Enterprise risk assessment: Features, benefits, and how to implement

Running a business means facing risks every day. Some are small. Others can have big financial consequences and shake your company’s future—and lower your enterprise value. A 2025 QuickBooks survey found that 45% of small business owners lost over $10,000 in profits due to low financial literacy, underscoring the need for better financial planning. 

That’s where enterprise risk assessment (ERA) can help.

ERA helps you find, understand, and manage risks early, before they turn into problems. It’s a smart approach for better financial management and long-term success. Learn more about ERA, how it works, why it matters, and how you can use it to grow your business.

What is enterprise risk assessment?

5 key components of enterprise risk management

How to implement enterprise risk management practices

6 types of risk that enterprise risk assessment addresses

Business tools your company can use for enterprise risk assessment success

Use Intuit Enterprise Suite to simplify strategic enterprise risk assessment

What is enterprise risk assessment?

Enterprise risk assessment (ERA) is a top-down, firm-wide business strategy to identify and manage potential risks before they disrupt operations. It looks at all areas of your business, and helps you make smarter, safer decisions. 

ERA spots everything that could harm your company’s goals, reputation, or financial health, including: 

• Market changes
• System failures
• Legal issues
• Natural disasters
• Cybersecurity breaches
• Supply chain disruptions
• Reputational damage

ERA is the first step of the broader process called enterprise risk management (ERM), which focuses on planning and responding to the risks you identify using ERA. Though often used interchangeably, ERA is technically just one phase of ERM.

How ERA brings teams and leaders together

Enterprise risk assessment takes a wide-angle view of your business. It brings together leaders across departments and calls for decisions at the top level. The idea is to make risk a shared responsibility, not something left to just one team.

Key elements of this approach include:

• Firm-wide visibility: Every area of the business is reviewed, from finance to operations to IT.
• Senior involvement: C-level leaders, including the CFO, play a central role in risk decisions.
• Transparency: Risks and responses are clearly communicated across teams and departments.
• Industry-wide use: ERM is common in high-stakes fields like aviation, construction, public health, finance, and insurance.
• Dedicated teams: Many companies build ERM teams, often led by a CRO to guide the strategy and keep it aligned with business goals.

5 Key components of enterprise risk management

ERM has five core components that work together to help you manage risk thoughtfully and consistently. These pieces make sure risks are understood, discussed, and acted on at every level of the company.

1. Governance and culture

Good governance sets the tone for how seriously your company takes risk. It ensures strong oversight and clear responsibilities from the top down. Culture shapes how people think about and handle risk each day.

Key focus areas include:

• Risk oversight by the board
• Clear roles and operating structures
• A culture that supports ethical behavior
• Shared core values
• Hiring and developing the right people

Together, governance and culture build a strong base for your risk efforts.

2. Strategy and objective setting

ERM helps you match your risk appetite with your long-term strategy. It ensures your team understands how much risk is acceptable and aligns goals to fit.

This step includes:

• Defining your risk appetite
• Setting clear, measurable business objectives
• Evaluating different strategies and paths
• Choosing goals that support your mission

By linking strategy and risk early on, you avoid surprises down the road.

3. Performance

ERM looks at how risks could impact your business goals and how to handle them. It helps you focus on the most serious risks and take action quickly.

Key tasks here include:

• Identifying and assessing risks
• Comparing risks against your risk appetite
• Choosing the right response—accept, avoid, reduce, or share
• Viewing all risks together as a full portfolio
• Reporting results to leadership and stakeholders

This step keeps risk tied to real performance.

4. Review and revision

Over time, your business changes, and your ERM process should change with it. This step helps you check if your plan is still working and adjust as needed.

You’ll want to:

• Review how well your ERM system performs
• Spot major internal or external changes
• Identify areas to improve
• Make updates to stay effective

It’s about keeping your risk strategy fresh and relevant to boost business efficiency.

5. Information, communication, and reporting

To manage risk well, people need the right information at the right time. ERM ensures you gather, share, and use data to protect your business.

This includes:

• Pulling insights from internal and external sources
• Using IT systems to track risk-related data
• Sharing updates across departments
• Communicating clearly to get team buy-in

When everyone understands the risks, they can take the right steps to manage them.

How to implement enterprise risk management practices

Enterprise risk management practices look different for every company. Your approach depends on your company size, industry, goals, and how much risk you're willing to take on. Still, a few best practices can help guide any business toward a stronger, more thoughtful ERM plan.

1. Define your company's risk philosophy

Begin by understanding how your company views risk—whether it’s risk-averse, risk-neutral, or risk-tolerant. Engage in strategic conversations with executives, department heads, and other key stakeholders to clarify your risk tolerance. Assessing your full risk profile will help define which risks are acceptable and which you need to avoid or mitigate.

2. Create action plans

Once you’ve identified your risks, outline clear steps to mitigate them. Define specific steps to protect your assets and safeguard your company’s future. For example, if a cybersecurity breach is a risk, your action plan might include isolating affected systems, notifying customers, and restoring data from backups. 

3. Be creative

Risk isn’t always predictable. While you can’t plan for every outlandish scenario, you should engage in scenario planning. It involves thinking through possible disruptions, such as supply chain issues, regulatory changes, or economic downturns, and determining how your business will respond. 

4. Communicate priorities

Make sure everyone knows which risks matter most. Share top risks across teams and clarify which ones to avoid. Also, explain what to do if a key risk does occur.

