Credit Insurance protects your business in the event that a customer defaults on a payment, goes bankrupt, or a supplier fails to deliver or goes bankrupt. Credit Insurance can be used to monitor your customers’ credit and give you advance notice to help decrease exposure to bad debt.
Credit insurance products provide credit insurance solutions to protect you against the risk of credit default.
It is possible to believe that your business model and the customers you serve are safe. In a normal economy, more than 70% of businesses have bad debts. Up to 40% of the company’s assets can be tied up in debtor books. The impact of the budget and the Corona virus remain largely unknown. It is crucial to take precautions to ensure your business’s safety.
What is credit insurance?
The insurer will pursue the debt for you if you don’t get paid, or the contract is not signed. The insurer will pay your loss if the debt cannot be recovered. Normally, 90% of the loss is covered by the insurer. The insurer will also monitor your credit status and stability and notify you if any business appears vulnerable. This gives you the chance to take action in advance. You can operate more confidently knowing that your credit risk is reduced.
Credit insurance does more than cover bad debts. It also helps to improve internal processes and procedures. This can result in better client relationships. This can help you increase your negotiation skills with other stakeholders (banks, leasing companies, suppliers, and so on). An insured business’ credit rating improves. Credit insurance can be used to transfer the risk that customers will default on their payments due to insolvency, prolonged payments, or other reasons. Credit insurance does more than protect against bad debts.
Credit insurance is a tool that can be used to increase your sales and profits.
Top Credit Insurance Credit Control Tips!
The ability to manage credit is key to a company’s success. If your company doesn’t have enough cash at the right time, it could cause serious cash flow problems.
It is a good idea to conduct a credit report on your customer. You should apply for credit limits if you have a credit card policy. It is important to be as knowledgeable as possible about your customers from the moment you receive an order. If you are concerned about the creditworthiness of the client, you can limit credit terms and impose pro forma invoices. If the client refuses payment, it’s fine. It is fair that you are paid.
Invoicing customers promptly is crucial. It is important to clearly indicate the due date, and double-check that they have received it. This is a great way to bring a new customer aboard. You should send
Your customer a statement on the due date indicating which payment method they should use, BACS or cheque.
No payment on due date?
It is a good idea to send a formal note along with a copy the statement or invoice stating that the account has been past due and must now be paid. Include details about how payment should be made. Contact the accounts department by telephone or email to determine if the problem is serious. Next, escalate the matter by writing a stronger letter with copies of invoices and a statement detailing the amount due.
We’re not getting anywhere
You can transfer your debt to a third party debt recovery company if you haven’t received payment. This has led to a high success rate. Third parties are crucial in helping you win your case
Credit Insurance and Debt Recovery
Standard credit insurance policies state that accounts that are past due must be notified within 45 days of the due date for the first invoice not paid. We recommend that you hire a third party to assist with recovery actions.