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Credit Management
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What is credit management?
It is a complex process of management and strategy of working with buyers and receivables – a process of deciding to which buyers, and in what amount, the company will deliver, issue invoices, monitor due dates, send payment reminders, collect debts, etc.
For our client, a very important advantage of credit insurance is the transfer of credit management to the insurance company (KUPEG). It is a service that is beneficial for small and medium-sized companies, but is also appreciated by large companies. Our insurance company offers its clients their own system of credit management in which they have the right to decide on the acceptance of a particular credit risk up to a pre-defined amount.
As part of credit management, KUPEG helps its clients in:
BUSINESS STRATEGY MANAGEMENT:
Limits defined by the insurance company can be integrated into the credit management process as:
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A maximum recommended volume of open receivables to be paid by a particular buyer (based on a comprehensive analysis of the buyer’s creditworthiness)
- A decision of which buyers, and in what amount, the Company will deliver – KUPEG assesses the financial strength and payment capabilities of individual buyers (a special department exists within KUPEG for this purpose – the largest department in the Company – and it deals with the financial and credit analysis of each buyer for which clients have requested a credit limit) and then defines a credit limit for each of the client’s buyers – this limit is not only the highest amount up to which KUPEG is prepared to cover the non-payment risk, but it is also a recommendation for the client – as this buyer has been identified by a professional analysis to be of a determined strength and we give a recommendation for the following maximum volume of open receivables.
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A timely warning of problems – the insurance company performs continuous monitoring of the buyer’s financial and payment situation
- For the monitoring of chosen factors (monitoring of bankruptcies, bankruptcy petitions and payment history), we use external databases, whose data are automatically compared to our data and automatically evaluated.
KUPEG offers clients who have their own system of credit management, that up to a pre-defined amount, they will have the right, as the insurer, to decide upon the acceptance of a particular credit risk.
FINANCIAL STRATEGY MANAGEMENT:
- Insurance can be used as security for a financing institution that provides a loan for the funding of receivables.
- Financing institutions are offered a guarantee, which would otherwise require a client’s assets as collateral.
- Generally, all factoring or forfaiting banks and financial institutions accept credit insurance as a guarantee for a loan.
PREVENTION OF FINANCIAL LOSSES:
Risks covered by KUPEG insurance:
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The basic characteristics of all our products are, within individual contractual terms and conditions, comprehensive coverage of non-payment by a buyer – debtor, both due to
- Commercial risks – insolvency, protracted default (the buyer does not want or cannot pay), and also due to
- Political (territorial) risks – a political event or macroeconomic problem of a country, a circumstance beyond the control of the particular buyer.
DEBT COLLECTION:
- With claims handling and debt collection, KUPEG effectively and professionally assists clients in the process of judicial and out-of-court recovery of unpaid receivables.
