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Assessment of counterparts

Counterparty evaluation by an experienced professional is an essential practice to avoid exposing your company to unnecessary and dangerous risks.

Business Intelligence

Assessment of counterparts

What is counterparty evaluation?

Counterparty evaluation is the process of determining the reliability of a business partner before entering into a delicate collaboration.

Banks, companies and professionals require this procedure from specialised agencies in order to avoid the high risks of doing business with unreliable or unsuitable individuals and companies.

Why require a counterparty evaluation service?

Counterparty evaluation is a valuable practice for today's businesses. Knowing the trustworthiness of your partners before committing safely to a business is essential for any organisation that does business with other people and companies, such as those establishing long-term contracts or joint ventures. Before entering into an agreement, therefore, it is necessary to be able to assess the financial stability, credit history and reputation of the potential partner.

Fraud prevention is one of the most important objectives of the counterparty study. For this reason, the service includes the verification of all information provided in the negotiation phase, as well as investigations into various legal aspects, such as registered offices, bank accounts, court documents and other sensitive information.

The investigation also extends to the financial situation, in order to ascertain the absence of debt positions and to calculate in advance the probability of default, the ability to repay debts or the risk of bankruptcy. All this is aimed at declining the partnership or taking steps to protect against possible future negative effects.

It is also crucial to investigate the factors that determine the reliability of the counterparty.

  • Company management
  • The size and experience of the operators
  • The financial condition of the company
  • Reputation in the sector
  • Profitability
  • Growth rate
  • The company's technological capacity and adaptability to new technologies
  • The security measures and risk management policies.
  • The sector in which it operates
  • Recent events that have affected the sector or specific companies within it.

Drawing on the right source of data is essential to ensure the success of the counterparty assessment, which is why it is a business intelligence activity that must be conducted by highly qualified investigative agencies.

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