Five advantages of commercial credit insurance to boost your sales

by Lisa Baker

Often times, commercial credit insurance is perceived by companies as a protection tool against the possible default of their clients. However, the features and services included in this insurance go far beyond compensation in the event of non-payment. In fact, it is one of the best resources to boost the sales of your commercial team.

Business prospecting with financial analysis

The first great challenge that the commercial team of your company must face is the commercial prospecting process. Finding potential customers is not a mere exercise in identifying those companies that may be interested in the products offered by your business.

It is imperative to have verified information about your financial situation to support a business proposition that often involves selling on credit. This is even more critical in the context of economic crisis, in which the solvency of clients can be affected, and generate an increase in defaults.

Thanks to Credit insurance, your commercial team will have detailed and permanently updated credit reports of those companies that may constitute a real and safe commercial opportunity. In addition, there are specific information and risk assessment services that allow you to have the necessary information to make your business decisions.

Improvement of commercial offers

Once the prospects have been identified, it is time to make the business proposal. Again, your sales team is faced with a dilemma. If you do not have reliable information about the potential client, your proposal will be based on good faith and the information that you have been able to gather during the negotiation process. The volume of the order, the unit price, the discount for rebate, the credit granted and the payment terms are subject to this information.

Obviously, if your team operates blindly, it will be forced to take a conservative approach to minimize risks. However, the data provided by the credit reports of your Commercial Credit insurance represents a radical change in the negotiation capacity. Your sales managers will be able to make much more personalized proposals, which are adjusted to the real payment capacity of the clients.

Expansion of credit granted to customers

In line with what was mentioned in the previous section, emphasis should be placed on the commercial credit granted to your clients. Not only is this common practice, it is often the only way for customers to approve purchases.

However, the scope and conditions of this credit have a great influence on the final volume of sales achieved. Again, thanks to the financial information provided by your commercial credit insurance, it is foreseeable that your financial department can authorize more and higher volume loans, without increasing the risk of non-performing loans.

Better alignment of your commercial and financial teams

One of the biggest sources of confrontation between the commercial and financial teams of a company is the cancellation of contracts, due to the denial of credit requested by customers.

Understandably, your sales team does everything possible to close sales; while your financial team must protect the income statement against possible defaults. Now, if both teams have a common frame of reference, their alignment and approval ratio will be much higher.

The credit reports of your credit insurance are that frame of reference, which will allow your sales managers to close contracts that have the approval of the finance department.

Acceleration of exports

Finally, it is appropriate to point out that foreign trade operations involve greater difficulty in the process of prospecting and negotiating contracts. Not surprisingly, access to reliable information is limited by the obvious barriers to operating in another country.

Your credit insurance allows you to overcome this obstacle, thanks to the knowledge and access that your insurer has in international markets.

You can leverage on their experience, to grow your exports more quickly, both in terms of the number of clients, and in terms of the total volume of sales.

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