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What is credit insurance?

Credit insurance not only provides protection against bad debt and its collection, it pro-actively helps you to
succeed by providing you with valuable financial intelligence on both your new and existing customers.
What is credit insurance

Having accurate and reliable customer financial information reduces bad debt and the time you spend dealing with it - it gives you the detail and time to better target new customers.

In turn, this allows you to stabilise your cash flow, protect your balance sheet against bad debts, expand sales, boost your borrowing power and confidently develop new markets.

Credit insurance is one of the few insurances that works not just for tomorrow; it helps you to grow and protect your business today.

SME Late Payments
The total sums owed to Britain’s small and medium-sized enterprises have reached a record high of 35.3 billion, according to research. BACs Payment Schemes, the organisation that runs the clearing and settlement of automated payments including direct debits, said that the total outstanding to SMEs had risen by 2 billion during the past six months.
 
Company Insolvencies
The Insolvency Service said the number of businesses going into liquidation rose to 4,303 in the first quarter of 2012 http://www.insolvencydirect.bis.gov.uk/otherinformation/statistics/201205/index.htm , a 4.3% increase compared to the same period last year and a rise of 0.2% on the previous three months.
 
Consequences
The consequences of late payment are well documented, with the annual survey additionally finding that businesses had to wait an average of 17 days beyond their agreed credit terms to be paid in that period. A result of this is that 32% of businesses now classify more than 10% of their debtor book as bad debt.
Unfortunately, late payment has also had a knock on effect down the supply chain. Well over half of businesses admitted to paying their suppliers later (59%) as a result of their customer paying an invoice late. Call us today to find out how we can help your company.

For further information on how credit insurance can help you, call Peter Hill Credit & Financial Risks Ltd now on 01604 604 444

Self-assessment questions:

• Would you gain more customers by offering longer payment terms and higher credit limits?
• How do you check a new customer’s credit worthiness?
• Do you know what’s happening to your customers’ businesses?
• Who will buy your goods if your customer goes bust?
• Have you ever had a problem getting people to pay on time?
• Do you have any customers who account for more than 5% of your turnover?
• What impact would delayed or missed payment have on your cash flow and your business?
• How would your bank react to this?
• Would it help if you could ensure payment is made?
• Would you like to be able to speed up payments?
• Would it help if you had someone to assist you to systematically chase up late payers?
• Do you want to secure your cash flow?
• Would you like to do more business?

Credit insurance - How it helps you grow your business:

Assess the buyer - identify good or bad customers
This allows you to focus your sales efforts on customers that can pay.
Debt collection - reduced or removed
For most SMEs, the credit controller wears many hats. Preventative credit checking and the collection services provided by insurers reduce this burden.
Cover - protect cash flow and balance sheet
Smaller companies with low reserves rely on cash flow to survive and late payments cause them problems. Larger companies with bigger reserves, or those looking to sell the business, may be more concerned with protecting their balance sheet. Credit insurance does both.
Collateral - improve borrowing
A secured asset is more valuable than an unsecured one. Covering against the risk of bad debt makes the business more attractive to banks and financiers.

Need a credit insurance broking specialist?
Peter Hill Credit & Financial Risks Ltd is one of the UK's leading Credit Insurance broking specialists.
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