In order for credit risk to be controlled, it is important to integrate risk management tools into a standard business model.
The company that offers postponed payment, or exposes itself to third parties (customers, partners, and other participants in the business market), needs to conduct the assessment of the risk factor of each individual transaction. This is performed according to the volume which is placed with postponed payment, according to the company’s time ranges (30 days, 60 days, or more), or to the credit rating of the recipient.
- checking of the solvency of customers, partners, and other third parties
- determining the price of goods according to the payment method, and to the solvency of customers, partners, and a third party, i.e. the receiver (determining risk premium) reduction of bad receivables and costs of maintaining liquidity