Outstanding receivables are usually the largest or second largest item on a trading company's balance sheet. Bad debt losses can affect liquidity and profits. Even worse, they can spell a company's mean financial ruin. Late payments or non-payments therefore pose a considerable threat to future liquidity of that company if no measures are taken. By insuring these receivables against non-payment or late payments, the company ensures its cash flow. Companies that have their business financed by a bank can assign their Receivables Insurance policy to their bank as a security.