EH Accounts Receivable Management Solutions

Accounts Receivable Management Solutions from Euler Hermes
Accounts
Receivable
Management
Solutions
from Euler Hermes
www.eulerhermes.us
Accounts Receivable Management Solutions from Euler Hermes
Is one of your largest assets
unprotected?
There is a greater chance that a business will experience
a loss within its accounts receivable than any other asset.
On average, 40% of a company’s assets are in the form of trade debts.
Land &
Buildings
Accounts
Receivable
The only major
asset left
uninsured
Machinery &
Equipment
Inventories
Cash
Sometimes the figure is far higher. Accounts receivable are a critical
component of your balance sheet — they directly affect your cash flow and
profitability. Yet while you insure your company against property loss, liability
and other unpredictable, high-exposure events, you’re leaving one of your
most valuable assets open to loss. There is a safer way to do business.
A credit insurance policy with Euler Hermes
delivers the peace of mind that you will get paid
for what you sell. This assurance empowers you to
sell more, with confidence.
Senior
Executives
Insured Assets
Uninsured Assets
What is Trade Credit Insurance?
Trade credit insurance, also called accounts receivable insurance, is a financial tool that manages
both commercial and political risks that are beyond a company’s control. It is protection against
your customer’s failure to pay its trade debts. This can arise because your customer becomes
insolvent or because your customer fails to pay within the agreed upon timeframe.
Who should use Trade Credit Insurance?
Any company selling on open account terms to other companies can benefit from credit
insurance. Euler Hermes policyholders can be found in all industries and are companies of
all sizes. Firms in most sectors of the economy, including business services and those
selling actual goods, use credit insurance to help their business grow and succeed.
Accounts Receivable Management Solutions from Euler Hermes
Euler Hermes – Key Facts
Incorporated in 1893, Euler Hermes is the
world’s leading provider of trade credit
insurance solutions.
We offer both domestic and export credit insurance policies that
protect clients against commercial and political risk in more than
200 countries worldwide. We also provide services to help companies
outsource their debt collection, risk management and credit
management information needs.
Euler Hermes is the North American subsidiary of the Euler Hermes
Group. Through its team of market-leading subsidiaries, Euler Hermes’
local presence spans more than 50 countries and six continents.
Our Affiliation with Allianz
Euler Hermes SA, the holding company of Euler Hermes Group, is
a listed company on in NYSE Euronext Paris and it is 68% owned by
Allianz, the global leader in property and casualty insurance.
The Allianz Group is a global financial services provider. Approximately
78 million retail and corporate clients in more than 70 countries rely on
Allianz’s knowledge, global presence, financial strength and solidity.
Financial Ratings
Euler Hermes North America Insurance Company is rated ‘AA-’ by
Standard & Poor’s. An insurer who is rated ‘AA-’ has VERY STRONG
financial security characteristics.
We maintain a financial strength rating of ‘A+’ and an issuer of credit
rating of ‘AA-’ from A.M. Best Co., indicating strong risk-adjusted
capitalization and risk management practices.
The Euler Hermes Group maintains the [highest] ‘AAA’ rated reinsurance
companies due to its strong historical and economic track records.
To schedule a meeting with a Euler Hermes
representative, please call 877-909-3224
or visit us at www.eulerhermes.us for a
free, no-obligation quote.
Accounts Receivable Management Solutions from Euler Hermes
How does credit insurance work?
A credit insurance policy is more than just a piece of paper,
it is a partnership. As a virtual extension of your company,
Euler Hermes provides the knowledge and resources you
need to manage, maximize and protect your receivables.
When you initiate a policy, we analyze the creditworthiness and financial
stability of your customers and assign them a specific credit limit, which is
the amount we will indemnify if that insured customer fails to pay.
At any time during the policy’s life, you may request additional coverage
for trade with any of your customers if the need arises. While we
continuously monitor each of your insured customers, we will evaluate the
risk of increasing the coverage and will either approve the additional credit
limit request or decline it with a clear and timely explanation. You can also
request a credit limit for a new customer with whom you would like to
start doing business.
We receive over 20,000 credit limit requests every
day and process 85% of them in less than 48 hours.
It is our responsibility to proactively monitor the creditworthiness of your customers. We do this by
gathering information about your customers from a variety of sources, including credit reporting
agencies, visits to the customer, public records, information supplied by other policyholders that
sell to the same customer, receipt of financial statements, and past-due reports.
This information is constantly updated and cross-referenced. If our information indicates one
of your customers is experiencing financial difficulty, we will notify you about this, which helps
you establish an action plan to mitigate and avoid loss. While credit insurance indemnifies losses
incurred from non-payment of commercial debt, the ultimate goal is to help your business avoid
foreseeable losses. If a loss does occur with an insured customer, we will indemnify the loss up to
the buyer’s credit limit.
