Buyers` Debt Management and Control in UAB Juodeliai

The management and control of buyers` debts is a necessity in all companies but some are unwilling to invest in it. Wood processing company UAB Juodeliai have been using their debt management instrument for almost a decade. The insurance of the buyers` debts helps the company to protect itself from the risk of loss caused by commercial and political events which cannot be controlled by the company.

For the selection of insurance company, UAB Juodeliai announces a tender each year where three largest international insurance companies submit their bids. Since 2010, the best terms and conditions have always been proposed by Swedish company Atradius which is always the winner of the tender; on July 1 of this year the insurance contract with this company has been extended again.

All sales of the company involving deferred payments are subject to credit insurance – even the sales of the most reliable, stable and long-term clients; this is company`s policy aiming at the elimination of the risk of loss related to the failure of clients to perform their obligations. UAB Juodeliai negotiates the contractual terms and conditions listed in the sales contracts individually with each client but the credit limit is set by Atradius.

Credit insurance was selected for the debt risk management of buyers as the safest instrument. Insurance company covers the unpaid debts of the buyers much faster than it would take if debt collection agency was used. As a result, planned cash flows are much less affected and this has a significant positive impact on business efficiency and success of the company.