"Managing Trade Credit and Risk" addresses the critical challenges of conducting business internationally amidst the current global geopolitical crisis, which amplifies risks such as counterparty default and bad debts. We emphasize the importance of understanding trade credit risk to protect cash flows and balance sheets, making it feasible to expand into new markets.
Achieving a detailed view of total trade credit risk is often complex and time-consuming. Analyzing the risk of non-payment across an entire portfolio can be challenging, especially when finance departments manage trade credit risk rather than risk managers. This may create incomplete risk registers that don't cover the full range of exposures.
Harnessing data offers fresh approaches to this important area. For instance, a risk and analytics model can analyze trade receivables, creating actuarial forecasting on probability and loss default. By identifying the unique frequency and severity of potential credit risk losses, data-driven approaches enable risk managers to structure appropriate solutions.
Our book covers rating and spread of risk on aggregate portfolios, breakdowns of risk exposures by sector and geography, and ROI calculations. Real-time modeling of credit risk can enrich boardroom discussions and empower organizations to control credit risk and enhance resilience against global turbulence.