Every business transaction contains an element of risk, yet at
the same time how satisfactory are the mechanics for managing risk?
In recent years we have witnessed just how costly the laissez faire attitude to risk was in many institutions from large corporations to smaller SME’s.
In the never ending quest for larger profits many of the disciplined measures of business were abandoned.
Analyses of recent business failures all have one common denominator – the architects of these calamities went hurtling over the cliff like lemmings.
There has never been a more pressing need to examine all areas of exposure; price risk, credit risk and liquidity risk.
In recent years we have witnessed just how costly the laissez faire attitude to risk was in many institutions from large corporations to smaller SME’s.
In the never ending quest for larger profits many of the disciplined measures of business were abandoned.
Analyses of recent business failures all have one common denominator – the architects of these calamities went hurtling over the cliff like lemmings.
There has never been a more pressing need to examine all areas of exposure; price risk, credit risk and liquidity risk.
It is imperative that appropriate credit checks are made on
potential customers before sales are made.
Another element of risk is non-performance by suppliers so again
it is vital that key suppliers are credit scored and suppliers risk is spread.
A thorough analysis of the current Debtors Book might make for uncomfortable reading but like most unpleasant tasks it should not be ducked.
It is far better to take remedial action such as a write down whilst you are in control of your own destiny rather than have a 3rd Party appointed to do it for you.
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