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18 Financial risks you must add to your risk register to protect your business from financial disaster

by , 29 October 2014
If you haven't done a financial risk assessment on your company, you could be in serious trouble. You need this assessment to pin point where your company could run into financial difficulty.

If you don't, you might be on the road to financial disaster and not even know it.

Do a financial risk assessment on your business today and include these 18 financial risks...

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Your financial risk assessment might need to include these 18 financial risks

1. Exchange rate variation: This can cause financial loss when doing foreign transactions.
2. Fraud or theft in your business: Can lead to monetary loses.
3. Misallocation of assets: Can lead to financial loss cause financial loss.
4. Acquisition of goods and services at inflated prices: Can cause financial loss.
5. Overexposure to one finance or funding provider: Can potentially lead to you not having funds if that provider isn't willing to give more financing.
6. Salary payment to fictitious employees: Can cause financial loss.
7. Late payment of debtors: Can cause cash flow problems.
8. Taxation changes: Can cause a significant payment for your company to make to SARS.
9. New products or marketing companies launched by competitors: Can hinder the company's growth and even cause it to close down.
10. Natural disasters: Can cause business redundancy. Put controls in place to plan for this.
11. Computer software licensing fee increases: Can cause financial distress for the company.
12. Outsourced services: This can cause bad quality of services to customers and have a reputational risk to the company.
13. Stock loss: Can cause financial loss as well as reputational risk when you can't sell to the customers.
14. Legislation changes: Can cause business disruptions if not adhered to.
15. Loss of key staff: Can cause operation problems.
16. Overreliance on suppliers: Can cause stock outage if you can't get stock.
17. Overreliance on a customer: Can cause business continuity problems if your business loses the client.
18. Product or service reliance: Can be an issue if your business' existence depends on the manufacturing or sale of one product or service.
Determine whether your company has any of these financial risk areas so you can take financial risk management steps to prevent financial disaster today.
Check out the Practical Accountancy Loose Leaf Service for more on financial risk assessments. 

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