Tips for Managing Credit & Risk Trading​

Gearing ratio is one way to measure a company’s financial health. It involves comparing the capital to the amount of money the company has borrowed.   It is an indicator of how “levered” the company is. In other words, it refers to the extent to which debt finances the operations of a company.   A high gearing ratio shows that a company has a high level of debt compared to its equity. Depending on the industry, this may (or may not) be an indicator of financial risk.

Maintaining a healthy cash flow is the hallmark of any well-run business. But the ever-present risk of late or non-paying buyers can quickly jeopardize that stability, especially in a climate of economic uncertainty and growing insolvencies.   Several approaches can offer you early warning signs of distressed buyers who may be struggling to pay, as well as provide varying levels of protection against bad debt. Here are six strategies that are worth considering when seeking to safeguard your business against growth-inhibiting cash flow disruptions.       Download brochure

As every business person knows, there can be a big, long gap between revenues and actual cash flow – especially when you have customers who demand “generous” payment terms and wait until the last day to remit.    One way to bridge that gap is by borrowing against the value of the invoices you’ve issued… a procedure called invoice financing. What is invoice financing? How does invoice financing work? Is it a good fit for your business? In this article, we provide an invoice finance definition and explain how it can help you improve your working capital and safeguard your cash flow.

Late payment refers to the failure to pay a debt or invoice by the due date agreed upon between the creditor and the debtor. It can refer to both personal and business debts.  Late payments are responsible for a quarter of all business failures. But even one late payment can cramp your cash flow. Legal measures to recoup the funds can create constraints on your time and resources. A late payment letter may not be sufficient. In this article, we discuss how to handle overdue payments and how to avoid them in the future.

A succession of macroeconomic shocks in recent years has forced organizations to reconsider the best approach to de-risking their global trading networks. Here we explore how to manage economic risk in international business, showcasing four ways companies are managing economic risk factors in order to expand their business globally.

Businesses now have to wait 59 days on average to be paid for sold goods and services. What approaches can help them offset the impact of such sluggish payment practices?

​How to forecast cash flow? A cash flow forecast is a financial tool used to estimate the money that will flow in and out of a business over a period of time. It helps businesses plan for future cash needs and ensure they have enough funds to meet obligations. Read our tips on cash flow management, calculation, and projection.   Even profitable and successful companies can be weakened when faced with late payments or a customer insolvency. There is much to do to protect your business from bad debts: picking the right customers to trade with, implementing processes to ensure invoices will be paid on time, integrating cash flow management in all your investment decisions, or subscribing a trade credit insurance policy.   But it all starts with having an up-to-date cash flow statement and creating a cash flow forecast. Let’s have a look at how to calculate cash flow and how to make a cash flow projection.

Business cash flow management is essential, in particular for small businesses. It pays salaries and bills and allows to invest in growth. But no business is safe from unexpected cash flow problems, whether they are due to late payments, a customer insolvency or an investment not generating as much revenue as expected.   Some common cash flow problems are:   1 Lack of cash reserves   2 Borrowing at higher rates   3 Decreasing sales or lower profit margins   4 Outstanding receivables from customers   5 Uncontrolled business expansion   6 Inaccurate financial forecasting   7 Poor bookkeeping practices   In the current context, it is more important than ever to avoid cash flow issues and safeguard your money in order to protect your company growth. In this article, we share several solutions to cash flow problems.

Days Sales Outstanding (DSO) is a poorly known yet key indicator in managing and improving your cash flow. If you want to know more about what DSO is, how to calculate it and work on DSO improvement, the following is a close-up on these three letters that will help you implement an efficient and balanced credit risk policy.