Moving money and high-value assets is a fact of life in any plant department, but how do you do so without straying on to the wrong side of the law?
Handling large amounts of money is practically the norm for plant managers in this region. Secondhand machines are constantly changing hands – and how many times have you heard stories about people coming into machinery dealers in the back of beyond and purchasing high value brand new kit with suitcases of used notes?
Additionally, it is often the way to have to pay suppliers of parts and workshop specialists with cold, hard, money. You’ll also get short shrift from some smaller contractors, such as one-machine crane hire firms if you try and pay them by any other method.
However, money flowing in and out can expose the plant manager to risk: Apart from the obvious threat of theft, the plant manager can also unwittingly expose himself to allegations of money laundering, especially when paying for contractor services, rather than tangible goods.
It is for this reason that many site managers have brushed up their book-keeping skills with the aid of computers. One such person is Graham Larkin, the plant manager of the JV consortium that built and is currently finishing the Dubai Metro.
We caught up with him a few months ago, and he described a software system that had helped when working on a previous job in Africa: “In a previous job in Eritrea, we did a survey [of the software available] and the government picked this one”.
The software in question is from a UK-based firm called TAG. In it, the program, a variety of ‘modules’ are interlinked and these contain values about the equipment being monitored.
Using the program is not too difficult for a trained operator. At the JV, there are two staff who work the database. Larkin explained; “If, for example, there is an issue for a part to a machine, you have got issues by work order, then that will show in the bold print all the open work orders, that will show all the machines being serviced. Select this work order number, and then directly issue parts to that work order number. So if we were to go back in a couple of weeks time, we would see that.”
He added, “We could go right back to the beginning of the project and track every machine and every cost… If we’d have used it from day one!”
He explained that if he were to do the project again, then even more integration would be useful: “There is also a purchasing module which we didn’t buy as the company already had its own purchasing software. This was a bit of a pity as we would have been able to track everything. If we were to do this again than we would do that.” Out of interest, the purchasing software that the JV uses it the popular ‘Timberline’ software package.
“When we have visits by the engineers, they were very impressed with the record keeping because it is what they wanted to see.”
Q&A
By the nature of his business, Steve Barritt from Jebel Ali auction house Ritchie Brothers has to deal with large sums of money as well as high value machines coming in from all corners of the world.
We caught up with him shortly after the house set a local record by selling a crane for US $1.7m
You have a lot money flowing in and out of the organisation all the time. How do you control that, and keep in with the various financial authorities?
That’s actually very easy, as companies associated with the US stock exchange means that we use SOCKS. That means all our cash flows through a main office in Graieda, in Holland. Obviously, we do have some cash come into us, but we send it straight to the banks. We endeavor to send money back to customers by bank transfer so it can be followed.
Do you get customers coming in and buying with a suitcase of cash?
Yes. Yes we do, I can’t hide that. However, the best way that we can control it is as soon as we have the cash, we have the name of the person and we have their identity we pass that straight to the banks.
Do you ever have any people putting equipment straight back into the auction after having bought it?
Yes we do.
And does that ring any alarm bells?
It depends who it is. We have people re-consign due to paperwork problems across the borders. Even the local market, Saudi, Kuwait [can be problematic]. The system have to use, although in Jebel Ali we are a freezone, everything we sell [as capable of being registered] must be register-able in Dubai.
So we use Tasjeel. Stamps that look concerning to Ritchie Brothers we bring Tasjeel in and they inspect it. If they are happy we will sell it as register-able, but the Kuwaitis may not agree with us.
So, you would do a certificate of no plate and Tasjeel would do a chassis inspection. The nature of the business is equipment movement very fast.
Has the time for buyers to receive cash reduced much in recent years?
It is and it isn’t. Anybody purchasing from Ritchie Brothers outside Dubai, particularly, and they are using US dollars, they can be audited in New York. Sometimes money takes 10-12 days to move through the New York bank – they check exactly where it is coming from. Generally though, it is quicker to move cash electronically.
So can be quicker, but there are more checks?
Exactly, yes.
What sort of paperwork do you need to provide as an international consigner?
International equipment that comes across the waters comes on a ‘bill of laden’, which turns into a bill of entry.
The equipment is checked by local customs. If there is a problem with that piece of equipment, it normally lights up on Interpol – we have just had it happen with one machine. Then local customs will check back where it came from. We actually had one here – it was confirmed as stolen in Montréal.
It arrived in our yard, Interpol was informed and the local customs were very good. The insurance company involved claimed the machine and the papers were corrected and we sold the machine on behalf of the insurance company. It still got sold, but it took three months for all the paperwork, but the authorities here were very good.
With the amount of equipment that goes through a large auction house, these things must happen from time to time?
Yes, of course. At the moment we are having a major problem with equipment coming from Ireland into Dubai. It’s not stolen, but it is equipment that has loans on it, and it has come in without permission from the banks.
They don’t have the same checks as the UAE. In the UAE, if there is a bank loan on a machine, then the bank’s name is on the document, but the UK and Ireland doesn’t have that. The UAE is very good, very tight, which is good for us.
What about security measures on machines themselves?
Most Cat and Komatsu machines now have hidden serial numbers. However, you need to find the machine, before you check the serial numbers!
