Being informed is key to successful trading – How Trade Credit can help

Given the level of uncertainty across the globe, both politically and economically and the lack of clarity around Brexit, weaker outlook for business investment and headwinds from the global economy has resulted in a downgrade of the short-term outlook for the UK economy. The trade credit industry is experiencing an increased level of interest in its insurance as well as a requirement for more bespoke, specialist solutions.

Business owners and managers are taking steps to protect their company against challenges such as cash-flow problems. We often think of resilience as the ability to bounce back from disaster but that doesn’t cover the whole story. Resilience is also about being prepared and guarding against future challenges.

Insolvencies are, once again, becoming an all too common occurrence. The insolvency rate for the U.K. is expected to rise by 9 percent from last year. Brexit-related uncertainty is clearly beginning to bite, as reflected by four consecutive quarters of contractions in business investment in 2018.

With uncertainty clouding the horizon, the challenge is to effectively future-proof the credit strategy for your business and manage risks that seem so impossible to predict.

The key is “information”

Knowledge is the bedrock of sound trade and never before has this been more pertinent. In the current climate, you cannot rely on old information. Constant monitoring, analysis and live updates can be the difference between making a successful credit decision or one that is destined for failure.

It’s not enough to credit check a potential new customer; you need the inside track on their financial affairs, trading strategy, payment behaviour and even an insight on their approach to risk management and whether there is a contingency plan should they hit troubled waters. In today’s trading environment, businesses are hungry for this level of detail but often don’t have the resource required to continually review and update what has become the essential inside track.

Why Credit Insurance?

Credit insurance affords all that. Access to the right information alongside cutting-edge tools, real-time insights, unrivalled expertise and decades of experience enabling customers to make the right business decisions and grow with confidence.

The primary role is to pay claims should a customer fall victim to non-payment. The relief of a claims payment can prevent the contagion from an insolvency spreading along the supply chain and keep a business alive. To that degree, trade credit insurance has always been a solid backstop; at least you know that should your customer fail, your cash-flow will be protected. However, there can be more headaches from a failing customer than non-payment.

With the right resource, business intelligence and expertise, the best trade credit insurance providers can steer you away from risk, help you identify opportunities as well as mitigate against the potential risks you may face.

Trade Credit Insurance is so much more than an insurance to stick in the filing cabinet for a rainy day and should not be seen as a ‘nice to have’ – it is an essential business tool that adds value from day one and allows any business to grow with confidence, offering existing customers credit for the first time or extending the existing credit account, but also with new customers and potentially new markets.

Should you have any questions or enquiries please do not hesitate to contact us on 01952 812380 or email enquiries@fivewaysinsurance.co.uk.