- Check credit limits and debtors
- Avoid excessive advance payments
- Apply for deferred collection in good time
- Clean up your balance sheet for better ratios
- Calculating insured turnover: you do not have to declare everything
- Check whether your policy still matches current conditions
- If there is a holiday closure take action in advance
Tip 1. Check credit limits and debtors
The bulk of credit insurance policies have a one-year term (usually until 1 January). Unless the insurance is cancelled in time, it automatically continues for one year. So does all credit limits/tests, on which you pay fees. It is therefore time to check whether you really need all credit limits or whether you might be able to let some lapse. Also consider which debtors you do or do not wish to continue with based on self-assessment.
Tip 2. Avoid excessive advance payments
It is important that you communicate any changes in your insured turnover to us in good time. Only then will we be able to properly estimate the amount of advance notes for 2018. Advance premium notes are pre-taxed with 21% insurance tax on the estimated domestic turnover. You will not pay insurance tax on the premium relating to your turnover abroad.
Tip 3. Apply for timely deferred collection
Around the holidays, it is common for companies to be poorly served and not pay their bills on time. All credit insurance contracts have a deadline by which collection proceedings must be initiated. If you do not expect your debtor to pay within the set deadlines, it is wise to apply for a deferral of collection from your credit insurer in advance. If you fail to do so, your credit insurer may reject a possible claim.
Tip 4. Clean up your balance sheet for better ratios
The item accounts receivable is one of the largest asset items on the balance sheet at most companies. Reducing the size of this item leads to an interesting improvement in the ratios on your balance sheet. Therefore, pay extra attention to collecting your receivables now and consider carefully whether you can still have defaulters collected by a collection agency. You can submit your "uninsured debt collection" here.
Tip 5. Calculate insured turnover: you do not have to declare everything
At the end of an insurance year, you should declare the insured turnover to your credit insurer.
Note: You do not need to make declarations on turnover with:
- Private individuals;
- Cash payments, advance payments;
- Government agencies, unless there is political cover;
- A 0-limit or negative review provided it is less than one year old;
- Related debtors (consider a parent and subsidiary),
unless covered under the policy.
Once the final turnover statement has been determined, you will receive a final invoice. This will settle the advance invoices and determine any premium refund/surcharge scheme.
Tip 6. Check whether your policy is still in line with current conditions
The end of the year is the perfect time to check whether the policy is still in line with your current operations. This prevents surprises and reduces the likelihood of a claim being rejected. Therefore, check whether you still want to cover, for instance, affiliates, uninsured countries, manufacturing and contract risks or prepayments. Also check whether the maximum payment terms, deadlines for filing collection cases and claims mentioned in the insurance policy still match your practice.
Tip 7. Is there a holiday closure take action in advance
If you are unable to meet your policy obligations within the deadlines mentioned in the Policy Schedule because your business is closed due to annual holidays, it is best to contact Xolv so that we can suggest a suitable solution.
