Practically all commercial transactions between companies (including those involving sole proprietors or self-employed professionals) are carried out through credit sales. In other words, through transactions in which the buyer acquires the goods or services they need, committing to pay the invoice at a future date.
This practice is effective in facilitating and encouraging sales. However, it is clear that it carries uncertainty regarding invoice collection, which is why it is vitally important to properly manage this situation so that it does not affect the smooth operation of the business or jeopardize its survival.
Corporate delinquency is a highly relevant issue that has been subject to legislation. Maximum deadlines for invoice collection have been established, which are shorter than those traditionally used.
In practice, this regulation is not being followed, as shown by recent data from Cepyme’s Observatory of Delinquency, which indicates delays of up to 20 days beyond the deadlines established by law.
This regulation alone is not enough to reduce the risk of unpaid invoices, and the ones most affected by this situation are self-employed workers and small and medium-sized enterprises.
A reality that, in the first four months of 2024, has led to a 23.7% increase in business insolvencies in Spain compared to the same period in 2023 (according to a Solunion report).
In the face of this situation, credit insurance is undoubtedly the best and most efficient solution to reduce the risk of non-payment, since it:
- Prevents risk by providing credit information on clients’ solvency, which helps when granting credit and also facilitates invoice financing.
- Acts by managing the claims process and recovering unpaid invoices.
- Compensates for losses caused by unpaid invoices, covering up to 95% of the amount.
Every company must manage its commercial relationships with clients. Credit insurance is the best option because, in addition to professionalizing the company’s internal operations, it also provides advantages over “self-insurance”:
- A tool for market prospecting and client selection.
- Supports decision-making for the policyholder and acts as a deterrent against potentially delinquent clients.
- Protects the company’s bottom line through compensation.
- Reduces costs in credit management and client collections.
- Facilitates negotiations with banks, since the insurance provides stability to the company by minimizing the risk assumed by the bank.
- Tailored solutions to meet each client’s needs.
Credit insurance provides the financial stability your business needs to keep growing. It allows you to make business decisions with greater confidence and, above all, to protect your revenue, ensuring the long-term success of your company.
We remain at your disposal for any questions you may have.
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