What Are The Benefits
Of Credit Insurance?
Credit insurance provides not only peace of mind to you, but also the following key benefits:
Allows companies to lower their bad debt reserve
Credit insurance will allow you to lower your bad debt reserve significantly and manage write-offs with greater certainty. By reducing the bad debt reserve on this scale, you will be able to take excess bad debt reserves back into income (by provisioning significantly less) thus improving earnings, shareholder equity and financial ratios etc. Credit Insurance premiums are tax deductible (whereas your bad debt reserve is not).
Helps avoid an unexpected significant impact on your company
For example, you would have to generate a significant amount of future sales at $0 profit (beyond your normal sales) to make up for a credit loss.