The best offense is a good defense
The dynamic between a company’s sales force and its credit department often resembles that of rival teams, with one blocking the progress of the other. But, ideally, they should operate like the offense and defense of the same side: one fending off the biggest obstacles on the field, to let the other gain enough ground to score. The team wins when a profitable new customer relationship has been established.
Even in uncertain economic times, one of the keys to driving sales is forging new customer relationships. But it has to be done in a safe and calculated way, based on thorough credit assessment that goes beyond a handful of trade references and a scant credit report. However, companies often lack access to enough information to support their credit decisions, especially when put to the scrutiny of an aggressive salesforce.
Risk underwriters mitigate risk for their customers. But, more importantly, they should help them understand the risk so they can safely expand their business.
Keep your eyes on the ball
The core of trade credit insurance is enabling companies’ credit teams to support business growth alongside the sales force. When an insurer covers a sale, the customer can use credit as a differentiator and be more aggressive, for example by offering longer payment terms or a higher credit limit.
The more extensive the insurer’s database, the better their access to invaluable customer information, based on data from a worldwide network of analysts and clients. These analysts have local expertise, and customers that give information about their payment experience with their clients. This confidential financial information about companies gives much deeper insight into their strengths or weaknesses. It helps spot high-risk companies before it’s too late, and can help explain why a particular sale can’t be insured. Comprehensive financial insights also facilitate dialogue between credit and sales teams so they can jointly decide whether or not it’s worth selling on terms.
