As the dust settles over the economic turmoil of 2009, across the globe, many businesses are expecting – or at least hoping ? that 2010 will prove to be a turning point in their fortunes. GDP in most major markets is expected to improve following a year of weak sales, corporate layoffs, idle plant and scant investment. Productivity should follow suit as the wheels of production again begin to turn to restock depleted inventories.

Despite these expectations of a turnaround, everything is certainly not ‘gung ho’. Unlike the heady days of earlier years, when it seemed as if businesses could do little wrong ? and when they did, the economy was so strong that it was remarkably forgiving ? we aren’t on cruise control. Far from it. Despite the ‘green shoots’ of recovery, history shows us that, in 2010, as in previous recovery years, we will continue to see high unemployment and corporate failure rates. So, as the economic recovery gradually gains momentum, the watchword for companies – if they are to survive and plan for renewed growth – is ‘caution’.

Throughout the recession, limited, if any, access to bank financing and tighter restrictions on credit insurance confirmed that it was certainly not business as usual. A truth that soon became apparent to all those engaged in domestic and international trade was that past experience – of both markets and customers – could no longer be relied upon as an accurate indicator of the path that future trade would take. Seen in that context, the response of banks, in demanding to see more sturdy business plans from potential borrowers, and of credit insurers, in requiring the most recent financial information available before providing cover on their customers’ buyers, should be expected.

But, despite the often harsh new realities of the marketplace, the value of credit as a medium of successful trade is, if anything, greater than ever. Credit serves many purposes. It creates demand in a flagging market place; it gives suppliers the edge over competitors who offer less attractive terms; and, as buyers’ access to bank finance continues to be in short supply, it gives buyers breathing space to pay for the goods and services purchased from their suppliers.

So, while in tough economic conditions, suppliers’ initial reflex may be to withdraw credit facilities from their customers, this would be short sighted – and potentially damaging to hard earned business relationships.

Credit is vital if trade is to flourish. And provided that there is good reason to believe that payment will be received on time, offering credit should not adversely affect suppliers’ cash flow. But that means that credit must be accompanied by a heightened focus on best practice in credit management. Credit management – not credit control. They are very different. While credit control has negative connotations, credit management encourages continued sales on credit to trusted customers, and is instrumental in building and maintaining profitable business relationships. In the future it will require greater transparency – especially in terms of the latest financial information that can be provided by buyers ? who are, thankfully, beginning to understand that such transparency is essential if they are to keep their supply channels open.

And credit insurance should be central to any credit management strategy. By its very nature, credit insurance imposes a discipline on credit sales, ensuring that new customers are properly vetted and existing ones continue to be monitored for changes in payment behaviour that may signal financial problems. It makes available the recovery expertise that can address those problems before they escalate. It provides the market intelligence that helps in the suppliers’ decision making process. And, in the last resort, it is the safety net that protects the supplier’s bottom line when the unexpected happens.

So how do we summarise the outlook for 2010? Business as usual? Hardly – and certainly not while the aftershocks of 2009 continue to reverberate. But that’s no reason to be pessimistic.  While 2009 has been a salutary experience, it’s also brought to the surface exactly what is important to successful and profitable trade.

That’s transparency – transparency between all the parties involved: supplier, buyer, bank and credit insurer. That way, each can understand the risks and opportunities associated with each business relationship and act accordingly – and in a way that always seeks to maintain valuable relationships and avoid undesirable financial loss.

Simon Groves is a senior manager of corporate communications and marketing at Atradius Credit Insurance NV

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