Every company faces risk
Risk: it can mean receivables going unpaid, refinancing efforts failing, liquidity shortages arising, damage occurring as a result of fraud committed by third parties or even a company’s own staff, or a company discovering that its resources are insufficient.
Damages may also arise as a result of problematic company processes, failure to implement checks, inadequate resource planning or improper communication channels.
Every company needs to recognise the risks it faces. The central focus of a risk-management system is thus to identify an individual company’s inherent risks and to evaluate the potential dangers that they may cause for the business. On this basis, measures need to be developed and processes must be set up within the business that effectively manage and monitor these risks with the purpose of avoiding harm to the entity.