Credit insurance transport: why should you take it?
Transport companies are busier than ever. The transport industry is growing and many companies export within as well as outside of Europe. The margins within the transport industry are small and, with a growth increase, investments are necessary to be able to go along with this growth.
How well do you know your debtors over seas? What does it mean for the continuity of your organization when debtors are not able to pay the outstanding invoices? A credit insurances offering coverage is an important part of the transport industry.
A credit insurance is an important part of the debtor management. Therefore, it is called debtor insurance as well. In almost every industry, taking out a credit insurance is indispensable. A credit insurance offers companies that supply on credit, the certainty that the turnover will be made. The credit insurer will pay for the outstanding invoices when debtors are not able to pay. The payment is fully conform the policy terms.
A credit insurance offers many more advantages over the coverage against non-payment. The CreditInsurers know from experience that organizations, who have taken out a credit insurance, have a better grasp on their debtor balance and the debt collection of the outstanding invoices is realized faster.
Moreover, you can utilize the creditworthiness check of the insurer, if this is part of the policy. Through the creditworthiness check, your current and new debtors are checked for their creditworthiness. This enables you to achieve competitive advantage, as you can make the payment agreement more flexible. Moreover, investors will be more likely to invest in your organization as you can hedge risks of non-payment. This will result in a competitive advantage for your company as well.
In an industry in which margins are small, and export is active, taking out a credit insurance is recommendable. Your organization can become compromised if debtors are not able to pay their outstanding invoices. With a small profit margin, you will have to achieve a lot of revenue to make up for the debtor losses. With a credit insurance, the payment term will be shorter as well. Outstanding invoices will be paid through the collection system, if this is part of the policy. The cashflow of your organization remains optimized.
The costs of a credit insurance differs per kind of credit insurance. You can take out a credit insurance as turnover policy, transaction policy, debtor policy or export policy. Do you want to know which kind of insurance fits your organization best? Contact us; we will tell you more in a completely free personal consultation about a proper credit insurance in transport for your organization.