Types of Risks Associated with Receivables. The risk related to receivables are:
1) Supplier Fraud Risk: The supplier fraud risk is the risk which the supplier may present the fake or duplicated pay order or invoice to the lender for financing.
2) Receivable Title Risk: The risk which the supplier has previously allocated or guarantee to allocate receivable to another financial institution.
3) Receivable Transfer Risk: The risk which against the law of not allowing the lender to accept the
good and ownership to receivable which may be allowed to be claimed by third party and also it may want the lender to take actions which he is not required to take.
4) Dispute Risk: The risk associated with the buyer not getting satisfied from the requirement of the payorder is known as dispute risk. It also consists of different risks and also third parties claim which does not require the level of granularity.
5) Discount Risk: The risk of the buyer not paying the full amount of the invoice leaving the supplier performance with the transaction. The buyer may take discount of not delivering the goods on time, in the regular working of business or by retaining some amount.
6) Payment Delay Risk: The risk that the buyer will Bannot give the payment on time is known as payment delay risk.
7) Payment Direction Risk: The risk that the buyer will give the payment to another party inplace of the lender is known as payment direction risk.
8) Buyer Credit Risk: The risk of losing payment because of financial weakness of the company is known as buyer credit risk.