Trade Credit Insurance: New Economy, New Business Strategy
We are quickly moving into the second half of 2008 with many uncertainties. Company insolvencies are on the rise. Payment default is at an all time high. For businesses trading on open terms, there is no better time than now to protect cash flow from losses due to customer non-payment default.
Accounts receivable are a critical component of any company’s balance sheet. Cash flow, profitability, and loss avoidance are affected by how well credit decisions are managed. For many businesses, accounts receivable are one of the last major assets left uninsured. Make one bad credit decision and a catastrophic loss could have a serious impact to the bottom line. On the other hand, be too credit restrictive and trading partners will take their business elsewhere.
In today’s economy, having accurate financial information, making proper credit decisions, and protecting cash flow against unexpected loss are critical components to maintaining a financially strong business. Each day around the globe, companies are experiencing a staggering number of bankruptcies, slow, and non-payment losses causing unexpected business interruption, and in some cases, outright failure. With a properly structured trade credit insurance policy, a.k.a. accounts receivable insurance, companies trading on open terms can minimize the risk of these types of losses and sell freely to new and existing customers, both domestically and internationally, with little to no risk.
Have a question or comment about trade credit insurance? Feel free to post your inquiry on this blog or contact Jack Trama directly by clicking here.