Factoring Companies Guidebook
Client Record/Storage/Back-up/Retrieval
Definition
Copies of the Clients' sales ledger and other accounting records, both manual and computerised, providing a source of replication in event of destruction of the originals.
Concern
In the event of destruction of the Client's records, we may be unable to determine the sales ledger detail, which represents its prime security. Going concern problems are likely to ensue from such a disaster and should we be required to collect-out the ledger, detail of the amounts on which monies had been advanced must be assured.
Identification
Review and note the procedures in place, which dictate the frequency of the backups taken and where they are kept.
Enquire as to:
How often the back up of the computer system is completed e.g. daily/weekly/monthly.
Are copies of discs/tapes held securely off the main trading premises?
- Where is the backup held?
Does the business have a detailed contingency plan in the event of a fire, flood or other business threatening disruption?
Does the client hold L.O.B.D.R.I. (Loss of Book Debt Record Insurance) and if so, what are the conditions of cover & are we loss payee to the policy?
Treatment
Clients should be encouraged to adopt adequate security measures and regular reviews should be undertaken to ensure that such measures are being maintained.
