Escrow helps add discipline, structure and control to your credit management process. Here are some of the key benefits of having escrow in place:
· Exporting: your export customer’s financial strength may be difficult to ascertain and fully understand, making credit assessment difficult whereas an Escrow ensures the funds will be available when you deliver your goods or service.
· Working Capital: you may use an overdraft to buy in goods before supplying them to your customers. If the customer doesn’t pay, the lost revenue may affect your future working capital and your ability to pay your suppliers.Use Escrow for prompt payment.
· Growth: often means accepting more risk by offering higher credit limits to customers whose financial strength you may not fully understand.Escrow eliminates the risk.
· Cash On Delivery: insist on upfront payment and you may lose the customer who isn’t prepared to take the risk. Escrow prevents risk for your supplier and as well as to your own business.
· Credit Reports: while you can rely on these from the likes of D&B, this type of information is often based on out-of-date financial information. Don’t take the risk.
· Risk Assessment: assessing a customer’s balance sheet and profit & loss account to make a credit limit decision is a specialist skill. Escrow means you don’t have to take the risk.