Credit control and charity research Essay Example | Topics and Well Written Essays - 1750 words

Credit control and charity research - Essay ExampleThe providers background is unfathomable to RTE and so there is huge risk involved in making the payment early. What if payment is not done, supplier waives off from his liability, the goods promised are not provided? The preceding(prenominal) questions are examples of financial risk that the company features.To reduce financial risk RTE can do a confidence check on the customers financial history. To verify credit worthiness these are checks on the customers financial position (Gruening, 2000). To see whether a party is capable enough of making the impart payments, these checks are carried prior to accepting loan requests. Credit Bureaus run these credit checks and to verify financial data, various financial institutions are contacted. The companys credit score is then a measure of the companys credit worthiness and therefore a low credit score means graduate(prenominal) financial risk.To reduce their financial risk RTE can m ake use of references that are provided to them by customers. The mechanism is simple. A list of references is exchanged at or before the contract .Reference is one who confirms that the details provided by a particular person are legal or not. Verifying the details by on the whole references prior to making the payment can actually minimize Regeneration Through Charity Limiteds exposure to financial risk. By this they leave alone not expose themselves by paying anything that should not be paid. A true picture of the supplier can be obtained as the references are practically people and companies with good reputation (Weiss, 2000).Other option on hand to the company to reduce financial risk is negotiating. In the current case the supplier asks for fifty percent initial payment. New terms can be set between RTE and supplier which are beneficial to RTE. There is an option that the supplier might agree to lower the initial amount of payment to be made if the overall contract price is increased by a short margin.