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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.

1 “Procurement Trends 2013” IFF Research

Overview

Manage financial risk in your supply base

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
Funding Revenue concentration
Altman Z score Financial controls

Example Report

Example Financial Analysis Model report excerpt

How it Works

Converting financial data into information

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

Process

“Anytime – anywhere” access to financial risk information

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.

Supplier Risk Management

Financial analysis as part of your Achilles supplier risk and compliance process

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


 

The Achilles Difference
Achilles acts as an independent partner, providing validated data and insightful analytics to enable buyers across a sector to identify and manage risk, and suppliers to increase market reach while increasing compliance and minimising costs for the network as a whole.
 


© 2013 Achilles Group Limited