transparent and accessible. We are now sharing more information than ever before, working very closely with our Central Credit & Collections Teams and our local branch network to ensure our services are utilised in the most efficient, informative and proactive ways.
What are some of the more unusual assets you’ve had to inspect?
We audit a diverse range of asset types, for example; laboratory equipment, plant & machinery, trucks & trailers, car hire fleets, collectors’ cars, waste & general recycling and forestry machinery through to computer controlled lathe machines that make parts for Jaguar Land Rover and performance parts for Formula One teams. It’s a varied role, sometimes we can be deep in a quarry in mud and silt in the pouring rain wearing full PPE and other times we can be in an office checking information on car fleet management systems.
What’s life been like for you during the pandemic? How have you had to adjust what you do?
It was very challenging to begin with, customers were closing their businesses, their staff furloughed and we could no longer gain access to audit our customers and assets. However, my team quickly adapted to working through the height of the pandemic and through lockdown. New audit procedures were written and the auditing of our customers and assets continued in earnest remotely using on-line checks and HPI, wherever possible.
We saw a very slight decline in completed audits during March and April; however, the team adapted quickly and we were soon back out on the road sighting our assets..
We have held - and continue to hold - regular video calls to discuss core issues and also to take part in some light-hearted quizzes with other parts of the business. I am in touch with my team on a daily basis, providing them with the support network they need to stay motivated and focused during these challenging times.
Our business has been extremely supportive in providing us with PPE and now that parts of the country has eased restrictions we are able to see the majority of our customers while taking the necessary health and safety precautions.
Right from the start of the Covid-19 pandemic we’ve remained focussed on our core responsibilities and we continue to work extremely hard as a team to ensure the loan book remains as secure as possible. We would like to thank the whole business for their continued support - we all work as a team and good communication remains key to ensuring our business is protected.