All businesses operate in an ever-changing world and need to continually assess the potential risks to their business and what measures they have in place to mitigate these risks. Your accountant is perfectly placed to assist you in reviewing your business (as an outsider) and assisting you to identify risks (some of which you may not have even considered). Below is a list, far from extensive, of potential risks that may affect your business:

  • Commercial Risks – risks associated with the market and the sustainability of the business.
  • Compliance/Legal Risks – relates to compliance with legal requirements and other regulations (i.e. licensing, contracts, human resources, etc).
  • Environmental Risks – includes consideration of environmental issues that might affect the business, including:
    • weather temperatures, cyclones, storms, floods, tsunamis and droughts; and
    • other environmental risks, including incorrect disposal of products.
  • Financial Risks – this is a very large risk area, including cashflow, interest rates, foreign exchange rates, debtors days/collections and stock turnover/obsolescence.
  • Fixed Asset Risks – damage, deterioration or obsoleteness of plant, equipment or building.
  • Operational Risks – includes:
    • communications and internet;
    • email;
    • website;
    • servers; or
    • electricity failures.
  • Organisational Risks – including:
    • key management leaving the organisation;
    • death or disablement of senior management personnel;
    • workplace bullying, sexual harassment, discrimination, claims, etc; or
    • workplace health and safety
  • Cyber Security Risks such as:
    • Data security and notifiable data breaches
    • Hacking
    • Ransomware
    • Phishing
  • Reputation Risks – including unprofessional conduct and false product claims.
  • Intellectual Property / Non-Compete Risks – who owns the intellectual property, clients etc. What protections do you have in place?
  • Security Risks – such as:
    • armed robbery;
    • brawls; and
    • theft and pilferage.
  • Stakeholder Risks – change of directors, shareholders, management team and key suppliers.
  • Technology Risks – continual improvements in technology to your business, keeping up to date.
  • Corporate Governance Risks – directors and management understanding their responsibilities and asset protection risks:
  • External Risks – risks over which the business has very little control, but to which some consideration should be given, such as:
    • wars; or
    • global financial upheaval, e.g.:
      • US / China trade war

Businesses need to firstly identify the risks which relate to their business, then develop strategies to minimise the risk, or have pre-prepared procedures in place, if a particular risk emerges.

If you would like to have a discussion with us in relation to risk management within your business, please do not hesitate to contact the office.