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An Efficient Credit Management Process Accelerates Business Growth

An efficient credit management process accelerates business growth

In the competitive metal supply industry, the ability to make quick and accurate credit decisions can mean the difference between deals won and deals lost. Speed to market challenges within Hadco’s internal credit processes were becoming a competitive disadvantage until it found the support it needed with Allianz Trade.

Industry:

Metals

Challenge:

Comprehensive credit function support

Policy Benefit:

Safer sales growth

Challenge

Bensalem, Pa.-based Hadco Metal Trading Company was missing out on opportunities for growth because of its inefficient credit management process. Credit decisions were in the hands of already busy executives who took too long to evaluate customers’ creditworthiness and often had to make credit decisions based on inaccurate information and assumptions that left potential revenue on the table. “We were not able to make quality decisions, especially under pressure,” said Ori Ben-Amotz. “We were overly conservative and held back limits.”

In a competitive metal supply market, a suboptimal credit approval process can make the difference between a deal won and a deal lost. Hadco’s internal credit processes were becoming a drag on the company’s competitiveness. “This is a fast-paced business, and companies want an answer quickly,” said Ben-Amotz. “If you wait days or weeks, a deal can be gone.”

Solution

The key challenge was to create a credit management process that would support Hadco’s strategic growth. This process would need to efficiently handle requests from a diverse customer base throughout the U.S. and South Korea requiring at least ten credit decisions per day.

By relying on the robust credit support resources that come with Allianz Trade credit insurance, Hadco was finally able to keep up with competitors by offering open terms to buyers, many for the first time. Rather than determining a customer’s creditworthiness using information from one of the large credit ratings agencies, Hadco can now get a more accurate credit assessment using resources provided by Allianz Trade. “With Allianz Trade, we get comprehensive information and analysis, allowing us to know where to strategically grow our business,” said Ben-Amotz. “With credit insurance, we don’t have to ask for cash up front or payment on delivery, which makes us much more competitive in a very competitive business.”

Results

Since it purchased its Allianz Trade credit insurance policy, Hadco has increased sales from $85 million to $100 million through a mix of domestic and international growth. Ben-Amotz attributes a large percentage of this growth to the company’s partnership with Allianz Trade, which has empowered the company to provide more credit to its mid-tier customers. This is the tool we needed to take more market share from our competitors,” he said. “Credit insurance has transformed the way we do business and make decisions.”

Overall, the value Hadco gets from credit insurance goes far beyond the coverage provided. “When you weigh the cost against all the benefits it brings – the peace of mind that we’re protected against a big loss, the efficiency it bring s to our credit department, the time I now have back to be proactive and focus on growth, the expansion of limits – the equation adds up,” said Ben-Amotz. “I am proud of my decision.”management. Why would I want to take risk? I like to sleep at night.”

Download Hadco's Case Study!
An Efficient Credit Management Process Accelerates Business Growth