Managing Risk through Trade Credit Insurance

The news of winning business overseas is quite exciting. However, people sometimes overlook the risk that comes with exporting products to a new land. One of these risks is that of failure to receive payment due to a number of reasons including falling prey to trade scammers or because of political unrest among other factors.  Such risks cause uncertainty and that is why insurance is crucial to give one peace of mind regarding the unknown future. With trade credit insurance - NicheTC, one feels more secure with account receivables. Through trade credit insurance policy, one can be able to recover overdue receivables.

Why exactly do you need trade credit insurance?

There are various reasons why credit insurers such as trade credit insurance – NicheTC will prove important to a trader who makes credit sales. You need trade credit insurance because:

  1. A customer could become bankrupt: Cases of bankruptcies are not rare and they make it impossible for a trader to collect in full the amounts owed by such customers.
  2. Interruption of foreign trade: Typically, some unforeseen issues could affect foreign trade. Sometimes a government that comes in place could deny trade permit, which definitely affects international trade. Similarly, there could be delays in communication, which in turn delays payment. With trade credit insurance, the chances of recovering your money increases.
  3. Providing a competitive edge: A trader who has credit insurance is able to extend more credit for more days, which is a competitive advantage for such a trader since people will go for the better pay terms where they are given more credit and more time to make payments.
  4. Attract financing: Nobody aims at remaining where he or she starts with the business. It is the aim of every businessperson to expand operations and grow the profits. Sometimes one will need some loan to do so. However, lenders will want to extend loans to people who are less risky. Having trade insurance makes one a less risky borrower and therefore one can be considered for a loan unlike when the account receivables are unsecured.

trade credit insurance - NicheTC

Choosing a trade credit insurer

While there are many insurance firms and brokers providing trade credit insurance, including trade credit insurance – NicheTC, it is always necessary to do enough homework to be able to choose the right one. Various things you should consider in choosing a trade credit insurance provider include but not limited to:

  • Provider’s willingness to be a good partner: You must identify a provider who is willing to learn and understand your business. A provider who wants to become a true partner is not only interested in a one-time transaction, but rather will want a long-term relationship with the insured. Therefore, such insurers will keep in contact with the insured.
  • Provider’s knowledge of the supply chain: Notably, most bad debts originate from the supply chain. A good supply chain ensures on time deliveries free from error. The insurance provider must, therefore, understand the risks in the supply chain.
  • Insurer’s ability to evaluate customers: The insurer has enough resources and data to help the client in evaluating customers to know when to extend credit. Hence, a good insurance provider should help in making fast client evaluation.

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Insurance brokers are an inseparable part of insurance business

Taking up an audit insurance is a convenient approach to mitigate the additional expenses on audit fee payable to Australian Tax Office (ATO). But, you find there are several audit insurance companies each offering insurance policies with varying features. In such a situation, you may consult audit insurance brokers who would guide you in choosing a suitable insurance company. In an article entitled ‘Facts and figures – Insurance Brokers’, Billy Bennett points out that in Australia, more than half of the insurance businesses go through the insurance brokers.

The role of insurance brokers:

Basically, insurance brokers are agents who market policies from different insurance companies. The brokers market various types of policies like life insurance, accident insurance, tax audit insurance and so on. The brokers have a thorough knowledge of the features of insurance policies from different insurance companies. They guide you in taking up a suitable policy depending on your specific requirement. However, there are some insurance brokers who are specialized in a particular type of policy, like, for example, audit insurance policy or life insurance policy and so on.

Registration of brokers;

According to the law prevailing in Australia, the audit insurance brokers are required to register themselves under the Financial Services Reform Act 2001. Normally, in Australia every insurance broker is a member of the National Insurance Brokers Association of Australia (NIBA). This Association acts as a nodal agency to regulate the activities of its member brokers. In fact, the NIBA has drafted certain codes of conduct or guidelines to ensure fair business practices from every member broker.

Scrutiny of ASIC:

Further, every insurance broker is required to conduct business in a fair manner and with due regard to the ethics of business. The activities of the audit insurance brokers also come under the scrutiny of Australian Securities and Investment Commission (ASIC). As a matter of fact, ASIC is regarded as the sole commonwealth regulator for consumer protection.

Approach the insurance company directly:

There is no law which prescribes that insurance policies should be taken only through an insurance broker. In fact, you can approach any insurance company directly and choose insurance on your own.  But, choosing the insurance policy availing the expertise of an insurance broker has certain advantages.

Compare different policies:

As a layman to the world of insurance business, you will be guided only by what the insurance company representative tells you about a given policy. You will not have any opportunity to compare the given policy with similar policies from other insurance companies. In the absence of such comparison, you would fail to make a proper evaluation of the pros and cons of different policies.

Guidance from the broker:

But, the insurance broker will ascertain your needs and present to you policies from different insurance companies that suit your requirement.  He will explain to you the salient features of each of these policies. Thereby, you will get a comprehensive view of varieties of insurance policies. Added to these, the insurance broker will guide you suitably to choose a policy that could offer you greater benefits. Normally, the insurance brokers will not collect any commission from you because it is paid by the insurance company.

Why Do You Need Proper Bookkeeping Services?

Financial services are part of any business and should get proper attention. However, it is often difficult to focus on finances and overlook other areas of business development. Besides, you may not be an expert in bookkeeping, which is why you need the services of a qualified Joondalup bookkeeper.

Experts say that without proper bookkeeping, you are in the dark as a business owner. It is impossible to determine whether you make profit or loss with your business. Any smart business should embrace proper bookkeeping services and if you are in Joondalup area, you should start by consulting a reliable Joondalup bookkeeper. The following are some of the benefits of professional bookkeeping:

It Leads to Better Cash Management

Cash management could be tricky if you lack the knowledge in bookkeeping and accounting. However, it comes with greater benefits, especially when you involve a professional to handle that area. For example, if you engage a reliable Joondalup bookkeeper, you could hand over the duties to a professional with a T-shirt for it. Major services performed here include:

  • Managing customer accounts
  • Managing supplier accounts
  • Creating budgets
  • Tracking payments and deposits

With proper bookkeeping, you can account every penny that you spend on your business.

It Leads to Making Strong Business Decisions

With proper records on expenses, income, suppliers, and others, you can make smart business decisions to take your business to the next level. A reliable Joondalup bookkeeper should help you discover new opportunities for business and new ways to reduce spending. For example, your bookkeeper might suggest that you stock more red socks instead of blue, as this may increase the sales by 50 per cent. Such ideas are meant to improve your business following the proper records kept by your bookkeeper. Besides, when you consider applying for a business loan, your records will come in handy for your lenders to use in approving or rejecting your loan applications.

It Leads to Compliance Benefits

Regardless of the type of your business, it has to comply with the tax laws. When you engage a qualified bookkeeper in Joondalup, you can pay your domestic taxes on time to avoid any penalty that might affect the operations of your business. If you need more information on reliable and best Joondalup bookkeeper, you can try visiting the website

Proper Bookkeeping Leads to Reduced Business Risks

Once you involve a qualified bookkeeper, you can have your records straight and be able to detect any fraud or misuse of funds. These two risks are common in businesses where employees and partners are involved. With an honest bookkeeper, you can be able to detect suspicious dealings and offer appropriate solutions before they get out of hand. Click here My Bookkeeper Perth

For example, if your company pays some ghost workers, the records in the bookkeeping department will have the evidence. Remember to work with an honest bookkeeper to provide a clear reflection of how your business works. Like other professionals in your business, the bookkeeper’s position is one that you cannot afford to miss.