All contracts require a company to assume some level of contractual risk. Olvera Advisors helps you avoid them with a comprehensive Counterparty Financial Assessment.
It also helps contracting parties in their negotiation positions by ensuring the outcomes are clear before they enter into a contract.
Olvera’s counter party risk assessments operate in three phases:
Our team will carry out a financial assessment that corresponds to the scale, scope, and relative risk of a proposed project. Olvera is part of the NSW State Government Treasure Panel for service providers, enabling us to deliver in-depth financial assessment for any contracts.
Counterparty Financial Assessments are suited for businesses with one or more of the following concerns
Olvera’s counterparty risk assessments help identify and quarantine risk before entering into long-term or high-value contracts where performance failure has a significant impact on the project or your business.
Preparation of evaluation of the financial capacity of contractors or suppliers seeking prequalification for construction, facilities maintenance, general goods and services, ICT, trade services, complex medical diagnostic equipment, service consultants and other goods and services.
Preparation of evaluation of the financial capacity of tenderers before they are awarded a contract for construction or facilities maintenance, general goods and services, ICT, trade services, complex medical diagnostic equipment, service consultants and other goods and services.
Provision of update monitoring on a previous financial assessment and the ongoing evaluation of the financial capacity of service providers with contracts that are in progress.
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Neil Cussen, a leading authority in insolvency and reconstruction, offers 35 years of experience, excelling in asset tracing, business recovery, and cross-border insolvencies.
Tony contributes 15 years of insolvency experience to Olvera Advisors, with diverse industry expertise and a unique background in ASIC’s Enforcement Division.
Get answers to common questions about Counterparty Financial Assessment.
A counterparty financial assessment is the process of evaluating the financial health and stability of a business or individual about to enter into a contract with you. It is a necessary step that ensures your counterparty can meet their obligations and doesn’t put you at financial risk.
Counterparty financial assessment helps your business reduce non-payment, default, or contractual failure by your counterparty. By understanding the financial health of the other company, you can secure your cash flow and prevent costly disruptions to your business.
If you’re entering into contracts, credit arrangements, or long-term partnerships with any individual or business, you should consider conducting financial assessments of counterparties. This process is also especially important for industries with high financial exposure, such as construction, manufacturing, or financial services.
The level of financial assessment to be carried out should be correspond to the scale, scope, and relative risk of a proposed project. The table below indicates which reports are recommended according to contract value and contractor revenue.
| Contact Value | <$1.0 | <$10.0 | >$10.0M | ||
|---|---|---|---|---|---|
| Contractor Revenue | n/a | <$25.0M | >$25.0M | <$300.0M | >$300.0M |
| Basic | ✓ | ✓ | |||
| Medium | ✓ | ✓ | |||
| Comprehensive | ✓ |
Government agencies are responsible for determining the appropriate level of financial assessment required based on the factors above.
Turnaround times are based on the level of assessment and the priority level that a requesting party has specified. The time commences from the date and time the client request is agreed, and all documents have been received.
| Level of Assessment | Priority Level Standard | Priority Level Priority |
|---|---|---|
| Basic | 5 working days | 3 working days |
| Medium | 7 working days | 4 working days |
| Comprehensive | not specified | not specified |
The required turnaround times for comprehensive financial assessments are to be negotiated and agreed between our clients and Olvera.
Yes. Counterparty financial assessment is required in certain regulated industries, such as finance, banking, or government contracting. However, we encourage all businesses entering into contracts to engage in an assessment to safeguard their interests.
For businesses with complex and high-value partnerships, we strongly recommend hiring a third-party service or financial expert like Olvera to engage in counterparty financial analysis. This ensures your contracts are sound and avoid future complications, which can cause your businesses to even become insolvent.
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