The credit insurance is an important part within the sector of retail non-food. Read more on why this is, on this page.
The sector retail non-food delivers consumer goods directly to the consumer. The sector consists of a diverse activities and goods, like clothing, electronics, education, free time, personal care and products of home interior. The rise and advancement of e-commerce has been a threat for the retail non food. The advancement has carried through unabated, which causes offline shopping to decrease in popularity. Despite this threat, the sector non-food offers opportunities and has seen an increase in turnover in the past few years. However, with threats this big, and multiple bankruptcies in the sector, it is important to have your debtor management straightened out to prevent financial surprises. A credit insurance retail non food is the instrument to prevent these surprises.
A credit insurance is an insurance that makes sure outstanding invoices are paid if debtor are not able to do this due to insolvency. What happens if a debtor is declared bankrupt? The generated turnover for this specific debtor is then written-off as a debtor loss. By taking out a credit insurance, you are assured outstanding invoices will be paid. Next to the certainty of payment in case of default, a credit insurance retail non-food offers many more advantages.
When taking out a credit insurance you can incorporate two important parts. The creditworthiness check is part of the credit insurance. The creditworthiness check is a check from the credit insurer of your current and new debtors. The debtors are checked for their creditworthiness. With this up-to-date information, you can adjust the payment terms to be either more flexible or more strict, to achieve a competitive advantage. The credit insurers have disposal over an enormous database with up-to-date information on different sectors, markets and millions of companies. When taking out a credit insurance retail non food, you are able to utilize this up-to-date information.
The debt collection system is the last part within the credit insurance. The collection system can be covered entirely by the premium, provided this is taken out. The collection system ensures the payment of outstanding invoices. Moreover, the collection aids in the early payment of outstanding invoices. This improves the cashflow.
The costs of a credit insurance are often less high than expected. The premium of a credit insurance is only 0.075% to 0.35% of the turnover.
The most important reason to take out a credit insurance is the certainty that the generated turnover is indeed achieved. Does your company have a small profit margin? In that case taking out a credit insurance is recommended. A write-off of a big invoice or multiple small ones could cause the financial continuity of your organization to be compromised. Especially with a small profit margin, as this means a lot of turnover has to be achieved to make up for the losses.
Are you active within the sector retail non food, and would you like to know more about the possibilities of a credit insurance? We have over 50 years of experience in credit insurances and can provide you with proper advice because of this. Contact us freely for a personal consultation. In this consultation, we will discuss all options with you.
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