Trade Credit Insurance policies commonly contain rules about how long an invoice can remain unpaid before action must be taken.

Businesses should not simply allow overdue debts to continue indefinitely.

What should I do when an invoice becomes overdue? #

Continue normal credit control procedures and review the Trade Credit policy requirements.

This can include:

• Contacting the customer.
• Following up unpaid invoices.
• Recording collection activity.
• Reviewing the customer’s total outstanding balance.
• Checking the insured credit limit.
• Monitoring any maximum extension period.

What is a maximum extension period? #

Some Trade Credit policies allow a customer additional time after an invoice becomes due before the debt must be reported or further supply stopped.

The period and conditions vary by policy.

Continuing to supply a customer beyond the permitted period can affect cover for subsequent transactions.

When should Webber Insurance be contacted? #

Contact Webber Insurance where:

• A significant invoice becomes overdue.
• A customer asks for substantially extended payment terms.
• There are concerns about the customer’s financial position.
• The insurer has reduced the buyer’s credit limit.
• The customer repeatedly breaches payment terms.
• Formal recovery action may be required.

Early action can help preserve policy rights and reduce the size of the potential loss.

Should I keep supplying an overdue customer? #

Do not assume that future sales will remain insured.

The policy may contain a point at which cover stops unless the insurer has agreed otherwise.