Minimizing the Cost of Customer Bankruptcies in Material Handling
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Protect your business from unexpected customer shutdowns.
Dewitt, NY: During the recent economic downturn, the number of business bankruptcies tripled. Some of those businesses may have been the customers of material handling distributors. How can a distributor minimize that impact? The Second Quarter 2010 issue of The MHEDA Journal (http://www.TheMhedaJournal.org), the leading online magazine for the forklift, conveyor, storage & handling, and general material handling equipment industries, has the answer. Steven Gan, president of Stellar Risk Management, suggests ways material handling distributors can prepare for such an occurrence.
"What happens if your receivables don't get paid? Can your company weather this loss? The problem may not lie with your customer, who you may have done business with for many years, but with your customer's customer, about whom you know very little. With all the bankruptcies related to industries such as auto, housing, manufacturing and construction, this could seriously impact cash flow, bringing your own company to a complete halt," Gan writes. To remedy this, Gan outlines multiple types of credit and accounts receivable insurance for material handling distributors to consider.
However, credit insurance is not for everyone. As Gan writes, "Although credit insurance is a safety net that protects a company's receivables, not every customer can be covered under a policy. During the underwriting process, negative information about a company may come to light. Depending on the degree, some may not receive coverage."
To learn more, read "Minimizing the Cost of Customer Bankruptcies " in the Spring 2010 issue of The MHEDA Journal Online at www.TheMhedaJournal.org. The print magazine is mailed out to subscribers in January, April, July and October. The most recent issue was published on April 15.
For more information, contact Chris Powers, editor of The MHEDA Journal, (315) 445-2347, e-mail: chris@datakey.org.
