5 tips for a safe export
Are you concerned about a buyer being unable to pay? These 5 tips will enable you to reduce that risk and export with confidence.
Tip 1 – Trust is good, but control is better.
Even long-term customers can default on payments. Be strict about your receivables management, even when it comes to loyal customers.
Tip 2 – Prevent fraud.
It is almost impossible to protect completely against fraudsters. However, you can take the necessary precautions. Make sure that you have the originals of documents. Always check that the sender is correct for every order – that applies to all countries included in the policy. Unfortunately orders made by fax and copies of invoices and proof of delivery do not provide sufficient protection. Always keep all the possible risks in mind – your credit insurer can assist you in that.
Tip 3 – Calculate the risk.
Often it is underestimated how much additional turnover needs to be generated to make up for low losses of receivables.
Imagine that you have delivered your goods or services and the outstanding invoice amount is EUR 65,000. With a profit margin of ten percent, you would have to generate an additional EUR 650,000 in turnover to compensate for the loss if the buyer defaults on the payment.
For payments on credit, always ask yourself whether you can manage without that money at the given time.
Tip 4 – Global monitoring.
Keep track of every buyer.
Your credit insurer has the necessary international network and monitors the relevant risks for you, leaving you free to focus on your core business.
Tip 5 – Be firm.
What should you do if a buyer has failed to pay? Raise the matter with the buyer, either by email or telephone, and immediately halt all further deliveries. Be firm and take a strict approach to your receivables management.
The only things that can really damage your relationship with the buyer are past-due receivables or bad debt. Credit insurance comes in useful there too.
Often it is actually easier for you if you can refer to strict credit insurance terms.
Do you have any questions? Please do not hesitate to call us on +43 (0)5 01 02-0 or write to us at firstname.lastname@example.org.
18 April 2016