Risk management: down with debt

by David Knowles for Accountancy Age, 2010.

Firms are missing a trick by not offering debt and risk management to their clients, helping to prevent them from painting themselves into a corner.
Is it time for firms and in-house practitioners to adopt the role of financial futurologist? Should the accountancy industry increase the scope of value added services offered, accurately predicting future liabilities and offering consultancy on active capital and cash flow management, based on current and future trends rather than historic data?

There are significant untapped revenue streams to be earned from financial risk management consultancy, focussing on active financial management to supplement traditional, historic data analysis, especially for external consultants.

Debt management and identification of risk in many firms is still related to their own experience of an individual customer’s payment record. This blinkered approach ensures that thousands of clients each year experience significant write downs, or even go to the wall, because of an over reliance on retrospective audits rather than active financial management. (continue reading… )

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