Insight Associates provide outsourced accounting and Finance Director services to ambitious and growing businesses. We work as your only resource or with existing staff to give you complete financial support including monthly management accounts, high level financial advice, robust controls and financial systems, funding and business planning, payroll & compliance, VAT returns and statutory compliance.

Successful business leaders have all the information they need to make good decisions…Do You?

Tuesday, February 24, 2009

Managing risk ...

I was interested to see that a recent Ernst & Young study showed that 31% of the companies questioned had cancelled contracts with high risk customers, with nearly a quarter saying they had already seen a key customer collapse.

On the other side the reaction to perceived risk was mixed, with 42% saying they had broadened their supplier base to reduce the impact of the failure of a supplier, whereas 46% interestingly had taken the opposite approach and narrowed their supplier base in order to be able to negotiate better terms.

Whichever approach is taken, the message has to be all businesses must be looking around them and considering the risks that may impact their activities. Whilst you cannot always influence or manage certain risks which are outside your direct control, a vital step is awareness. It is critical that all businesses in the current climate manage all risks very closely to minimise the impact that these may have on them. Ask, what are the consequences of X or Y happening - however unlikely that may be. Then either take action, or put in place a system or process that monitors that risk and alerts you to changing circumstances.

All businesses have fragilities, the issue is recognising that and acting on it.

No comments:

Post a Comment

Let us know what you think!

Insight Associates, Insight House, Riverside Business Park, Stoney Common Road, Stansted Mountfitchet, Essex, CM24 8PL, UK
Tel: +44 (0)1279 647447 Fax: +44 (0)1279 814512
Insight Associates is a trading name of Financial Catalysts Limited. Registered in England and Wales Number: 5670047. Registered Office as above. Disclaimer | Cookies