When you request coverage on a customer, a critical step is to verify that your customer's name in any documentation (purchase orders and invoices) is the same as on your limit approval.

Why is it important?
Sometimes the company name on the sign outside your customer's office or on their website is not the legal name of the entity that owes you money. Ensuring that you have credit insurance with the legal entity that owes you money is critical when filing a claim.

The information you need to check is:

1. Company name and CVR number
2. Billing address
   

What should I do if my customer changes their information?
Email us at contact.dk@eulerhermes.com with the policy number and the customer's Euler ID and the new correct information.

Keep track of cover
Without a valid credit limit on an existing or new customer, if they fail to pay you, the debt will not be insured.

Here are the things you want to keep track of:

• Having a valid limit in place
  You should track reductions and cancellations, make sure you’ve asked for cover on a new customer or that you have the appropriate justification to use your limit.
  
• The level of cover versus your level of trade
  As the relationship with your customer evolves, the amount of sales may vary. As it progresses, you need to monitor cover and especially check if your credit limit is high enough to cover your outstandings (the amount of sales that you have made but that your customer hasn’t paid yet). You may decide to trade at a level higher than your approved limit, but your cover will be limited to that level.

If your customer fails to pay an invoice on time and you’ve been unsuccessful in collecting the payment, then you will need to place the debt with us for collection.

It’s important to remember that you will not be covered for any further goods or services you supply to this customer after this time.

It's very easy to start a collection case. Fill out this form and email it to claims-collections.dk@eulerhermes.com.

We will start to work on your collection case immediately. Our collection team will analyse your case and ensure we have all the information we need. If any information is missing, we will contact you via email and give you exact details of how to update or validate your documentation.

Ideally, your documents will include all relevant invoices and evidence of communication between you and your customer proving their commitment to pay for the goods or services you supplied. The more evidence you provide, the quicker we can process your case.

Euler Hermes understands that your relationship with your customers is crucial for the success of your business. If you decide to negotiate new payment terms, it is very important that you first contact us for approval if it changes your maximum extension period.

During a normal business relationship, you may encounter special payment situations with your customers. For example, an otherwise good customer may pay late, request an extension of the terms, ask to send a partial payment or wish to draw up a payment plan. Euler Hermes can very often work with you in these situations, however good communication with us is important.

Before accepting changes to payment terms, please note:

Euler Hermes will have to review and approve:

• Payment plans
• Extensions in relation to payment

No. When you take out a trade credit insurance policy with us you will be able to make use of our expert debt collection service.  It operates worldwide, covering all sizes of debt. Customers without a trade credit insurance policy can also make use of our debt collection services.

Collecting debts is a step by step process that keeps costs under control and can be monitored continually. We start with telephone calls and letters which make the request clear and use our name and reputation in the market. We can enter into negotiation with your customer if you wish us to do so. If none of those steps are successful, within an acceptable length of time, we can provide a legal service from judgment to enforcement action. We’ll discuss this with you before any action is taken.

It varies depending on the case and country. Economic, political and cultural reasons all affect customer behaviour. We aim to make an agreement with the debtor as quickly as possible. We avoid legal action as it can lead to long delays. When you work with our collection teams they will discuss with you what to expect and give you an idea of how long it could take.

Sometimes we follow all the usual steps (before legal action) without success. At that point we’ll discuss the situation with you and explain what options are available. If you decide to stop the collection activity at that point, we’ll close the case. Alternatively, you might want to take legal action. If it’s appropriate, we’ll let you know the chances of success, how long it could take and what it might cost so that you can decide whether to proceed.

Example 1: Debt equal to or lower than your limit

Let’s say you have an agreed credit limit with a customer of DKK 10,000 and you have an outstanding debt of DKK 10,000. We cover you up for the full debt. When you place your collection case with us, we will try to recover the whole debt: DKK 10,000.

At this stage, we will do a pre-assessment of the debt-covered percentage, which is the ratio between your cover and your total debt. For example, with a DKK 10,000 limit and a DKK 10,000 debt, your debt-covered percentage is 100%. If your debt is higher than your credit limit, then your debt-covered percentage reduces.

For collecting that DKK 10,000, we charge a fee that covers our work and any legal costs. In this example, let's say no legal action is required so the fee is just the commission fee of 10% or DKK 1,000, and assume your policy indemnity is 90%.

The indemnification of the costs applies as follows:
Fee (legal and commission) x Debt covered % x Policy indemnity % = Euler Hermes indemnification.

We will then indemnify you:
DKK 10,000 x 100% debt coverage x 90% policy indemnity = DKK 9,000.

In the end, the cost is reduced and instead of DKK 1,000, you would only pay DKK 100 + full VAT for the recovery of the DKK 10,000 debt (a cost of 1% of the amount collected).

If your terms and conditions with your customer allow you to recover collection costs, we would try to recover this amount as well and therefore you would have recovered the debt at no cost.

Example 2: Debt higher than your limit (overtrading)

Let’s say now you have an agreed credit limit with a customer of DKK 10,000 and you have an outstanding debt of DKK 12,000, higher than your limit. We cover you up to DKK 10,000 of the debt but will try to recover the whole debt: DKK 12,000.

As in the previous example, we’ll charge a fee of 10% (DKK 1,200) and let’s assume your Policy indemnity is 90%. Your debt-covered percentage will be DKK 10,000/DKK 12,000 = 83%.

Following the same formula as in the first example, we will then indemnify you:
DKK 1,200 x 83% debt coverage x 90% policy indemnity = DKK 896.40.

In the end, the cost is reduced and instead of DKK 1,200, you would only pay DKK 303.60 + full VAT for the recovery of the DKK 12,000 debt (a cost of 2.5% of the amount collected).

Our tariffs vary depending on different circumstances, such as the country your customer operates in. These are agreed at the start of your Policy and outlined in your Policy documentation. You find the tariffs here.

Please note we cannot contribute to your internal administrative costs and expenses.

Yes. We are committed to protecting your customer portfolio.  As a third party with a global reputation, local knowledge and deep insight into customer finances, we can often negotiate more effectively to make sure you receive payments when they are due.

Your guarantee of a global service is our network of offices in 50 countries, including all the major economies in the world. We conduct our cases locally and our local presence on the ground is backed by close partnerships with lawyers and collection agents in many territories. We cover all countries.

Yes. Around the world we employ more than 600 dedicated commercial debt collectors. We constantly invest in their training and the development of their skills.  The team is closely coordinated, working with systems and processes that define best practice in debt collection.
Our collectors don’t just work for us, they work for you.  They are ambassadors for your organisation when they focus on collecting the payments owed to you.