Learning about the country’s business culture is wise as well. Is corruption the norm? Is the economy poor or vigorous? What are the customs regulations? Should you be working with a local representative or a distributor?

Henrie also cautions exporters to examine the judicial systems in potential markets because their legal networks may not be as robust as North America’s and may lack the infrastructure to help exporters collect what’s owed to them.

Even in the United States, the largest importer of Canadian products and services, there are some states that are considered debtor-friendly, he warns. This makes it easier for the buyer to default on payment, perhaps leaving the exporter with little recourse.

“The bulk of Canadian claims actually come from the United States – 50 to 60 per cent of the claims we receive each year. Another 20 to 25 per cent of claims are received for Canada, and the rest are pretty much equally distributed over the rest of the world.”

Know thy customer

Kevan McCullum, Vice-President of United Mercantile Agencies, an international collection agency based in the United States that deals strictly in commercial receivables, agrees that up-front research is key to managing future problems.

“Use all available means to keep the lines of communication open,” he says. “There’s no 100-per-cent guarantee, but when payment can’t be collected, the situation I see most often is that, for whatever reason, the buyer has just quit talking.”

Some buyers – even Fortune 500 companies, McCullum discloses – never pay on time, simply because their accounts payable processes differ from their exporters’ terms. Some companies have cash-flow difficulties that prevent them from paying on time; others may have an issue with the product or service received. It’s essential for you to know your customer and what problems may arise, so you can prevent them or at least facilitate a speedy resolution.

Credit – a question of trust?

“Getting a credit check makes good business sense,” advises Suzanne Morris, EDC’s Vice-President of Small Business Services.* “Make sure you are aware of your buyer’s financial condition and payment history; have your accounts receivable insured against non-payment; and deal only with well-organized companies – especially in the beginning.”

EDC has a number of easy-to-use and inexpensive online products that exporters can use to check out their buyer and to insure their transactions. After receiving a simple electronic form completed by a company, EDC can supply information about the potential buyer’s credit history and offer an opinion on whether EDC would be willing to insure the deal, based on the information provided.

“I can’t stress enough how helpful EDC has been to us,” says Dr. Mirek Macecek, President of Techno Scientific Inc., a successful high-technology firm, founded in 1981, that builds sophisticated, customized testing systems for companies and organizations such as steel mills and aerospace firms. Techno Scientific’s annual sales range from $1 to $5 million, and its products and systems are sold in North America, throughout Europe, Pacific Rim countries, Asia and Australia.

“Our EDC contact, Chris Despond, has helped us get background checks and learn and assess the history payment of the companies we wanted to deal with overseas. His expertise made all the difference in the world, ensuring we were not left at the buyer’s mercy.”

Macecek and others in the know also counsel the practice of excellent marketing and financing techniques. Be savvy about extending credit, making absolutely certain that the terms and conditions of payment are explicit and comprehensive. If possible, consider offering promotions or discounts dependent on early payment. Then, whatever your product or service and however good you are at producing it, having a good accounts receivable management process will make all the difference to getting paid in full, on time.

When all else fails McCullum says that credit extension is not an exact science. “But with every month that passes, your chances of getting paid diminish,” he emphasizes. According to the Commercial Law League of America, the chances of collecting a debt after one year are just under 25 per cent; after two years, it drops to 10 per cent.

“Understand that when payment is in default, it means someone else is getting paid ahead of you,” says Henrie. To ensure this doesn’t happen, Henrie, McCullum and Macecek all advise exporters to develop a regular, professional relationship with the buyer – specifically, the person who’ll be cutting the cheque. Then contact that person before the due date to gauge whether there might be any problems. If that person can be engaged on the exporter’s behalf, the matter can sometimes be resolved with minimal delay.

“Document your attempts to get payment,” says McCullum. “I understand many exporters only want to contact a commercial collection agency as a last resort, but if it does become necessary, this evidence will be invaluable.”

EDC is here to help you get your money faster

You have insurance for a reason: to provide financial relief when all else fails. This is where EDC’s Claims and Recoveries team comes into play. They have an enviable record of turning around claims within 30 days or less, far surpassing the industry norm.

This record is about to get even better thanks to the implementation of a new system created by Toronto-based Terida Systems, a software developer that supports legal, medical, corporate and government initiatives. Terida is well-known for its work in supporting lawyers on class action suits such as the Walkerton Ontario water contamination case.

“Our specialty is developing web-based systems that provide extensive and integrated communications in a fully secure manner,” says President David Gillman. EDC’s new system will deliver the technology required to track all information surrounding debt-recovery cases in one web-browser database.

“Previously, everything was done manually,” explains Paul McKenna, a Business Analyst with EDC’s Insurance and Loans Services.

“The new system is expected to provide EDC with cost and time efficiencies, allowing us to maximize the expertise we can provide with the same level of resources. When EDC can contain its costs, savings can be passed back to exporting companies making claims. It’s a direct benefit to customers, who will receive a greater share of the money recovered.”

* Suzanne Morris left EDC in 2005 and has been replaced by Carl Marcotte, VP Small Business Development.