Most of us would agree that 2020 has been one of the toughest trading years in living memory. Unfortunately, one of the few things we can be sure of is that this turbulence will continue into the New Year, with two of the darkest storm clouds brooding overhead:

• COVID-19 – the incredible advances made by scientists in developing new vaccines against the coronavirus are cause for optimism. However, it will take time for national vaccination programmes to access all areas and until then, restrictions could be tightened in response to new outbreaks.
• Brexit – Whether or not an 11^th hour deal is reached between the UK and EU, the uncertainty has already had serious economic consequences and experts predict further disruption as businesses adjust to new arrangements.

Such uncertainties make it difficult to trade with any confidence. How can you be sure that your account customers are financially stable? What can you do to ensure you are paid on time? And can you survive the financial shock of a substantial bad debt?

The best way to allay these anxieties and have the confidence to trade is by pro-actively addressing the three essentials of credit risk, with help from Coface:

1. Check

High-quality assessments of commercial credit risk depend on quality information, which means digging deeper than a trade reference or financial statement. It makes sense to use a specialist because few companies have the resources necessary to invest in researching, analysing and monitoring trade risks themselves.

Coface’s vast information network monitors more than 80 million businesses across 200 countries and we employ 400 information analysts worldwide. Information is collected from a wide range of sources, including credit agencies and overdue notifications from policy-holders. We also proactively seek company information such as statements and interim results.

This global footprint and expertise enable Coface to provide detailed and up-to-date assessments of trade risk at a company, sector and country level to help steer you towards profitable customers, sectors and overseas markets.

2. Protect

If the worst happens and a customer fails or defaults, the impact can be devastating which is why some companies make provision for bad debt in their accounts. But while self-insurance can provide a measure of security, there is a risk that the financial cushion will prove insufficient. It is also an inefficient use of capital.

A credit insurance policy is a better option because it allows you to protect your sales ledger and maintain cashflow in the event of a bad debt, while making the best use of capital to invest in areas like product development. Having a policy also demonstrates that your company has limited exposure to financial shocks, making it more attractive to banks and other investors.

Coface is one of the world’s leading credit insurers, providing cover in 200 plus countries. From SMEs to multinationals, more than 50,000 companies trust Coface to protect them against trading risks such as bad debt, late payments and political risks. Working with Coface gives them the flexibility to customise the policy to suit the needs of their business and the assurance that their domestic and overseas claims will be paid within 30 days.

3. Collect

Don’t be passive about collecting payments. Once you have billed a customer for your goods or services, it should not be a case of waiting anxiously for them to meet their obligations. From sending out regular statements and chasing overdue payments, to flagging-up potential disputes and monitoring credit limits, effective credit control is mission critical to any business.

Credit control professionals can easily manage most payment collections but export markets can be more challenging because the language, culture and time zones are different. In these situations – or when a customer is playing hard to get – there is a good case for outsourcing to a specialist service with the resources to investigate debtor assets and secure payment more quickly.

Coface has 38 collections offices around the world and a team of trained, multi-lingual professionals. We have the financial clout to investigate late payers and take legal action where necessary, although thanks to our name recognition, Coface’s involvement is often enough to prompt customers into action.