Avoid the Hassles in Bad Credit Collection with Accounts Receivable Insurance

Avoid the Hassles in Bad Credit Collection with Accounts Receivable Insurance

Almost every business establishment encounters different kinds of problems particularly those that are related to customer dealings. Problems that cause a need for accounts receivable insurance to arise are almost inevitable even to businesses that are considered profitable. In fact, those profitable companies are the ones who are susceptible to collection problems or bankrupt receivables due to their several sales on credit and complicated filing system which causes supporting documents to be lost. However, these kind of problems are not limited to profitable companies because as long as a business get sales on a credit basis, they will likely encounter receivables that will be difficult to collect.

Accounts receivables that are difficult to collect or worse, results to bad debts are definitely a burden to a company. It takes a lot of effort and stress to try to get something out of a customer who is having difficulties in paying. This may result to wasted time and resources in regularly writing, calling and emailing the customer to constantly give him reminders about his long overdue debt. Also, the stress from having to exert more strict measures does not do any good to your relationship with your customers. For these reasons, accounts receivable insurance is indeed beneficial to a company.

Having an accounts receivable insurance will indeed be help to a company in avoiding the risks mentioned above. Although this proves to be a solution to your bad debts, you can still take some measures to collect from overdue receivables and avoid resorting to hiring collection agencies or selling your bankrupt receivables.

  • Begin your collection measure even before a sale is made. Do a credit check with a potential customer before allowing credit in sales. Some brokers like Trade Risk Group are experienced in conducting credit check on a local and even international customer. Information such as credit information, company profile, financial statements, market research, among others, are important in determining a customer’s capability to pay.
  • As soon as credit reaches the due date without being settled, send the customer statement of accounts and emails as constant reminder. Making reminders through phone calls is also advisable since you are able to get talk to the company and hear their side as to the reason for the delay in payments.
  • In the event of difficulty in collection, adjust your payment terms to a more lenient one to assist the customer in his efforts of making payments. You may extend the deadline of payment, or reduce the minimum monthly payments. You can also offer a one-time payment which is less than the remaining balance. Coordinate with your customer and ask him for a payment scheme that will be convenient for him.

It is indeed important to follow these steps to avoid incurring bad debts. But to address the company’s need for customer credit check, selling bankrupt receivables and credit collection, they can go to reputable brokers who can provide solutions to credit problems. One broker that you can rely on is Trade Risk Group. Check out their website for the list of services and see how this company can be of service to you.

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