Cindy Fryer, Senior Director-Treasury, Endo Health Solutions presented at AFP Annual Conference 2012 her 10 tips for ensuring debt compliance which included:

1.    Policy objectives

• accurately determine in a timely manner your company's compliance with its debt agreements.
• maintain your company's access to the capital on the best possible terms by anticipating potential covenant issues and pro-actively manage your lenders accordingly.

4.    The compliance process should include:

• comprehensive covenant checklist, including the assignment of responsibility for each covenant to SMEs who are either knowledgeable about or can make decisions affecting that covenant.
• tailored quarterly questionnaires asking each SME with assigned covenants about the company's compliance with those covenants for both the current quarter and prospectively.
• calendar of due dates for all deliverables and fees.
• exception analysis, a quarterly report for the CFO review's on all identified exceptions/issues to the covenants with recommendations on whether the exceptions require lender reporting.
• quarterly archiving process for saving compliance work papers and all written compliance communications to the lenders.

6. Financial covenant procedures:

• regular forecasting of covenants on at least a rolling four quarter basis, forecasting that is based upon the company's current forecasting process (i.e., the forecasts are not made up by treasury).
• stress testing, determining how much leeway exists in each covenant before it is breached.

9. CFO review procedure before signing the certification letter

10. At least annual presentations on debt compliance to the audit committee of the board of directors.

Read more in the full article on AFP site.