7 credit management tips for export success

In business risk and reward are two sides of the same coin, and that’s especially true when exporting. But while you can’t avoid all risk, you can minimise it and be prepared for it.

At Coface we have been helping companies to manage their trading risks for over 70 years, and we can provide cover in more than 200 countries. All that experience and expertise is at your fingertips as soon as you become a Coface credit insurance policyholder. As a taster, here are our seven essential tips for managing your credit risk when exporting.

Export
    1. Dig deeper than websites and directories
      At very least you require the full name, home address and business address of the company director you are dealing with. Always be aware that unscrupulous people can create the illusion of a reputable business very easily. Find out if the country has official registration of businesses, the equivalent of UK Companies House, and use it if possible.

 

    1. Don’t believe references
      The chances of ever being provided with a negative trade or bank reference are vanishingly small. If anyone has had a bad experience dealing with the company in question, this is not how you’ll find out about it.

 

    1. Ask the awkward question
      Be thorough in every possible way. Insist on seeing the latest company accounts. Ask for evidence that the company is trading profitably and not in debt. There will only be a problem if they’ve got something to hide.

 

    1. Don’t necessarily worry if the company is using a factor
      More and more firms use a factor or invoice discounter to secure their finance nowadays, so it isn’t necessarily a bad sign.

 

    1. Trust evidence, not instinct
      Even when your gut feeling is that a new customer is trustworthy, only be satisfied by hard evidence. That’s why the authoritative and up-to-date credit reports Coface can provide on 80 million companies worldwide are such a key resource.

 

    1. Don’t hesitate to ask for upfront payment
      The time to decide about providing a company with credit terms or a credit limit is after they have paid on time, not before.

 

  1. An increased credit limit is a reward, not a right
    You need more proof of creditworthiness than just one or two prompt payments before extending a customer’s credit limit.

The clear conclusion for exporters is that the key to successful credit management is accurate and up to date information. The more you know about your trading partners, the lower the risk of dealing with them. As a Coface Credit Insurance customer you have free and immediate access to our unrivalled market intelligence – company credit reports, sector reports, country reports, political risk assessments, economic evaluations…. constantly updated and always authoritative. You know more, so you can grow more.

Sign up for the latest news

Blog

It’s never been more important to really know your customers

As the lockdown restrictions ease, the Government has given more businesses the green light to start operating again, provided they can observe the necessary social distancing and infection control measures.

View Blog
Blog

Five risks of emerging from lockdown

Compounding the tragic loss of life and the impact on our physical and mental health, the coronavirus has exacted a painful toll on livelihoods and the economy.

View Blog
Blog

The Government Guarantee for Trade Credit Insurance 13 May 2020

Many may have seen the welcomed announcement by the Government on their intended support to the UK Credit Insurance Industry. We are actively participating with the ABI and government representatives but it is difficult to

View Blog