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Financial Risk Analysis
Managing financial risk in your supply base
For professionals who source suppliers, manage contracts and maintain supply chain operations, supplier failure can have significant and damaging implications.
Supply interruptions caused by financial instability or failure are cited as the number one supplier management risk by buyers in organisations with £1bn+ turnover and the number two risk for all buyers in research commissioned by Achilles1.
Achilles’ Financial Analysis Model - developed in consultation with Deloitte - helps you manage these risks by providing a comprehensive and detailed insight into a supplier’s current and predicted financial status.
Our model provides a detailed financial assessment of suppliers:
|Current financial status of existing and potential suppliers||Predicted future financial performance of suppliers|
|Insight into suppliers’ internal financial controls and processes||Systematic and quantitative approach|
|Apply to individual, groups or all suppliers||Integrate with your Achilles supplier qualification and risk model|
Comprehensive financial data on suppliers
A report is generated for each company completing the model, containing summaries, detailed information and supplements on a comprehensive range of financial criteria:
|Summary of company financial situation||Revenue and cash|
|Balance sheet||Debt profile|
|Altman Z score||Financial controls|
Information supports your supplier management and sourcing:
|Dashboard style summary of financial status||Graphical representation of key ratios|
|Trajectory indicators of “Deteriorating”, “Stable” or “Improving”||Indicators compared to “Benchmark” data|
|Advisory flags||Interpretation guidelines|
Financial data throughout the supplier life-cycle
Financial data helps decisions not just during supplier sourcing but at all stages of the contract and supplier life-cycle. Financial risk management data from Achilles can be analysed alongside spend analysis data from your other systems and supports a range of disciplines across your organisation:
|Supplier sourcing||Contract management|
|Supply chain||Finance / spend analysis|
|Risk management||Business continuity|
Achilles’ secure cloud-based service allows authorised stakeholders across your organisation to access information from multiple office locations or whilst on the move.
A supplier's financial information can be viewed as a pdf report to access and view online or download.
Online data capture and validation
The foundation of the Financial Analysis Model is comprehensive information provided by your suppliers and validated through Achilles.
To deliver high participation rates we contact and support suppliers with the provision of information through a secure online questionnaire.
Our assessment teams validate the data and once complete we publish the resulting information and reports online for authorised buyers to view.
Our Financial Analysis Model can run independently or as part of a wider Achilles risk management programme.
Achilles provides comprehensive supplier risk management solutions across a range of qualification criteria. We deliver registration programmes for your total supply base – including risk models to stream suppliers into a tiered qualification programme.
This tiered model can include a basic registration, a comprehensive qualification questionnaire, specialist qualification (CSR, Finance, Carbon, multi-tier), and audits.
Data captured in the Financial Analysis Model can be used to “score” suppliers as part of your supplier qualification or short-listing approach.
Illustrative supplier qualification process including Financial Analysis Model