While the Covid-19 Pandemic and ensuing lockdown and government restrictions have impacted our entire client base, nowhere has this been more keenly felt than by those supplying directly into the hospitality and tourism sectors. The following case study based on a rural drinks wholesaler highlights the immediate impact of the pandemic and the support offered in both claims and collection service through our client’s credit insurance policy.
Like many businesses earlier this year Covid lockdowns and restrictions meant that getting paid was proving very difficult for our client. In mid-March many of their longstanding and loyal customers were yet to clear large invoices due from the Christmas period. Normally income generated from St.Patrick’s Day onwards would provide the cashflow to carry these businesses through to the busy summer.
There was no Paddy’s Day and no summer tourism, it was the worst time for Covid to strike.
Since the first lockdown they have placed 36 overdue debts with their credit insurer’s collections agents, a total debt of more than €235,000. Over half of this has been recovered so far thankfully. While the collections agents were instrumental in recovering a large volume of our clients monies, in a number of instances the insurer supported them to manage recovery themselves so that they could maintain a strong working relationship with their valued buyers. Medium and some longer term payment plans were agreed in light of the impact on their sector. This collaborative approach has meant that many of these buyers will continue to trade with our client into the future should they make it through the next year which will be especially important with the twin challenges of continued restrictions and Brexit.
In addition to the collections service there have been claim payments made in excess of €35,000. So with less than €60,000 of the reported overdue debts yet to be recovered or assessed for claim this client has certainly seen that credit insurance was a good investment, it has actually prevented them from almost becoming insolvent themselves.
No matter the sector, whether your trade is domestic or export, credit insurance will give you the peace of mind to grow your business safely. With our expert service you will get value for your premium.
Contact us to find out how we can help you protect your business from insolvency or payment default.