ECA

3 Smart Money Moves to make when exporting

24.05.2018 Chris Little
3 Smart Money Moves to make when exporting

Budgeting strategically and building credit are just two critical steps for long-term financial success. Selling to clients in the same state, country, time zone and in the same language is hard enough. But exporting to foreign countries adds a whole new level of complexity to the mix such as currency fluctuation, shipping delays and non-payment. In fact, non-payment is one of the biggest fears for exporters. Fortunately (or unfortunately) you’re not alone. 80% of ultra-long overdue invoices that are greater than 120 days are uncollectable*.

With recent changes in world trade conditions – it has made managing cashflows more difficult. Increased competition between suppliers has meant that overseas buyers are now regularly able to demand and obtain “open account terms.”

If you are planning to export or already exporting and you want to maintain a healthy financial position, employ these effective money-saving strategies.

Keep your financial health in check.

As your business grows, you need to make sure you work with an accountant that understands the fundamentals of your business and where you are looking to go. Your accountant will help you stay on the right track with your financials as you expand into new markets or enter into an export supply chain.

A simple invoicing and payment collection process.

Before making the leap into the international market, take the time to understand how different invoicing requirements, taxes, tariffs, and even time zones and languages will affect your invoicing and payment processes. Also take into account the limited legal recourse you’ll have holding companies accountable across national borders.

Begin with credit checks.

What seems to be a fundamental practice, it’s scary to know that more than 50% of businesses don’t do credit checks before they extend credit to their customers^. Not all customers are made equal. When your cash-flow is contingent on each party paying on time you need to know who can afford to extend credit to and who you should be asking for alternative payment methods. By obtaining timely and accurate credit decisions you can capitalise on the right opportunities at the right time.

To make exporting simpler and easier, ECA have partnered with Coface to provide you with your Credit Check solution. Find out more here.

About Coface:

Coface, a world-leading credit insurer, offers 50,000 companies around the globe solutions to protect them against the risk of financial default of their clients, both on their domestic and export markets.

*Source: Coface Global Debt Collection
^Source: Coface APAC Payment Survey 2016

 

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