Credit Insurance – An Advantage to Businesses

In today’s competitive world, businesses are taking all possible measures to sustain and grow their markets. They undertake several risks involving selling their products and services on credit to domestic as well as overseas clients. The potential threat in doing so is non-payment and delayed payments, which affects their account receivables. According to an article published by Industry Week, "Accounts receivable (A/R) can represent up to 40% of a company’s assets, and in today’s challenging environment, non-payment of any portion of this can become a serious financial and operational threat to an enterprise" (Industry Week, Duemler, 2013). Thus, it is important to get kreditstyring for safe and secured business.

Whether the reasons behind payment defaults are economic, political or technical inabilities, companies should wisely consider investing in credit insurance policies to reduce their losses. The credit management companies offer cover for the unpaid invoices and thus compensate for the incurred losses. Businesses get instant working capital, which prevents their operations from risks and help them to run without stress.

Another advantage of credit insurance is the chance to explore newer markets and geographies without the fear of losses. Companies, with the confidence of riskavtäckning can plan to expand their business and clientele in newer and lesser known markets. An article achieved by Credit Insurance News from Gulf Business says, "credit insurance is a vital business development tool through which companies take advantage of a comprehensive solution covering the three core elements of their trade cycle: information, protection and collection" (Credit Insurance News, How relevant is credit insurance).

Thus, it adds to the advantages of considering insurance solutions as the industry experts help businesses to take informed decisions on the basis of thorough credit check that they conduct on their customers’ region of trading. The companies can plan to deal with safer clients and markets, reducing the weight of risk. It can considerably reduce the number of bankruptcies and insolvencies observed by businesses. The kreditstyring and transferred risk to the insurer, helps businesses in focussing on their expansions and growth.

Another crucial part of credit management is debt collection. A great amount of energy and time gets consumed in following up with clients for payments. But, with insured trades, the burden of collections is transferred to the insurance company. With legal expertise, credit management companies conduct collections without hampering the business relationships between the business and their clients.

There are many credit management companies that offer their solutions to safeguard businesses. One of the companies that has an extensive experience in the industry is Coface. The company has a global presence and offers reliable kreditförsäkring lösning for businesses across industries. Coface also offers tailored solutions to suit the requirements of different types of businesses.

The success of a business is often determined by careful management of cash. Yet, maintaining a healthy cash flow is a challenging part of any business regardless of the industry.