Here are our top tips to make sure you get paid when exporting
1. You need effective credit management
Winning business from potential export customers is a challenge in itself, but do not let this distract you from the fundamental task of credit management. At the end of the day, getting paid has to be regarded as the most important aspect of exporting. Make sure that you equip your team with the tools and the necessary skills to manage your export strategy. Plan ahead by using organisations like the Chartered Institute of Credit Management (CICM) who can provide training and helpful resources that relate to exporting.
2. Submit accurate paperwork
Probably one of the most challenging aspects of export sales is making sure your paperwork is correct. Make sure you make best use of the myriad of resources available to help you from accredited chambers of commerce who are based throughout the UK. As part of the paperwork process, when dealing with overseas customers, make sure you identify and liaise with the right contacts.
3. Negotiating will be key
Exporting tends to be more demanding financially than selling in the UK, so be prepared to negotiate. This is because consignments are usually larger, lead times are longer and the risks are more difficult to control. You may also need to take into account the problems of handling payments in foreign currencies. So negotiating the terms of an export sale is a matter of balancing the risks and the costs to you and your customer. It is therefore important that your overseas customer when accepting your terms and conditions, should formally acknowledge receipt of written orders.
4. Set sensible credit limits
Of course you would prefer your goods & services to be paid for up front, but that is somewhat unrealistic for any competitive business. Offering customer credit is a likely route you will take, however this comes with risks to your business. It is likely that export orders will be larger than domestic deliveries, due to economies of scale, so outstanding balances will often be higher as delivery times lengthen. Therefore setting reasonable credit limits will help limit the financial risk, reduce the costs of providing credit and give you leverage when dealing with the customer.
5. Make sure you get credit references
Where possible use credit reference agencies, however bear in mind the information available may not be as comprehensive as that which can be found about your home market. This could mean the opportunity of making informed decisions regarding credit terms will be more challenging. Make sure you establish a clear picture of the financial standing of any potential international partners.
6. Be prepared
Should the customer not pay to terms. It is important to acknowledge that pursuing international payments in a foreign language and unfamiliar legal process will bring its own challenges. Whilst the UK remains a part of the EU, legislation is in place to aid the recovery of outstanding international payments. However for countries outside of the EU it would be advisable to consider using a debt-collection agency with global offices or agents - legal action would likely be protracted and costly.
7. Protect your company
8. Get advice from the experts!
Perhaps our most important piece of advice - make sure you ask for help as this will prove invaluable at all stages of the export process. Try to speak to organisations or businesses who have experience in successful global trading, who can give you a realistic perspective about what is achievable and how best to approach doing business overseas.
Guidance as well as online information about exporting is widespread, so it is vital that you make the most of the knowledge that is available from experts. This will be especially important in the light of Brexit and the impact this has had on both European and global trading markets for UK exporters.
– Use Kompass Business Data to research and find contacts in your target markets.
– Your Local Chamber of Commerce can help with export documentation and finance.
– UK Export Finance provides trade finance and insurance for exporting.
– B2BCentral works with partners to bring the benefits of B2B eCommerce to British SMEs.
– The Institute of Export gives advice, guidance, offers courses and qualifications.
– Find new export markets with a personalised Market Ranking Report from Kompass.
– Build your brand & global online presence with Kompass Digital Marketing solutions.
At Kompass we have more than 60 years experience, helping businesses grow – providing our customers with business data to help improve the results of their sales and marketing activity and driving relevant enquiries through globally optimised company profiles from more than 7.5M Kompass users. Contact us to find out more about how we can help you as you plan your export strategy.
Our Kompass Export Zone builds on our business information expertise, by giving access to straightforward guidance on some of the key factors to consider when exporting, research advice and country specific market information. For more advice on getting started on your export journey, see our. guide to planning your export strategy.
Disclaimer: Please note that this blog only contains general information and insights about legal matters. The information is not advice, and should not be treated as such. Kompass.com