On September 29, the State Financial Supervision and Administration and the Ministry of Commerce jointly issued"Notice on Strengthening Commerce and Insurance Coordination to Do a Good Job in Domestic Trade Insurance", pushed domestic trade credit insurance (called "domestic trade insurance" in the industry) to the front. For a factory that has been suppressed by credit sales all year round, this is a tool worth an hour of research:It is not that credit sales cannot be done, but it must be done within the framework of someone taking care of it.This article clearly explains what domestic trade insurance is, how to use it, and how to combine it with account period management. Source:Official website of the Ministry of Commerce (Finance Department, released on September 29).
1. What is covered by domestic trade insurance
Domestic trade credit insurance protectsbuyer credit risk: You shipped the goods and gave the account period according to the contract. As a result, the buyer went bankrupt, lost contact, and maliciously defaulted. The insurance company will compensate you for the loss of accounts receivable according to the agreed proportion. It solves the most painful problem in domestic trade credit sales-profits are earned by a single order, and bad debts are lost for a year.
The direction of the two departments 'document this time is to promote collaboration between business and insurance: to allow insurance institutions to better understand the actual situation of industries and enterprises, and to allow domestic trade insurance to better serve domestic trade flows. The signal from the policy side is very clear-today, when credit sales are normalized, credit risks must be managed by market-based tools, rather than relying entirely on the boss's personal guarantees and verbal trust.
2. Which factories are most suitable to go first
- High proportion of credit sales:Downstream are dealers, engineering channels, and factories in the supermarket supply chain. The accounting period is generally 30 to 90 days. Accounts receivable suppress the output value for several months all year round. Such enterprises are standard users of domestic trade insurance.
- High concentration of large orders:For factories where the top five customers account for more than half of revenue, an accident with a single customer is a heavy blow. Insurance distributes concentration risks more directly than any internal system.
- Want to expand the ability to take orders:With the buyer's credit limit of insurance companies, you dare to enlarge the account period you dare to give new customers-many factories either have no orders, but dare not accept orders with large account periods.
- Downstream industries in the downward period:In factories in the real estate chain, building materials, and some equipment industries, the probability of customers being hit by lightning has increased. It is time to build credit tools. Don't wait until you have a bad debt before you think of insurance.
3. Practical insurance practices: four steps
First step,receivable base: List existing customers by account period, amount, and cooperation period to calculate the total annual credit sales and the maximum single-account exposure. This is the pricing basis of the insurance plan. Second step,Find two or three insurance institutions for inquiry: The domestic trade insurance premium rate is related to the industry, buyer structure, and historical compensation. The quotations from different companies may be quite different for the same plate. Ask about the compensation ratio (usually 70% to 90%), deductible amount, and limit approval process. Third step,Limit declaration for key customers: The insurance institution will approve a credit limit for each buyer, and only credit sales within the limit will be within the scope of protection-this process is actually a free buyer's credit survey, and the insurance company will check it in detail than you do yourself. Fourth step,Embedding the process into the order taking action: New customers first check whether there is a limit if they place an order. If they exceed the limit, they will either wait for approval or reduce the account period, making the insurance rules part of the order receiving rules.
4. How to combine accounting period management: Three layers of defense
- Level 1: Contracts and credit.The credit sales limit is determined according to customer levels, and the contract specifies the payment node and overdue interest-this level controls "whether or not to credit and how much to credit."
- The second level: process monitoring.If the statement is issued every month and the payment is abnormal (the frequency of postponement increases, the check jumps, and the order suddenly enlarges), a re-evaluation is triggered-this level of control "something happens when it comes to credit."
- The third level: insurance coverage.Most of the bad debt losses within the limit are covered by insurance, while retaining the right of recovery-this level of control ensures that "something goes wrong will not be fatal." When the three layers of defense combined, credit sales turned from gambling to a price-priced business.
5. Three common misunderstandings
Misunderstanding 1: If you take out insurance, you can credit it casually.Insurance compensation is for the part within the limit. If the limit is exceeded and the account period is not reported in time, compensation may be refused, and discipline cannot be relaxed.Myth 2: Don't worry about small customers.In bad debt statistics, small and medium-sized customers have a high frequency of accidents. The quota system must cover all customers selling on credit, but the amount is different.Misunderstanding 3: Wait until there is an accident before studying the terms.Claim requirements such as declaration time limit, reconciliation vouchers, and sign-in documents are all accumulated from daily actions. Documents should be managed according to claim requirements on the first day of insurance.
common problems
1. 1. What is the approximate level of the domestic trade insurance premium rate and is it worth it?
Rates are linked to industry risks, buyer structure, and historical claims. There are large differences between different companies. It is possible to make inquiries based on the range of a few thousandths to about one percent of the annual credit sales. Calculate the value by multiplying the annual credit sales amount by a bad debt scenario (such as 5 thousandths to 1 percent), comparing the premium quote, and taking into account the incremental orders brought by the dare to release period. Most credit sales factories are cost-effective. The actual inquiry shall prevail.
2. 2. What are the common reasons why insurance companies refuse compensation?
They are concentrated in four categories: shipments exceeding the limit, declarations exceeding the agreed accounting period, incomplete documents (missing sign-in forms, statements, invoices), and concealment of overdue insurance. By making declaration and document management a daily process, these pits can be avoided.
3. 3. What should I do if the customer is unwilling to cooperate with the credit investigation?
Regular customers are no strangers to the bank's credit reporting process, and the data requirements for limit verification are usually light (business license, financial statements or tax records). You can focus your words on cooperation upgrades: "Account period enlargement is the approval of the credit line required by the company's process. "Customers who really refuse to give basic information should themselves be downgraded.
--Qihang AI Foreign Trade Research Institute·Let China Intelligent Manufacturing Set sail to the sea| Foreign trade customer consultation: 180-0327-6609
