HOW TO AVOID THE RISKS OF NON-PAYMENTS AND GUARANTEE THE PROFITABILITY OF THE COMPANY, SELLING IN DOMESTIC MARKET AND ABROAD

In the current economy, selling on credit, especially in certain sectors, is common practice. However, ensuring the collection of all dues is not a straightforward process, indeed very often, obstacles are found that can compromise the success of the project.

We consider the sales process for any product or service just like a project that must be appropriately planned down to the smallest detail based on steps that only professionals in the sector can manage in a methodical way, starting from the acquisition of information on the potential customer or lead, until you get to cover the risks that may occur along the way.

Various factors can jeopardize a commercial transaction, including issues related to the customer or economic causes that are beyond the customer's control.

How can we obtain all the necessary information on the reliability of a possible customer, prevent the risk of bad debts, insure our products to protect them from unexpected events? What if we had experts available to discuss our business plans and concerns? These experts could provide concrete solutions, allowing us to focus on our work without wasting time and resources.

Well, there are solutions and professionals readily available to assist us with concrete answers for any potential situation or adverse occurrence. These resources enable us to sell with confidence, regardless of the challenges we may face.

When a company sells on credit, it is exposed to the risk of delays or non-payments resulting from various causes. In today's business landscape, it is essential to have the ability to share risks with a dependable partner who can accompany the business through the different phases of a new project.
Of course, to understand the current intricate and articulated context, thorough analyses and insights are needed to understand the dynamics that can influence or compromise the economy of a country. These factors consist of geopolitical elements and fluctuations in the economic markets, making them highly complex and challenging to analyze. Coface's experts possess the skills to analyze various situations and the continuous market fluctuations. Their expertise allows them to transform the complex and chaotic multitude of data into organized information, which serves as a solid foundation for planning effective business strategies.

Customer evaluation: how to do it?

At the basis of any credit risk hedging strategy, lies the necessity for high-quality information to effectively evaluate customers.

If we wanted to give a definition to credit risk without falling into technicalities, we could say that credit risk refers to the possibility that one party in a contract may fail to fulfill its financial obligations, leading to a loss for the creditor.

To manage risk, we rely heavily on data from reliable sources. Once obtained, it is necessary to have the ability to analyze and transform this data into meaningful information that ensures comprehensive coverage of our credits, so that we can expand the business and facilitate future developments. Coface provides innovative solutions to support global trade, catering to various needs and requirements.

What elements can be considered in credit insurance?

In summary, credit insurance safeguards businesses from adverse impacts caused by unexpected customer bankruptcies. The credit insurance contract (policy) serves as an outsourced credit management tool, with the insurance company acting as a supportive partner in guiding and enhancing sales.
For example, Coface issues policies that include a preliminary analysis of the reliability of the insured company's customers, i.e. assessing their ability to meet credit commitments, and the assignment of a credit limit, within which the policy coverage intervenes. Credit limits are updated (via CofaNet) on the initiative of customers and/or Coface, with regular monitoring, in line with the debtor's financial capacities.
In the event that the insured company declares a non-payment, Coface immediately initiates the necessary procedures to recover the outstanding amount, providing compensation in the event of the buyer's insolvency. Coface's TradeLiner policy is an integrated solution that protects companies from non-payment of customers, guaranteeing a very wide range of services ranging from non-payment prevention to debt collection and compensation. To speed up the exchange of information and tailor coverage to meet each customer's specific needs, Coface implements continuous customer relationship systems, including online platforms. The EasyLiner policy, dedicated to SMEs, can be easily activated online and allows you to cover sales abroad or in Italy in a simple, effective and concrete way.

CofaNet Essentials

CofaNet Essentials is the online management system for Coface policies, designed to allow businesses freedom and flexibility in monitoring and evaluating their customer portfolio, enabling them to access valuable information assets from numerous companies worldwide. Thanks to CofaNet Essentials it is possible to:

• Query companies/customers anywhere in the world.
• Request credit limits and commercial information.
• Create a personalized data list for customer analysis.
• Monitor the portfolio of credit limits 24/7 through a sophisticated notification and messaging system.

How company profitability is guaranteed

Cash flow or liquidity stands as the most crucial financial aspect for any company. In fact, it is often the lack of liquidity becomes the very factor that jeopardizes a company's survival, leading to crises or even bankruptcy.
The entire economic system places a priority on financial stability and relies on companies that can effectively address threats and unexpected events. To tackle credit loss risk situations, it is essential to have the appropriate skills and tools.
At the basis of the protection strategy we always place the possibility of accessing relevant, validated and complete data to evaluate the right suppliers and customers while continuously monitoring and obtaining updated insights into the evolution of their risk profiles.

Selling on credit: how to manage risks

Deferred sales risk is influenced by both the economic cycle and debtor-related events. Typically, during periods of economic expansion, it decreases, but it tends to increase during times of recession. As the context evolves, the tools to safeguard against various risks must also evolve. To cater to specific needs, Coface offers a wide range of options and services to tailor the most appropriate credit insurance solution for your company.

TradeLiner: A global solution 
An insurance coverage against customer insolvency or payment arrears for sales on credit:

• A personalized credit line for each buyer.
• Autonomy to negotiate coverage terms.
• Flexibility in determining payment conditions for buyers.
• Compensation up to 90% of the loss.
• Bad debt collection services.
• A simple pricing structure with a rate that includes all covered risks.
• An online tool, CofaNet Essentials, available to manage your portfolio of buyers and their coverage.

The positive effects of a good credit insurance strategy

Insuring credits is the final result of a complex process involving contextual analysis and meticulous company planning and can only be carried out by specialized companies.
Having Coface as your risk management partner means:

·         Relying on a solid partner with an AA- rating from Fitch and an A2 rating from Moody's

·         Have a unique international network with presence in 100 countries, ensuring close service proximity to all companies

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Receive the support of dedicated teams offering personalized services tailored to every need

·          

Access tailor-made, flexible solutions specifically designed for companies of all sizes and sectors

·          

Draw on a large database of company information, updated daily by 53 information centers around the world

·          

Benefit from the risk quality analysis by hundreds of analysts and experts in 46 countries, who possess in-depth knowledge of local realities and strong sector specializations, ensuring comprehensive assessments

·          

Benefits from an effective debt collection service with specialized staff and a large network of international partners operating in 200 countries

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Access CofaNet Essentials, a complete secure and easy-to-use online management system to help the company manage the credit insurance policy

·          

Have cutting-edge digital innovations tailored to customers: CofaMove, the smartphone app to manage risks at any time and anywhere, and CofaServe, to connect the customer's credit management tools to those of Coface.

COFACE FOR TRADE

With 75 years of experience and an extensive international network, Coface is a leader in trade credit insurance and adjacent specialty services, including Factoring, Debt Collection, Single Risk insurance, Bonding and Information services. Coface’s experts work to the beat of the global economy, helping ~50,000 clients in 100 countries build successful, growing, and dynamic businesses across the world. Coface helps companies in their credit decisions. The Group's services and solutions strengthen their ability to sell by protecting them against the risks of non-payment in their domestic and export markets.

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For any additional information, please refer to the following link: https://www.coface.co.il/Home/General-informations/Data-protection