Sales wants to move forward with a customer, but Finance first needs to check the credit limit and insurance coverage. When customer data, credit information and policy terms are scattered across different systems, this takes time and risks may go unnoticed. How can you ensure that credit management supports commercial decisions? In our webinar with Aon, DPD and Allianz Trade, we discussed how reliable business data and credit insurance reinforce each other.
Effective credit management starts with up-to-date customer information
Do you know which legal entity you are doing business with? And is the credit information you base your decision on still up to date? These are important questions when determining a credit limit.A customer may grow, change its business activities or start paying later. A one-off check during onboarding is therefore not enough.
As Els van Leeuwen, Digital Product Lead at Aon, explained during the webinar: Data is dynamic. You are not done once you have used it.”
By linking business information to your customer data and monitoring relevant changes, you can assess whether existing agreements are still appropriate. It is also important to know which information was used and when the assessment took place. This helps you substantiate decisions and comply with the terms of your credit insurance policy.
Interesting read: Managing credit risk: are you prepared for these 3 developments?
How DPD integrates credit insurance into its processes
At DPD, a small credit management team manages a portfolio of approximately 4,000 to 5,000 customers. Manually checking whether customer details, credit limits and insurance coverage were still aligned was difficult to scale. In addition, it sometimes became apparent only when a claim was filed that not all policy conditions had been met.
With Aon PolicyManager, DPD brings together its own customer data, D&B business information, policy terms and credit limits set by the insurer. This enables the team to identify where attention is needed, for example when a limit changes or additional information is required.
This approach also changes the conversation with Sales. When it is clear why a credit limit is insufficient, both teams can explore the available options together. These might include additional financial information, revised payment terms or extra security. In this way, credit management helps the business assess commercial opportunities on a well-founded basis.
Interesting read: Aon and Altares Dun & Bradstreet join forces for data-driven credit insurance
A credit limit requires clear follow-up
Taking out credit insurance does not mean that every outstanding receivable is automatically covered. You must also comply with the policy conditions. The following five steps help you incorporate these requirements into your day-to-day credit management process.
1. Map out the policy conditions
Document the applicable credit limits, payment terms and notification requirements. Make sure it is clear what these mean for your day-to-day credit management.
2. Bring data and credit limits together
Link up-to-date business information to credit limits and outstanding receivables. This gives you a clearer view of where you can continue supplying customers and where risks are increasing.
3. Identify when action is needed
Monitor changes in payment behaviour, credit limits and insurance coverage. Agree on which signals should trigger a review.
4. Clarify responsibilities
Determine who should take action when a credit limit is missing or coverage expires. Finance and Sales should work together to assess the conditions under which deliveries can continue.
5. Document decisions
Record what decision was made, by whom and based on which information. This allows you to justify decisions afterwards and maintain a clear overview of the risks.
Greater control over credit risk, more room to do business
DPD's approach demonstrates the importance of bringing business data, credit limits and policy conditions together. With clear agreements on follow-up, you know when you can continue supplying customers and when adjustments are needed.
Want to gain greater control over your credit insurance? Speak to our experts and discover how PolicyManager helps you manage credit limits, policy conditions and follow-up in a clear and structured way.
