Mitigating Techniques for Commercial Risk/Summary: Difference between revisions
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There are four types of risk responses a seller can take regarding nonpayment by the buyer: | There are four types of risk responses a seller can take regarding nonpayment by the buyer: | ||
*Avoidance: Don’t sell on credit. | *Avoidance: Don’t sell on credit. | ||
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<div style="float:right;">[[Mitigating Techniques for Commercial Risk/Credit Insurance-Mitigation|Prev]] | [[Mitigating Techniques for Commercial Risk/Resources|Next]] | <div style="float:right;">[[Mitigating Techniques for Commercial Risk/Credit Insurance-Mitigation|Prev]] | [[Mitigating Techniques for Commercial Risk/Resources|Next]] | ||
[[Category:International | [[Category:International business]] | ||
Latest revision as of 19:27, 12 August 2009
There are four types of risk responses a seller can take regarding nonpayment by the buyer:
- Avoidance: Don’t sell on credit.
- Transference: Ask a third party to assume the risk, such as the buyer’s bank.
- Mitigation: Take precautions that reduce the probability that nonpayment will occur, such as performing a complete credit check.
- Acceptance: Establish a contingency allowance for nonpayment accounts.
A credit manager can choose one or more of the techniques discussed in this lesson as a means of managing the risk of nonpayment.