Cover for Bad Debt Losses - Euler Hermes Kreditversicherungs-AG

You should always
know how well your
customer is doing When customers suddenly fail to pay on time
or at all, the company which suffers the loss
could often have seen it coming a long time
before – if they had paid attention to the warning
signals. Because there are many indicators
which reveal in advance that a business
partner is moving towards insolvency. Stringent
credit management – meaning the com -
bination of internal analysis of weak points,
information on customers’ financial strength
and intensive customer contact – can recognize
these signals. And that makes it an
effective instrument for warding off possible
negative knock-on effects for your company.
6
Be well-informed from the very start
You should always check a customer’s financial
strength even before beginning a business
relationship, so that you do not find yourself
in the situation of having to limit the damage
after the goods have been delivered. The results
of such a check can often be surprising – the
big names are often not in such good shape
as you might expect, for instance. This type of
credit assessment check can be obtained easily
and quickly by making a credit limit request
to Euler Hermes Deutschland AG (shortened
to Euler Hermes in the rest of the brochure).
Or alternatively you can order a credit report
from one of the classical business information
agencies such as Bürgel. And finally, it is
often best to talk directly to the customer:
what is his view of his current business
situation, who are his competitors?
Stay on the ball
It is just as vital to keep an eye on the business
relationships you already have, since the
economic situation of a company can change
very quickly. With regular credit assessment
checks you can find out why invoices are still
unpaid in specific cases: is a good customer
perhaps temporarily strapped for cash? Then
you can offer to defer payment or let him pay
in instalments. Or is he perhaps an unscrupu -
lous debtor merely playing for time? If the in -
solvency administrator is knocking on your
customer’s door, it is high time to act, however.