By Rob Downey

When the going gets tough, the tough laugh, and paint the barn.

This was a lesson I learned during the last time we faced "…the worst recession since the depression." It was 1981, and I was a student hitchhiking home from graduate school. For obvious reasons, I wrote my poetry in those days under a pseudonym. (Click here to read the poem,Widewater West Virginia–1981.)

The point is: there is always something to be done. Below are eight items to try – all related to credit insurance policy administration or trade finance risks – now that the approaches, which always worked before, for a time, no longer do.

1. Renew your receivables insurance for a two-year term, if possible. Rates are rising. Renewal parameters may be a bit harsh, to be sure. Even so, lock them in before they get worse next year.

2. Move to online reporting with your accounts receivable (A/R) insurance, if you have not already done so. Online reporting saves time, reduces the chance of error, and provides better awareness of coverage limits and changes.

3. Train your sales staff to build risk-protection and finance costs into the price they put in offer sheets to customers. Most domestic customers these days expect to pay for the benefit of terms, and your charges will still represent a lower cost of funds to export obligors in all but a few foreign markets.

4. Reschedule insured debt if possible – with notice and approval of insurers – instead of filing a claim. When it works, you keep a customer and avoid worsened parameters at policy renewal.

5. Make your preferences clear during credit insurance policy renewal negotiations. On one hand, you may consider alarger deductible,or lower percentage of cover, or both, if you are facing a difficult or too-expensive renewal of your A/R insurance. Conversely, you may seek ahigher premium rateat renewal, if a proposed deductible increase - due to previous policy period claims activity – is set at an intolerable level.

6. Appeal claim denials; work with your broker and sit with insurers. If a claim is denied on grounds you believe are incorrect, ask your broker to guide you through an appeal. Be ready to remedy defects in the documentary record and to address specific findings of non-compliance. (Note ICBA blogger, Ron Doyle's bulletin: Steps to assist the claims process.)

7. Buy your most active customers and major suppliers a web cam (approximately $100) so you can speak with them "live" more frequently and more personally. This act will save time, save money, improve goodwill, and improve the quality of workday contact and information flow. As mentioned in a previous blog, this is part of taking more personal control of the credit capacity available to your suppliers.

8. Re-think protection arrangements on your trade risk portfolio entire. "Unified" coverage for most global companies often does not mean one provider. It may make sense to have domestic and export coverage in one policy or with one provider, but frequently it does not. The same applies to separate divisions within a single company providing much different products or services.Does one group have many small buyers, while another has exposure concentrated in five accounts?

What about Medium-term exposures?

Distressed obligors facing bankruptcy?

Important projects or investments in risky political environments?

Can a factor helpmanagesome portion of your accounts or take some of your risk on a non-recourse basis? Even your bank – in specific instances of large or difficult foreign credit exposures – may be able to act as the risk holder or as the funding source for your Buyer, using your Buyer’s local bank as intermediary.

These eight tips are not radical notions and not all of them may be available to you. Some will work but some may not, and you may already be aware of these concepts. My point is, as with the rural wit quoted at the beginning of this post: now is an excellent time to keep your sense of humour and still get something done. This just may be the most splendid time to "re-paint the barn", to send messages to your vendors, lenders, insurers and customers that you are still alive and thinking.

(Rob Downey is one of the founding partners of International Risk Consultants, Inc. (IRC) www.irc-group.com – a globally-integrated trade-finance and credit insurance specialty brokerage, which serves as the operating member of ICBA for Mexico, Brazil, India, China and the U.S.)