Risk associated with the monitoring of receivables
The Śnieżka Group continues and develops the receivables management policy it has adopted. Using as the foundation of its business the cooperation with proven long-term partners, the Group has achieved stabilization which is an important contributing factor for the collection of receivables. The Group actively manages its sales, for instance by establishing different trade credit limits for different customers depending on their financial standing and rate of growth of their business. This is possible thanks to efficient processes utilizing modern tools applied by the Group and cooperation with business intelligence units. The policy of managing trade credit limits and terms of payment is closely related to the bonuses granted to customers for timely payments, which provides further protection of the Group’s interests.
The Group’s sales transactions are also secured by mortgages on real properties, declarations of submission to enforcement and promissory notes applied on an as-needed basis in accordance with the scale of operations carried out with each customer.
Currently, the Group puts a lot of emphasis on the development of distribution channels to new markets. This, however, entails a certain degree of uncertainty as to the collection of all receivables. To cope with this challenge, the Śnieżka Group reduces the associated risk by securing its receivables due from newly acquired customers. Such action guarantees the inflow of receivables, thus eliminating the adverse impact of failed transactions on the maintenance of financial liquidity by the Group without losing the profitability of sales.
The Group also applies a policy of monitoring trade receivables between its members. Ongoing monitoring ensures the ability of rational management of receivables, which has a favorable impact on the effectiveness of the decisions made.
The Śnieżka Group’s plans include further actions aimed at continuously improving the Group’s processes of managing the risk related to the collection of receivables and provide for the implementation of a number of new solutions to improve the results achieved in this area.