The scope of any pre disbursement audit should include:

Company and Market - ownership, history, structure, market size, competitors and industry trends.

Management- Age, experience  and succession.

Fleet – size ,age, composition by manufacturer and model type, depot location, break even utilisation and pricing calculation, how strictly are return conditions enforced, how much is recovered , what hire system is used ?

Maintenance – compliance  with maintenance, training and inspection legislation e.g. LOLER.

Transport – is it in house, if so what capital recovery is achieved ? If outsourced, how is it recharged ?

Reporting -  Is the hire system integrated to the GL, what utilisation data is available per model and depot, what is the availability of the data? How accurate is the Financial reporting v budget ? Is there a cashflow report available per depot. Revenue composition ( Hire / equipment disposals). How realistic is the depreciation policy , do disposals generate a profit or loss, a cash surplus or deficit ?

Banking – who are the bankers, what facilities are provided, how are they secured, what are the “pinch points” in the  cashflow, what is the facility headroom ?

Customer base – concentration risks ( industry & customers), credit policy, credit terms, credit limits, ageing, stop list, bad debt, how much cross hire is conducted ?

Hire rates- who sets them, who can over rule, how often are rates over ruled?

Documentation – obtain specimen copies, are all contracts signed ?

Insurance- What cover is in place ?

Rationale for investment – replacement or additional equipment ?

In life Audit and Inspection – agree a frequency to physically inspect your assets or, for assets on hire, inspect the hire documents, invoices and hire payments back to the bank statement.