Many businesses are unaware of or have never heard of Accounts Receivable Insurance. This insurance provides unexpected circumstances that may arise if the business doesn’t get paid by its customers.
Suppose your business provides service to a client or customer and once this service is completed, the customer is to provide you payment. However, the client does not submit payment due to hardship or goes out of business or declares bankruptcy. This can create a big issue for your business.
In situations as these, the accounts receivable insurance steps in and covers a percentage of the outstanding balance or receivables.
The accounts receivable insurance also enhances cash flow and helps maintain a steady and predictable cash flow. When payments come in on time, the businesses can take care of the expenses and submit their accounts payables on time.
Businesses also rely on steady income for growth, operational expenses and to meet any financial obligations. If the accounts receivable is affected, it affects the business in several ways. Therefore, accounts receivable insurance enhances cash flow for the business.
Also, when a business has accounts receivable insurance, it helps the business have easier access to financing. Lenders see accounts receivable insurance as a positive element when considering giving loans or credit lines. Insurance lets the lender feel protected and the business a lucrative option.
Having the safety net of accounts receivable also allows the business to look into growth opportunities. It allows the business to feel protected and confident. It helps them reach larger clients, offers better credit terms, which helps them grow and increase their sales.
If a large client takes its business elsewhere or simply terminates the contract, the business has a softer blow then the hard impact of losing a large client.
Most importantly, the business owners can have a peace of mind knowing that if circumstances change with their clients, the outstanding payments are covered with the accounts receivable insurance.
Lastly, the accounts receivable insurance can be modified to cover your specific business needs. You can tailor the coverage to the industry challenges and to address customer dynamics in its line of business.
Accounts Receivable Insurance not only provides a safety net but also helps business credibility, helps it achieve growth and financial stability along with protecting the business when the need arises to cover the impact of non-payment.
If you are a business owner and are seeking information on accounts receivable insurance, Karstens Financial can tailor the coverage to address your business needs.
At Karstens Financial, we assist you in customizing your accounts receivable insurance. One policy can cover multiple customers, or you can apply coverage to only your largest. Contact our representatives to provide you with excellent service at Karstens Financial.