You are in business to make profit, to drive margin not turnover. There are only three ways in which you can achieve this and Credit Insurance will help you with all of them. Credit Insurance ticks all the What's In It For Me boxes for any B2B company selling on credit terms. It will make you more profitable by helping you sell more making you more efficient and cutting your costs. Bold claims you might think and you would be right but they are claims that can be substantiated so read on.
Credit insurance helps you sell more
Your options for making more sales are to sell more to existing customers or to start selling to new customers. So what's stopping you? Essentially, it boils down to these are they good for the money.
You know what your clients have been good, but what do you know about their ability to handle larger credit lines?
With new customers, you can do your research, meet with them, discuss their plans, check out their financials, take trade references, ship small to minimize the risk. Is that what you went in to business to do, do you have the time or the expertise to make those calls what is the opportunity cost?
You could get Credit Insurance and pass on your credit assessment to people who are experts in that field. If you follow that approach you can trade more expensively, secure in the knowledge that if things do go wrong your credit insurer will put their money where their mouth is and replace 90% of you working capital.
Credit insurance cuts your costs
A client fails leaving you with a bad debt of £ 20,000. You are operating on 10% margins; fanciful though but we are keeping the numbers simple. That £ 20,000 has come straight from your bottom line and you need to make a further £ 200,000 of sales all paid for and all at 10% margins just to cover your position. If you are credit insured your loss would be a mere £ 2,000 leaving you requiring just £ 20,000 of sales to recoup your losses.
The sales can only from two sources new and existing clients. Research tells us that it takes ten times more effort to find a new customer as it does to keep an existing client. When you have a bad debt not only does that hit your bottom line but you have to replace that customer as well.
Credit insurance makes you more efficient
Ask yourself what you went into business to do and are doing what you are good at and what you enjoy doing. Are you wasting your time on things like risk assessment, debt collection, chasing after new accounts to replace those that have failed.
If you buy Credit Insurance you are buying a service that:
1. Assesses the credit worthiness of your customers
2. Provide a credit management framework
3. Collects out if your customer does not pay
4. Settles your loss if the collection process fails to get results
5. Provide access to cheaper finance
6. Keeps you up to date with economic developments in the countries and sectors you are trading with
7. Provide a powerful marketing tool that enables you to check out a prospects credit worthiness before you make first contact
If you are in business and you are giving credit you should be talking to Credit Insurance Plus.
We understand that if you do not give your client's credit someone else will and the sale you wanted will be lost. With lenders referant to extend funds, businesses regard credit from their suppliers as a right bordering on a quasi-overdraft.
What's more having demanded and received longer terms from you they add insult to injury by dragging their heels and delaying payment beyond due date. Not only are you giving your customers unsecured interest free loans on goods delivered to them you are fast becoming their lender of choice. That is an uncomfortable position to occupy. Research tells us that typically 40% of a company's current assets are made up of accounts receivable. The odds against a customer failing and leaving you with unpaid invoices are much shorter than those against your promises catching fire. That risk is frequently unprotected, yet Credit Insurance is readily available and very affordable. So contact us today, after all you have nothing to lose except your company.