If you send your goods or provide services on credit terms you are exposed, of which can have devastating consequences should the debtor go bust. You have paid for very expensive gifts. What did you do, you insured it from date of order to delivery but never completed the insurance cycle that protects you until final payment is received sound familiar?
A £1m t/o company making a 10% profit that takes a bad debt of £10,000 needs to increase sales by £100,000 just to stand still, for larger companies the amounts increase dramatically as does the impact for all concerned. This will no doubt cause the bank, shareholders, owners, funders to pressure the Directors/Staff, and may reduce funding for something that could of been avoided.
When your filed accounts show a loss what impact will it have? Credit Rating Agencies or the Credit Insurance Companies may change ratings. This will have a negative impact with your suppliers and may result in pressure on you to pay pro-forma, all because of something that could of been avoided.
There's a pattern emerging, protection used correctly equals growth.
Try taking a different approach when it comes to business and protection of assets, its simple really apply insurance to your advantage and use it to create and leverage opportunities.
The world is changing voted out of the EU companies needing to explore other markets and new customers to maintain continuity. The future may be securing collaboration in the UK & foreign market. When it comes to doing business have an insurance backed policy covering sales providing protection in the event of non payment, securing the business you need without fear nor the devastating impact of non-payment owing to debtor insolvency.
When the deal is concluded don't worry about payment or whether you can trust the debtor to pay, the deal is insured against non-payment owing to insolvency of the debtor. This strategy will get support from sales directors as they look forward to a bonus, as stakeholders get dividends they desired.
Your protected, the company balance sheet is, and your company has increased its sales, of which premium costs are offset in the deal and future sales. If it were not for the insurance you probably would not have traded owing to the risk. So specialist insurance gave you the confidence to trade with companies and in markets not normally used by yourself's, because of the commercial credit risks doing business. Now your company has opened up a new world of opportunities and increased its sales.
Debtor insurance is not an additional cost you could do without, but a tool to increase sales and secure the future. Don't turn away new business because of commercial credit risks first see if you can insure it cost effectively!