Allianz Trade releases B2B guide for trade receivable risk management
Allianz Trade has published a guide for B2B companies on monitoring trade receivables to mitigate non-payment risks and maintain cash flow stability.
Trade receivables represent a significant portion of assets for many B2B companies, yet they inherently carry risks such as late payments and customer insolvency. Allianz Trade’s latest guidance emphasizes that proactive management is essential for firms to maintain liquidity and minimize potential credit losses.
The guide highlights critical key performance indicators, including Days Sales Outstanding (DSO), Average Days Delinquent (ADD), and the Collection Effectiveness Index (CEI). By systematically tracking these metrics, businesses can gain visibility into their receivables health and identify warning signs before they impact the bottom line.
Beyond internal monitoring, the report suggests that formalizing credit policies and diversifying customer bases are standard measures to reduce concentration risk. For companies seeking to hedge against unpredictable defaults, trade credit insurance is identified as a strategic tool to secure cash flow.