Cost Justification
The extra sales revenue you’ll earn by increasing limits can
offset the cost of a policy many times over. To the right is
a sample return on investment with a Euler Hermes trade
credit insurance policy in place. This policy more than pays
for itself by enabling sales to just one additional customer.
Sample return on investment
with a Euler Hermes trade
credit insurance policy
Accounts Receivable Management Solutions from Euler Hermes
Benefits of trade credit insurance
A trade credit insurance policy is an investment — one
that can offer attractive returns through the value of its
benefits, even if you never make a claim.
credit insurance example:
Catastrophic Loss Prevention
Credit Insurance protects a company from catastrophic bad debt losses — one of
the top reasons for business failure. A large loss can lead to cash flow disruption,
and the lost profit is difficult to recover. A trade credit insurance policy
compensates you in the event of non-payment.
Sales Expansion
By minimizing risk, trade credit insurance enables you to sell more, confidently.
With the assurance that you will be paid for what you sell, your credit staff can
often approve higher limits to your existing customers and safely extend credit
to new and unknown accounts. You can also make more strategic decisions
when considering expanding sales into new markets.
Competitive Advantages in Exporting
Credit insurance provides a platform to grow your business internationally. Level the
global playing field and win more business by offering safe open terms overseas.
Better Borrowing Options
Banks typically limit what you can borrow based on the perceived risk of international
receivables, concentration of sales to large customers, or age of certain accounts.
When your domestic and international receivables are covered by a credit insurance
policy, you may be able to borrow more — often at more favorable rates.
Reduce Bad Debt Reserves
Trade credit insurance places a ceiling on bad debt losses, allowing you to release a significant
portion of your bad debt reserves — a move that can have an immediate, positive impact on
earnings. And you’ll be replacing non-deductible bad debt reserves with a credit insurance
premium that is a fully tax deductible business expense.
Average A/R Balance
$5,000,000
Total Yearly Sales (Revenues) on Credit
$30,000,000
Gross Profit Margin from Sales
10%
Total Number of Credit Customers
50
Turns (No. of times you sell to a customer in a year)
6
Estimated Premium
$45,000
Average Credit Limit – Size of A/R per Customer
$100,000
Based on the Gross Profit Margin, this is
the amount of additional Revenue you
need to offset the cost of the policy
$450k
Based on the average A/R per customer,
this is the number of new shipments you
need to offset the policy
4.5
Based on the number of Turns, this is
the total number of new customers you
need to add to offset the policy
.75
Accounts Receivable Management Solutions from Euler Hermes
Euler Hermes – credit insurance
solutions
At Euler Hermes, we provide tailored solutions to meet
the business needs of companies of all sizes and across
all industry sectors.
Our underwriters are industry specialists who will work closely with you to deliver in-depth
credit analysis and ongoing account monitoring to provide early warning of potential credit
risks before they become a loss. With thousands of policyholders from small businesses to
large multinationals, we can show you how our solutions deliver the value that matters to
your company.
Small Companies
Credit insurance can be essential to ensuring a small business’ continued success. It can provide
powerful information and support that your business might not have otherwise.
Medium and Large Companies
Whether you want to expand your business in domestic or international markets or protect one
of your largest assets, we can help you succeed with our customized credit insurance solutions.
World Agency for Multinationals
As a multinational, you have operations around the world and need a worldwide solution. At
Euler Hermes World Agency, we have the knowledge and specialists to support your business
strategy and are specifically tasked with servicing multinational clients with a turnover in excess
of $600 million and with business units located in two or more countries.
Accounts Receivable Management Solutions from Euler Hermes
Why choose Euler Hermes?
A partnership with Euler Hermes is more than just a
credit insurance policy. We deliver a multi-purpose
strategic tool designed to meet the changing needs of
your business.
Knowledge to steer your business. Through our worldwide research team, you
gain access to actionable economic intelligence, strategic forecasting, and marketspecific risk analysis. Armed with this knowledge, you can confidently extend more
credit to your customers and expand sales to new prospects.
Financial peace of mind. Our comprehensive risk monitoring process provides
advance warning of potential threats, helping you avoid loss before it occurs. As
added protection, if a default does arise we pay when your customer does not.
Global reach, local approach. With feet on the ground in 50 U.S. states and
a dedicated underwriting team for each client, we believe in the power of
personalized service. This, combined with more than 125 years of worldwide
expertise, means we provide a solid foundation to support your business goals.
Comprehensive credit function support. When you work with Euler Hermes,
our team becomes an extension of your team. Our industry specialists conduct
in-depth credit analysis and ongoing account monitoring to strengthen your credit
management procedures.
Tailored tools and resources. Our online policy administration system, EOLIS,
simplifies policy management and provides instant, secure access to policy
information and fast coverage decisions.
International collection services. We provide the full scope of receivables
management services. Our dedicated claims and collections units handle claims
quickly and efficiently to take the worry out of managing unexpected default.
