How to build a strong credit management strategy for export success

Selling into new markets can help your business grow, but it can also change how and when you get paid. Working with new buyers and unfamiliar rules often puts pressure on exporters to offer longer payment terms. Together, these changes can make it harder to predict cash flow and spot potential problems early.

As export sales grow, even one unpaid invoice can put pressure on working capital. A clear credit management strategy helps you support growth without taking on more risk than your business can handle.

Credit management is how you decide who to sell to, what payment terms to offer and what to do if a payment is late.

For exporters, this usually includes:

• Setting clear rules for offering and extending credit
• Checking buyer information before and during a relationship
• Tracking invoices and following up early
• Using tools that help protect your business if a customer doesn’t pay

Strong credit management doesn’t slow growth. It helps you expand into new international markets with more confidence because you understand the risks and plan for them.

For many exporters, credit management involves both sales and finance teams, which makes having clear rules and shared understanding especially important.

How credit management should change in new markets

Selling into new markets adds uncertainty because it changes the balance between growth and payment risk. It often means taking a more deliberate approach to managing credit.

New buyers mean less payment history: When you sell to customers outside Canada, you may have limited information about their financial situation. A buyer, or importer who looks reliable on paper can still run into cash flow problems.

Longer payment terms increase exposure: Offering 30-, 60- or 90-day terms can help you stay competitive, but it also means you wait longer to get paid. The longer the wait, the greater the chance of delay, or non‑payment. Learn more about the risks and advantages of export payment terms.

Distance makes problems harder to fix: If an international customer doesn’t pay, collecting money across borders can take more time and effort. Different laws, languages and business practices add complexity.

Together, these shifts are often a sign that your existing credit practices need to be reviewed and updated.

These six steps aren’t a one-and-done process. They work best as a cycle, especially as your exports grow.

Step 1: Set clear rules for offering credit

Decide what information you need before selling on credit. This might include basic financial details, references, or trade history. Make sure sales and finance teams follow the same rules, as this helps prevent last-minute decisions that can increase risk, or strain internal relationships. You may also consider input from financial institutions when setting credit rules, since lenders often have insight into how credit decisions affect cash flow and financing.

Step 2: Match payment terms to the level of risk

Not every buyer needs the same terms. New customers, or larger orders may call for shorter terms, or extra protection, especially in unfamiliar markets.

Step 3: Check buyer information regularly

A buyer’s situation can change quickly, even if they’ve paid on time before.

Reviewing buyer information regularly helps you spot early warning signs such as sudden changes in order size, requests to extend payment terms, or difficulty reaching a contact person.

Not every change is a problem, but you should pay attention to patterns of behaviour.

Step 4: Track invoices and follow up early

Late payments often start small. A partial payment instead of the full amount, or slower responses to reminders can signal a bigger issue.

Clear processes for tracking invoices and following up early can prevent minor delays from becoming serious cash flow issues.

Step 5: Use risk management tools to reduce the impact of non-payment

Some risks can’t be managed through process alone. Tools, like credit insurance, can help protect your business if a customer can’t pay, reducing impact on your cash flow.

Step 6: Review and adjust as your business grows

Your credit management approach should change as your business grows. Reviews are especially important when you enter a new market, start selling to larger customers, offer longer payment terms, or rely on export sales for a bigger share of revenue.

Regular check-ins help ensure your credit practices still support growth without putting pressure on cash flow. As your exports evolve, revisiting these steps can help ensure your credit practices keep pace with your business.

Coulson Aviation, an aerial firefighting company, wanted to expand into the Asia-Pacific region, but was concerned about the challenges that come with entering a new market. Wayne Coulson, company president, knew other service providers in the region had previously struggled to collect payments.

To manage this risk, Coulson Aviation used EDC’s Portfolio Credit Insurance to protect its international accounts receivable. The coverage helped reduce the risk of non-payment due to customer default, bankruptcy, or contract termination. With credit insurance in place, the company was more confident pursuing contracts in the region.

Good credit management focuses on prevention, while also preparing for situations you can’t control.

Credit insurance can help when:

• A customer becomes insolvent
• Payment is delayed for an extended period
• A single unpaid invoice would affect your cash flow

Many exporters use credit insurance as their business grows, especially when entering new markets, or offering longer payment terms.

Next steps: Learn more and find support

As your export business grows, so does exposure to payment risk.

If you want to explore how credit insurance can support your credit management approach, visit EDC’s credit insurance solutions page. You’ll find information on coverage options and access to practical resources, including our guide on protecting global sales from credit risk.