Trade credit insurance offers so many positive things that many business owners simply can't do themselves and it does a far better job than any experienced credit department could ever expect to perform on its own.
The security that trade credit insurance coverage provides, allows a business owner to increase sales with existing clients without increasing its vulnerability. For exporters, this can provide a significant competitive advantage.
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Some reasons as to why a company will invest in trade credit insurance include:
-Sales growth – if receivables are insured, a company may safely sell more to existing clients or go after new customers that may have been considered too insecure without insurance.
-Expansion into new international markets.
-Better funding terms – in many instances, a bank will give more against guaranteed receivables; this could also provide cost advantages.
While protecting cash flow, and earnings will be exactly what most firms recognize as the main reasons to buy trade credit, another reason to invest in procuring their account receivable is that it helps them boost their sales and earnings.
By maintaining a strong connection between the insurer and the credit management department, trade credit insurance is your wisest investment that a business can make to ensure its profits, cash flow, and funds are guarded.