Loxleys Print finds enhanced credit control discipline the key to company stability and growth
Loxleys Print Ltd
- Company: Loxleys Print, specialists in manufacturing greeting cards for major publishers such as Carte Blanche Greetings ("Me to You" and other ranges") and Paper Rose.
- Business challenge: How to strengthen Loxleys' existing credit control procedures, without restricting the company's potential for growth.
- Solution: Coface's flexible Open Trader policy, which provides complete credit insurance protection against insolvency and non-payment for domestic and international customers.
- Result: Loxleys benefits from the best credit information on new and existing customers, providing it with a stable basis on which to develop the company.
Established in 1854, Loxleys is a privately owned printing company, specialising in the production of greeting cards and associated products for the UK market. Based in Sheffield, South Yorkshire, the company employs over 80 people full-time and has a turnover of around £6 million.
Loxleys deals direct with major UK card publishing companies and its products can be found in high street retailers such as Clinton Cards. Credit agreements vary with smaller customers usually asked to pay in advance or within 30 days, while larger customers are offered 60-day terms.
The Business Challenge
While credit insurance had been a key element in Loxleys' credit management strategy since 1986 (when it first began to deal with Coface) the company had originally been using Coface's Top Trader policy, which covers a select number of customers against the risk of insolvency. However, according to Loxleys' Financial Director, Paul German, this placed the onus on Loxleys to determine how much protection was required and on which customers.
In practice, this meant that Loxleys was reluctant to accept new business or deal with start-ups due to the risk involved. In an industry where new designers are constantly establishing themselves, this inevitably restricted the company's opportunities for expanding into new markets.
At the same time, Paul revealed, Loxleys wanted to obtain increased levels of trade finance from its bank, in order to develop the business. It needed to satisfy the bank's demand for security by clearly demonstrating that its sales ledger was protected by a credible insurance provider.
The Coface Solution
Developed specifically for businesses looking for complete cover on all customers, Coface's flexible Open Trader policy provided Loxleys with increased protection against insolvency and non-payment of debts.
A comprehensive credit management service, Open Trader includes credit limit management, insurance and is fully inclusive of legal and pre-legal debt collection services, although Loxleys is not using this element of the solution.
The new policy inevitably led to a closer and more collaborative relationship between the policyholder, its broker, and the Coface underwriters. As potential new clients approach Loxleys, explained Paul German, the Coface team advise him of any serious credit risk and if necessary, work with the client and his team to find a way forward. From the client's perspective, moreover, dealing with an objective third party removes any rancour or personal feelings from the process.
Working with a credit specialist such as Coface has given Loxleys a number of clear advantages when it comes to developing its business in a controlled and sustainable way. Not only does it give the company's credit control department additional credibility when explaining credit decisions to the sales force; it also enables it to clearly demonstrate its financial stability to bankers; and of course, to accept new business with complete confidence.
"Open Trader enables us to take a more disciplined approach to credit management with new and existing customers and is an objective way of analysing a customer's credit risk. I don't want to be the sales prevention officer, so it's important that Coface take a flexible approach. If they were only saying 'yes' to blue-chip accounts, I would not have any credibility with the sales force, but when Coface say we can't deal with a customer, the sales force know the decision not to extend credit has been made in an objective way.
"We have no intention of changing from Coface because the responsiveness and flexibility delivered by its team is excellent. Even if we enquire about an unincorporated customer, we invariably receive a quick and sympathetic response."
- Paul German, Financial Director, Loxleys Print Ltd