Some of the factors you may wish to consider when deciding if trade credit insurance is right for you:
Risk is an inherent part of credit based trade. Sometimes, it doesn’t matter how well you know your market and customers – insolvency and payment default are commercial realities. Despite sometimes knowing your buyers for many years, you can’t predict the future of their business. Almost every business has had a direct experience with a bad debt, and this impacts cashflow, profitability and confidence
The payments owed to you are often a large chunk of your assets. Your accounts receivable function is one of the largest assets on your balance sheet. Just as you insure other valuable assets such as your factory or your office property, you may want to consider the exposure that your outstanding payments pose to your balance sheet. Trade credit insurance can insure you against this risk.
Also, chasing non-payments can take up significant business resources. Credit insurance can allow you to maintain sales and reduce negative impacts of non-payment. This often frees up the time and resources otherwise spent chasing payments, to focus on growing your business.