Optimization of working capital
A credit insurance programme reduces the burden for the treasurer. It makes credit analysis and debt collection easier, not to mention relieving the company of lengthy insolvency procedures. Despite an implemented credit insurance programme, each company should pay special attention to an important issue within its credit policy – the payment terms it offers its buyers. The length of payment deferral periods significantly impacts a company’s financing needs and also its bottom-line. The working capital position of a business is determined as a combination of the level of sales, payment terms approved to buyers, payment terms accepted from suppliers, and the company’s profitability. Payments terms often reflect the ability to generate additional sales. Lower trade credit is usually followed by moderate levels of sales. On the other hand, greater trade credit leads to higher sales levels, but also higher amounts of required supply chain finance.
We are specialists in reshaping working capital needs to the benefit of our clients. We bring savings by implementing flexible and cost-effective solutions to working capital through the implementation of various trade finance solutions (from factoring, with or without recourse; invoice discounting; etc.), and by taking into account our client’s power to negotiate. We can generate additional liquidity or simply create funds to target profitable trade-finance related opportunities.
Despite the fact that we are promoters of credit insurance programmes, our ultimate aim is to motivate our clients’ organisations to embrace a smart risk culture whereby all employees are made aware of credit risk issues and adapt their attitudes and behaviours to make better decisions, and to be able to efficiently deal with the trade-off between commercial requirements and risk taking.