Businesses involved in international trade have to deal not just with risks locally but also other business development risks such as ethics, transportation, intellectual property, credit, currency, and a lot more. These risks can obstruct the smooth running of a business, and hence, we have taken appropriate measunike air jordan 1 new balance gesunder gang creme anti demangeaison apres rasage baskenmütze ανδρέας περρής ολυμπιακός asics gel sonoma 3 g tx cena Amazon max white shoes daft punk no mask sklz pro mini hoop xl basketball rouleau de massage facial Belgium pantalon siksilk jd hp envy 7100 blekk joe flacco jersey zapatillas nike air hombre negras pantalon siksilk jd res to limit their effects. Here are some risk commonly faced by Asasoft and effective ways to manage them.
Credit Risk: Credit risk is the risk associated with not collecting an account receivable. There are numerous ways in which we guard ourselves against this risk.
✔ Take payment in full [or a decent percentage of money upfront]
We take 100 percent of the amount owed, or a fair percentage, before rendering the services this can be used to cut down administrative expenses and finance charges. This eliminates the risk of non-payment. Although this may be difficult at first, it can worked out with little negotiations.
✔ Letter of credit
This refers to a commitment issued by a financial institution wherein the institution agrees to pay a set amount to the service/product provider in exchange for delivery within a set timeframe. This offer protects both the seller and the buyer examples are documentary letter of credit (DLC), standby letter of credit (SBLC). It includes a detailed description of the shipment as well as the terms of sale.
Intellectual Property Risk
This risk involves third parties making unauthorized use of the strategic information of a business or property that affects the value of services or products offered by a business, either directly or indirectly. These risk increases when doing business overseas because of the difficulties that exist in defeating business rights remotely. We avoid this risk by registering our corporate name before signing an agreement in any country. We constantly modify and improve our services and products to remain ahead of competition.
Foreign Exchange Risk
This usually concerns the accounts payable and receivable for contracts that are, or soon would be, in force. Foreign exchange rates are in fluctuation constantly. This is the reason why it is crucial that we have an appropriate exchange policy in place. This helps in stabilizing profit margins over sales made, mitigating the negative impact of fluctuating rates on sales and procurements, enhancing cash flow control, simplifying domestic and foreign pricing. Asasoft has identify foreign exchange risks to frame an effective policy thus essential to recognize the tools available for hedging these risks and carry out a comparative analysis on a regular basis for selecting the best tool available.
Ethics Risks
It is vital to maintain a high ethical standard when offering any product or service in the global market. We face certain questions pertaining to our values while doing international trade. Social conditions and customs vary from country to country, and hence, it is necessary to be especially vigilant. We make sure that our foreign suppliers and partners adhere to our values and rules regardless of where they operate from.
Shipping Risks
Whether you are shipping goods abroad or locally, you may face issues such as contamination, seizure, accident, vandalism, theft, loss, and breakage. Before shipping any goods to the buyers, we make sure to have sufficient insurance. The International Chamber of Commerce has laid down rules for each party involved in international trade, their responsibilities and necessary precautionary steps with regard to shipping risk.
Country and Political Risks
These are risks such as non-tariff trade barriers, central bank exchange regulations, or ban on the sale of certain products in specific countries. For instance, several countries have banned products obtained from certain animal species. There are certain things that are not under our control, such as sanctions, we are prepared in order to overcome them. Asasoft finds more information on such restrictions by checking the official website of the Ministry of Foreign Affairs and Trade for the specific country. Also we carryout basic research on the import/export allowances offered by the country we are interested to carry out your business in. There are many products that are prohibited or restricted in some countries. We check out all the rules pertaining to our target market in the country we are interested to carry out trade. We have obtain an export certificate to enable us trade globally.
It is better to be familiar with all this rules, risk and how to mitigate them while trading globally, rather than face hurdles at a later stage. This has help Asasoft operate without any hassles.
