Accounts Receivable Insurance: The Basics

2007-03-08 10:33:40

( Insurance )



If you are a business owner, you probably have a financial system in place to keep track of your accounts receivables. Your system can be on paper or stored in your computer. As a business owner, you are also aware of how important your accounts receivables are and you keep meticulous records so that you do not make mistakes. An accounts receivable insurance can protect you from most financial pitfalls.

There are two different types of accounts receivables insurance being offered by major insurance carriers. The first deals with domestic accounts receivables. This protects you and your business against a customer non-payment who is in the country. The second protects your business against non-payment customers outside your home country. In addition, foreign accounts receivables insurance also protects you from customer non-payment due to political events.

There are several advantages to having an account receivable insurance. This type of insurance can soften the impact of a bad debt sale. Accounts receivable insurance allows you to cover the lost sale while still providing cash flow. It also ensures that your company assets and your equity are protected in cases where your customer defaults. By getting accounts receivable insurance, you can confidently ease into getting new markets with minimal risk.

Another advantage of getting accounts receivable insurance is you get easier access to bank financing. Banks usually base their rates upon the company’s accounts receivables. With accounts receivables insurance, the bank is basically secure against customer non-payment. By getting accounts receivable insurance, you are protected against your losses and your bank can provide you with better rates.

Major insurance companies also provide comprehensive accounts receivable software to their customers along with their insurance. This provides you with instant access accounts and would allow you to see a better, more organized picture of your accounts receivables.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.