Now is the best time to schedule your Annual Risk Reviews.
Date: November 2014
The best time to schedule annual risk reviews on key suppliers and prequalified contractors has always been from November to January as this is when most financials are finalised, so the updates you get are based on fresh financial data. If your key contractors are registered for our Alert Service, you would already be aware of any major changes and associated public record items. However a regular check on their financial position will provide you with an extra level of surety.
And by way of introduction, (if you haven’t already registered your key suppliers to our Alert Service,) we will provide 12 months free registration on every company you place with us for annual review. To qualify you will need to place a minimum of 5 requests for annual review before January 30.
Since the GFC, many organisations have been under financial pressure and there is strong evidence that corporate failures are rising. Recent research showed that the number of Australian companies receiving warnings from auditors about their financial health has jumped to a higher level than that seen during the global financial crisis. Auditors in 2013 flagged “going concern” warnings to one in three companies listed on the Australian Securities Exchange. By comparison roughly one in five companies received similar warnings during the height of the GFC. This comes against a backdrop of company insolvency blowing out. Recent quarterly results show a 24 per cent rise in creditor voluntary liquidations, a 28 per cent rise in voluntary administrations and a 16 per cent rise in receiverships.
If you are running a panel or multiyear contracts, then the odds are one or more are experiencing some financial difficulty. You may have commissioned a financial review at the outset, but in this volatile environment, it pays to be proactive and undertaking regular reviews can provide you with significant insights.
- Organisations critical to your business – if they went under, what would the impact be? What would the flow on effect be?
- Contractors that are showing some of the early warning signs – (e.g. Poor quality, missed deadlines, variation claims, late payments to subcontractors.)
- Suppliers with multiple contracts, that may be taking on much more work that you originally envisaged or that may want to increase the level of its engagement
- Contractors that were considered marginal at the outset
- Contractors that have had multiple alerts relating to director changes, court actions or defaults.
If you want to know more, please don't hesitate to contact us.