Network Trace
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02) Does your organisation have enough working capital to remain viable for the next 12 months?

June 1, 2020
Procurement Risk
Financial Stability

Answer yes if your organisation has enough working capital to remain for the next 12 months.

Suppliers provide critical services to many organisations, and without them organisations would struggle to operate. It is therefore important for your clients to understand the financial stability of their suppliers, as a financial failure within their supply chain may lead to business impacts, including delays, damaged reputations, lost revenues, and wasted time.

This is not a pass or fail test and many suppliers, such as start ups, might not have enough working capital to sustain their business for 12 months. It is important your client knows this as they may look to amend and shorten payment terms to help mitigate the risk.

Your client might ask for further assurance, such as visibility of management accounts to gain assurance that your company is maintaining good financial governance.

How to implement the control

This is not an implementable control. It is important that as a company you maintain good financial health and maintain a full set of accounts.

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Pattern Trapezoid Mesh

Defend against supply chain attacks with Defend-As-One.

No organisation is an island.