Risk Management Step 1 - Take a Profile
All organizations are faced with risks, ranging from destruction of assets by fire to lawsuits from customers. So how do you manage all of these risks? Well the first step in managing risks is to complete a Risk Profile of your organization. A risk profile assesses your risk by asking numerous questions. For example, does your business operate overseas? If yes, you may be exposed to exchange rate risks. Does your company execute contracts on a regular basis? If yes, do the contracts limit your liabilities? Are sales within your company largely dependent upon a single customer? If yes, you may be exposed to high levels of business risk.
Besides asking lots of questions, a risk profile is also developed by looking at past insurance claims and lawsuits within your industry. Physical inspection of facilities can uncover possible problems such as theft and employee injury. Interviewing employees can help identify several types of risks. Once you complete the Risk Profile, you will have a good understanding of different risks that apply to your organization. Your next step is to categorize risks so that you can properly manage them.
Written by: Matt H. Evans, CPA, CMA, CFM | Email: firstname.lastname@example.org | Phone: 1-877-807-8756