Trade Risk Management

Effective cash flow management is critical for every business, especially small businesses, as it ensures the smooth running of operations, timely payment of salaries and bills, and supports growth investments. However, no business is immune to unexpected cash flow problems, whether caused by late payments, customer insolvency, or unprofitable investments.

The accounts receivable turnover ratio is a crucial financial metric used to evaluate how effectively a company extends credit to customers and collects outstanding payments. Efficient management of accounts receivable turnover is vital for maintaining healthy cash flow, optimizing business operations, and ensuring profitability.

In corporate finance, managing outstanding balances—the amounts owed to creditors by debtors—is crucial for maintaining a company's financial health. Credit protection plays a vital role in safeguarding businesses from risks associated with customer defaults or late payments, thus ensuring stable cash flow and secure financial operations.

Bad debt represents money due to your company which is unlikely to be paid. Tracking and managing bad debt is essential to ensure a company’s financial health.

“Accounts Receivable” (AR) refers to the money owed following a transaction in which the buyer has not paid for the goods or services they have received. Let us take a closer look at the definition of AR and its meaning in practice for small- and medium-sized businesses.

How small and mid-sized businesses can safeguard their growth, assets, and client relationships with trade credit insurance.

Days Payable Outstanding (DPO) measures the average time a company takes to pay its suppliers or vendors after purchasing goods or services on credit. Accurately calculating and analyzing your company's DPO is essential for effective cash flow management, improving supplier relationships, and strengthening negotiating leverage.