Unique and up-to-date information
Not only credit reference agencies, but also credit insurers have unique and up-to-date information on companies at home and abroad. By using this, you reduce the chances of unpleasant surprises and unpaid invoices. With an insurer's opinion, you work pretty much the same way as if you were insured. You request limits, the insurer provides a rating and a limit opinion that you can incorporate into your procedures. The amounts run in the monitoring at the insurer's underwriting department. So as soon as there are deteriorations, they notify you.
In short, this includes:
- prevents unpaid invoices;
- limit the risks;
- spend less time on debtor management;
- have continuous insight into the payment behaviour of your (potential) customers;
- sees up to what amount you can safely do business;
- commercial opportunities discovered.
Credit insurers have analysts who work daily to collect, process and analyse global financial data. They use this data to assess their customers' risks.
Know Your Customer (KYC)
The KYC phenomenon does not only play out in banks and insurers, where it is an obligation. Knowing who you are doing business with is an essential part of your customer acceptance. A check at the Chamber of Commerce is often not enough. Questions you want answers to in advance are: what does the corporate structure look like, who is the ultimate beneficial owner (UBO), who are the authorised directors and how do you assess the creditworthiness of your relationship?
The accounting standard IFRS
To determine Expected Credit Losses (ECL) on trade receivables, companies now have to meet certain requirements. For example, they must now have a more accurate and forward-looking method of accounting. This is laid down in IFRS, International Financial Reporting Standards, a standard that defines how you should record your accounts (annual reports).
Take advantage of insurer information
An insurer's processed credit information allows you to identify, measure and predict the risk of loss on your trade receivables. You can also estimate the expected losses and the provision to be taken.
The methodology underlying this service is described transparently. This means that the approval process between your accounts and your accountant will be easier.
More information
Would you like to know more about credit information capabilities and how to improve your current credit risk provisions? Then contact us at info@xolv.nl or 073 - 820 02 95. Our specialists will be happy to talk to you.
