Non-Recourse Invoice Discounting Facility v Recourse Invoice Discounting with a separate Credit Insurance Policy

In his latest blog, Mark Barton of our UK associate, Hanwell Atkinson Ltd, assesses the pros and cons of non-recourse invoice discounting compared to recourse invoice discounting allied with a credit insurance policy.

Many companies factoring their invoices also wish to take advantage of credit insurance or bad debt protection and this can be achieved in one of two ways. Some factoring companies offer a non-recourse factoring facility which, as the name suggests, is without recourse to the client in the event of a failure of the customer. Read more

AU Group International conference 2014

AU Group held an International Conference in Paris on the 6th and 7th of February 2014. This event was particularly welcomed by the AU “Family”, because of recent new business successes that reinforce AU’s commitment to a continuing improvement of its worldwide servicing capabilities.

AU Group started to build its international capability over 20 years ago. At the time this was to support large French corporates which were increasing their overseas representation and to help foreign groups protect their sales in OECD. Being global for several years, AU has built an organisation, in which each member shares the same long term values, able to deliver a uniform and consistent service everywhere in the world.

This becomes feasible by agreeing best procedures, coordinating teams but especially by increasing communication and sharing best practice among members. The last International Conference had confirmed this strategy was the right one.

80 people represented by 20 nationalities met for two days during which the time was split between conference presentations and small team workshops covering subjects such as international sales, policy management, IT tools, reporting etc… All the attendees agreed on how fruitful the event was and how rich were the exchanges. Furthermore this close collaboration was evidenced by the recent success stories AU Group had in 2013. The conference confirmed that AU group is the only Trade Credit Insurance & Finance broker organisation which is working as one united team.

The next International Conference will be organised in Germany in 2015.

Insuring against a transfer risk

A non-transfer risk, sometimes accompanied by a currency risk, is a hazard encountered by exporters which results in them not being paid for technical reasons or on account of the geopolitical situation of the importing country.   Regulations in favour of the exporter are revoked resulting in the failure to repatriate funds or dividends out of the foreign country. Read more

Dare to invest in Africa!

Only export or innovative businesses are optimistic in the current climate!

There can be no doubt: at a time when many European economies are ailing, the export market, particularly the large export market, is becoming a path to achieve growth for a large number of companies, irrespective of their size.

With Africa’s average GDP standing at 4.5% and can exceed 10% in certain countries such as Angola, the African economic pace is attracting companies willing to invest.

By trading in Africa, companies need to recognise they will deal with new risks which may require a precise analysis of the situation, notably in the area of customer risk evaluation.

This risk can be transferred to the credit insurance market and our customers seek first and foremost to build a partnership with a credit insurer with the local country experience and ability to write credit limits for debtors in those countries.

Credit risk analysis is based on the overall business and political environment, transparency of company accounts and creditor protection in the event of default. But insurers also take into consideration the business relationship and past payment experience between the insured and its buyer.

Analysis of the political risk may be linked to factors such as the date set for the country’s next general election, the rising costs of basic necessities, fluctuations in the cost of raw materials and the buyer’s location within the country. The risk will also vary depending on the presence of differing communities, faiths or ethnic groups within the same country. For example, in the region of Azawad in Mali, credit insurance analysts suspended all cover but continued to insure business transactions in the Bamako area.

It takes time to build a trusting relationship with buyers.

Our qualified professionals can work with you to reduce your risks by securing your sales in Africa.

All that remains to be found is the most appropriate policy solution, optimize your limits so as to be able to work on an “open account” basis with your customers and promote the development of your business in Africa in full confidence.

News and issues from credit management IT tools

The Financial and Administrative Directors Congress held in July 2013 concluded that whilst the fall in bank loans hampered many businesses weathering the current financial crisis, finding cash remained at the biggest current concern for CFOs.

IT suppliers in Credit management platform solutions have been quick to react, offering flexible solutions aiming at optimising cash flow and reducing Days Sales Outstanding (DSO).  So why go looking for additional cash sources when accounts receivables represent a company’s main asset and potential in-house resource ? Read more