5. Assign responsibilities

Assign parts of your risk plan to specific roles, not just people. That way, even if someone leaves, their responsibilities stay clear. This helps keep your plan running smoothly at all times.

6. Maintain flexibility

Your ERM strategy should evolve with your company. As you grow or change direction, your risks will change too. Stay flexible so you can adjust without starting from scratch.

7. Leverage technology

Use ERM software, enterprise resource planning (ERP) systems, or digital dashboards to organize everything in one place. These tools help you track risks, run reports, and monitor internal controls in real time.

8. Continually monitor

Don’t set it and forget it. Check in regularly to see if people are following the plan. Track how well your risk responses are working and where improvements are needed.

9. Use metrics

Set clear, measurable targets using simple tools like SMART goals. These help you know if you’re on track and hold teams accountable for results. You can also set KPIs for your business and measure them regularly.

6 Types of risk that enterprise risk assessment (ERA) addresses

ERA can help your company prepare for almost any type of risk that could threaten its survival or slow its growth. These risks come in many forms—some are external, some internal—but all can affect your enterprise value. Below are the main types of risks ERM can handle.

Compliance risk

Compliance risk arises when your business fails to meet rules, laws, or standards. This could mean not following tax codes, industry regulations, or financial reporting requirements like GAAP. It can lead to fines, delays, or a damaged reputation. ERM helps make sure teams know the rules and follow them on time, every time.

Legal risk

Legal risk shows up when your business faces lawsuits, contract disputes, or penalties tied to legal obligations. For example, a disagreement over billing terms with a vendor or partner could result in costly litigation. With ERM, you can reduce this risk by keeping contracts clear, updated, and well-managed.

Strategic risk

Strategic risk threatens your big-picture goals. Think about new competitors, changing customer habits, or market shifts that make your strategy obsolete. For instance, if you’re the lowest-cost provider but someone else offers a cheaper solution, your entire business model is at risk. 

Use strategic financial planning to ensure your financial strategy aligns with your broader goals, and integrate ERM to identify these risks early.

Operational risk

Operational risk impacts your day-to-day functions. It includes everything from power outages to supplier delays to natural disasters. If your warehouse floods or your delivery system fails, you could lose time, money, or customer trust. ERM plans help you prepare for—and bounce back from—these disruptions. A warehouse management system can help, too.

Security risk

Security risk involves any threat to your physical or digital assets. This could be someone stealing client data, breaking into your office, or misusing company systems. Weak security can damage trust and bring legal trouble. Having efficient enterprise business intelligence (BI) and ERM helps tighten controls and keep your information and property safe.

Financial risk

Financial risk affects your company’s money and stability. It includes issues like interest rate changes, credit problems, and currency fluctuations. For example, if you operate globally and the dollar drops in value, you could take a hit. ERM keeps your financial risks visible and manageable.

You can also use tools like Intuit Enterprise Suite (IES) to manage financial risks and improve decision-making. IES offers real-time financial reporting, AI-driven forecasting, and automated workflows to help you identify risks early and adjust your strategy quickly.

Business tools your company can use for enterprise risk assessment success

To get the most from enterprise risk assessment, you need more than spreadsheets or one-off reports. You need the right business tools that can connect the dots and turn insights into action. When choosing a tool, look for the following features to manage your enterprise performance smoothly.

Unified data management and reporting capabilities

A successful risk assessment starts with clean, organized data. If your financials, sales, or operations data live in different systems—or worse, aren’t accessible at all—it’s nearly impossible to get accurate results.

Integrated platforms like Intuit Enterprise Suite give you one place to manage your data, track inputs, and generate real-time reports. With a clear view of everything in one dashboard, you can build your ERM strategy on solid ground.

AI-powered forecasting and financial planning

Predictive analytics can show you what might happen next, but that’s only useful if it feeds into your planning process. Your team needs to take risk scores, projected losses, or trend data and plug them into your overall strategy.

Modern platforms like IES do just that. With built-in business forecasting and advanced business intelligence capabilities, they combine risk insights with financial planning tools. This helps you prepare for what’s ahead and build smarter, more flexible budgets.

Features for automating financial workflows and payments

Knowing which transactions carry higher risk is valuable. Acting on that information automatically is even better. Predictive insights can help trigger payment holds, approvals, or added checks for flagged activity.

You can use tools like Intuit Assist that offer automation features that tie risk directly to your financial processes. Whether it’s flagging unusual payments or speeding up low-risk approvals, automated accounting saves time and reduces exposure.

Integrated workforce management features

ERM also applies to people, not just processes. Predictive tools can help forecast staffing needs, spot patterns in employee turnover, or flag productivity dips. But your team needs tools to respond in real time.

With integrated workforce features, platforms like QuickBooks allow you to take action—adjust schedules, shift resources, or prepare for hiring needs—based on those predictive models. This makes human capital management easier and keeps your workforce aligned with your business risk strategy.

Use Intuit Enterprise Suite to simplify strategic enterprise risk assessment 

Enterprise risk assessment isn’t just about avoiding problems—it’s about building a stronger, smarter business. When you understand your risks, you make better decisions, protect your assets, and plan with more confidence. It supports everything from daily operations to long-term strategy, helping you stay focused on growing your business.

Intuit Enterprise Suite offers a lot of features that give you the structure and insights you need to make ERM practical. From unified data to automated workflows and AI-powered forecasting, it helps you manage risks while keeping your business moving forward. 

Explore more about our enterprise financial management solution today and build a more resilient future for your business.