Supplier Financial Risk Assessment Definition
When assessing supplier financial risk, organizations typically consider a range of factors including supplier creditworthiness, payment terms, historical financial performance, and country of operation. Given the importance of supplier financial risk in the current economic climate, many organizations have formalized their supplier financial risk assessment processes.
A supplier financial risk assessment definition typically includes a review of the supplier’s creditworthiness, payment terms, historical financial performance, and country of operation. The purpose of this assessment is to identify and quantify the financial risks associated with doing business with a particular supplier. By understanding the potential financial risks associated with a supplier, an organization can make informed decisions about whether to do business with that supplier and how to mitigate those risks.