Accounts Receivable Management Solutions from Euler Hermes
Your client experience
Euler Hermes believes in a proactive approach when
it comes to building a strong client experience and we
embrace the opportunity to be a key partner in our
customers’ credit management processes. That’s why
we offer state-of-the-art services to help you meet your
business needs in an efficient, streamlined manner.
95% of issues raised to ASD
are answered within one call
Advisory & Solution Department (ASD)
The Advisory and Solution Department (ASD) is a diversified underwriting team within the
customer service department. The ASD team provides you with a single point of contact,
empowered to resolve almost any issue related to your policy, from new credit limits to claims.
ASD also allows for more efficient service by routing customer service concerns directly to a
dedicated staff member with no unnecessary delays and no automated directories. ASD offers
live support available by phone or email 12 hours per day.
Euler OnLine Information Service (EOLIS)
As a policyholder you’ll have access to the Euler Hermes Online Information Service (EOLIS).
EOLIS empowers you with instant, secure online access to policy information, including the ability
to obtain coverage decisions in real-time. Connecting to EOLIS enables you to:
◾ F ulfill new orders without delay by getting requests for coverage answered quickly
◾A
ccess your current policy coverage and decisions report
◾ S ubmit credit limit requests and monitor their status in real-time
◾ S ubmit claims online and access updates on claims activity at any time
◾V
iew buyer information and collection files in progress
◾C
reate reports to monitor and optimize your accounts receivable
Euler Hermes pays 85,000
claims per year
Claims Services
When you insure your accounts receivable with Euler Hermes, you can count on being paid for
what you sell, even if one of your covered accounts suddenly faces insolvency or is otherwise
unable to pay. The Claims Group within Euler Hermes handles all pre-claim activity, and is
dedicated to providing world-class customer service. Similarly, the First-time Claim Unit helps
first-time filers receive specialized training to resolve their claim. The Claims Group is committed
to handling claims quickly and efficiently to take the worry out of managing unexpected
insolvencies and past due situations.
Accounts Receivable Management Solutions from Euler Hermes
Collections Services
As a Euler Hermes credit insurance policyholder, collections services are included as an
integral part of your client experience should you incur a loss. However, you don’t have to be a
policyholder to utilize these services.
Euler Hermes Collections North America (EHCNA) was founded in 1917 and has developed an
excellent reputation within the U.S. credit granting community by providing businesses with
reliable, customer-focused and results-oriented collection services. With global collections
coverage in 150 countries, we offer:
◾ Results: We provide a full range of time-based commercial collections and receivables
outsourcing services for large, small, local and international companies.
◾ Benefits: Through our online suite of services, EHCNA clients can place claims, review
collector notes, run a statistical review of claims and gain access to a wide array of
information – including our proprietary debtor index.
◾ Reports: Obtain timely and thorough progress reports with standardized EHCNA summaries of
assignments which can be delivered electronically and through regular mail.
◾ Accessibility: We have placed a team of District Managers across the country to offer
immediate customer service feedback whenever there’s a question, problem or special
request. We welcome the opportunity for a face-to-face consultation.
By working with Euler Hermes Collections North America you can free up internal staff to focus
on the credit function and reduce or eliminate the internal costs associated with in-house
collection efforts. In addition, we work on a contingent fee arrangement in most cases, so you
can be certain that your cases will command our full attention.
Accounts Receivable Management Solutions from Euler Hermes
Euler Hermes North America Headquarters
800 Red Brook Boulevard
Owings Mills, MD 21117
Phone: +1 877-909-3224
Fax: 410-753-0952
[email protected]
www.eulerhermes.us
Euler Hermes Regional Offices
Eastern Region – New York
Euler Hermes
One Penn Plaza, Suite 3325
New York, NY 10119
Phone: +1 877-905-3224
California
Euler Hermes
3011 Townsgate Road, Suite 130
Westlake Village, CA 91361
Phone: +1 877-901-3224
Central Region – Chicago
Euler Hermes
3333 Warrenville Road, Suite 160
Lisle, IL 60532
Phone: +1 877-904-3224
Collections
Euler Hermes Collections – Corporate Office
600 South 7th Street
Louisville, KY 40201-1672
Phone: +1 800-237-9386
Southeast Region – Atlanta
Euler Hermes
400 Perimeter Center Terrace, Suite 75
Atlanta, GA 30346
Phone: +1 877-884-3224
Canada
Euler Hermes
1155 René-Lévesque Blvd West, Suite 2810
Montréal (Québec) H3B 2L2
Phone: +1 877-509-3224
Southwest Region – Dallas
Euler Hermes
15301 Dallas Parkway, Suite 1060
Addison, TX 75001
Phone: +1 800-527-0346
To schedule a meeting with a Euler Hermes
representative, please call 877-909-3224 or
email [email protected]
for a free, no-obligation quote.