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How CMA Group Members Helped Conquer Hurdles Associated With Payment Portals, by Patrick Spargur

Over the years, I have sat in on numerous Industry Credit Group meetings, each with a unique membership structure, and almost all have the same challenges. Recently, during one of the meetings I attended, the members communicated that they were having a harder time collecting their money since their customers recently introduced a new “payment […]

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Patrick Spargur

In my opinion, the credit management position is often overlooked and undervalued (and since I was a credit manager in the past, I speak from experience). After thinking about the many areas that a credit manager is involved with on a daily basis, I believe a good credit manager can directly impact the company’s bottom […]

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With the recent rise in bankruptcies, it is more important than ever before to have a handle on business to business (B2B) risk management. More and more fraudulent companies are emerging, as business lines are being blurred from start-up manufacturers operating from a garage, e-commerce “e-tailers” businesses that may or may not be legitimate. Because […]

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Finding companies that would fit in your industry credit group is not a difficult task. There are trade publications, mailing lists, associations and websites where you can input a company name and receive a list of that company’s competitors. The challenge is convincing an owner who has never been involved in a group to allow his credit manager to […]

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IMG_7974ef

Greetings everyone! As you probably know by now, I am a huge proponent of education. I feel that every little nugget that I take away helps me to be a better credit professional and add to my skill set. I’ve achieved the CCE designation, and I try to attend every CMA or NACM event that […]

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Yesterday I mentioned that I’d be listing several technologies I use that make my job easier. These are all things that I don’t have to call the I.T. department to install for me. These tech tools are easy to learn, easy to use, super helpful in the credit and collection department, make you look good, […]

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Why is it that credit, especially commercial credit, always seems to get the short end of the stick when it comes to resources? Why does it seem just the opposite for sales and marketing? Why do they always get the newest equipment, the coolest gadgets, the fancy business cards, even the latest version of Microsoft […]

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Define the Project Purpose and Scope? It is Not all about the Technology Any software or automation improvement addresses defined business objectives that impact multiple areas within the company. In order to pull off these changes effectively all stakeholders affected should be aware of and involved in the coming changes. Depending on the project and […]

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Now that we have all made our “New Years resolutions,” make sure you don’t drop the ball on your professional goals. Maybe you would like to improve your own personal skill set in your organization. Or perhaps you want your team to get up-to-date with the latest credit training / information in the market place. […]

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To some, January 1st is like the first day of school. Everything starts out fresh and clean (even though I know many of your fiscal years start at different times of the year). For those group members who attend and contribute regularly, the beginning of the year is just a continuation of what you have […]

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Michael Fenner, CMA Chairman of the Board of Directors

I hope everyone enjoyed their time away from the daily grind and that you were able to be with your family this Thanksgiving season. As I write this blog, I was thinking that we all like to give around the holidays, to our families, friends, the community etc. In 2007, Credit Management Association awarded me […]

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There’s a lot that’s bundled in the $99 a month Industry Credit Group dues that group members pay. But, for sake of argument, let’s pretend for a moment that CMA unbundled those items and that you had to pay for each of those benefits separately. Many service providers, including CMA, have weighed the advantages of an […]

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Note: this is one in a series of international blogs to help credit managers learn how to assess risk in foreign countries and expand their potential customer base. As a consultant, NaviTrade is approached by companies on a regular basis asking for our assistance in developing and implementing financing programs for their international business. Sometimes […]

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Buddy Baker

Note: this is one in a series of international blogs to help credit managers learn how to assess risk in foreign countries and expand their potential customer base. Most CMA members don’t know me. I don’t make it to many CMA activities because I live in Chicago. But about a year ago, I joined CMA […]

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david harlow

Note: this is one in a series of international blogs to help credit managers learn how to assess risk in foreign countries and expand their potential customer base. A Foreign-Trade Zone is a secure, access-restricted, Customs & Border Protection privileged area in or near a U.S. port of entry where merchandise both foreign and domestic […]

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Wow…it’s hard to believe the holidays are just around the corner. We all know this time of the year we need to be more vigilant in regard to protecting our assets. I wanted to take a few minutes and list some bullet points to think about so you can share with your teams. I don’t […]

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How can you play and get paid in the global marketplace? Over the last two years, CMA has been exploring how member companies can grow export sales using a variety of credit and trade finance resources to mitigate the risk of selling into other countries. Today, I am attending Discover Global Markets, a two-day export […]

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This is part 2 of a 2-part series on Order to Cash functions. Part 1 of the series can be seen here. Part 2  Outsourcing is not easy. It requires planning and tight partnering between the provider and the client. To be successful critical challenges must be overcome. All the processes related to the outsourced functions […]

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This is part 1 of a 2-part series on this topic. Read part 2 here. Part 1: Seven Advantages to Consider Overview: Many companies consider outsourcing all or part of the order-to-cash process as a cost-effective alternative to retaining internal staff and infrastructure improvements. This is not a decision to be taken lightly. It requires a […]

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All too often our members tell us that they want to take advantage of benefits offered by CMA, but they are not in the budget. For companies on a calendar fiscal year, here’s your opportunity to begin thinking about those budgetworthy benefits for 2016. Even if your next fiscal year extends well into 2016, it’s […]

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— Expanded Two-Day Education Summit will be held March 24-25, 2016 in Newport Beach– On the heels of its successful inaugural CreditScape Fall Summit in Las Vegas, Credit Management Association (CMA) has announced plans for an expanded Annual Meeting, which will include two days of focused credit management best practices training and workshops to help […]

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Submitting your company’s full A/R has been talked about quite a bit this summer. There is a reason for that…it’s important. I wanted to take a minute to point out the value and personally ask for your support in this request. You know, the more companies that contribute, the more people that will benefit. If you […]

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Negotiation is not a contest to see who can prevail. It is the “art” of getting to the point where two parties can agree on critical concerns. It encompasses employing core negotiation principles, the use of applicable strategies addressing the situation, focus on specific objectives, having a fallback position and, if all else fails, knowing […]

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The Wall Street Journal reports that credit card use in the B2B space continues to increase as a preferred payment channel for customers. Suppliers accepting cards in the B2B space commonly receive payment through card not present forms, whether through payment portal, email, fax or over the phone. For those suppliers that accept cards in […]

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With the NFL season officially underway, let’s take a moment to explore what Accounts Receivable departments can learn from coaches, especially when it comes to the season’s biggest game changer: analytics. As a credit and collections professional, take a look at the metrics you’re currently tracking. Throughout my years as a consultative resource for AR […]

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Recently, one of my Industry Credit Groups experienced 3 bankruptcies in less than 48 hours. One of these was an East Coast account that only 2 members were selling with minimal exposure so their losses were small. The other 2 were long-established accounts. Since I always preach that the 1st alert posted should never be […]

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As August winds down and your teams are returning from their summer vacations hopefully, things are returning back to normal. This may now give you the opportunity to review the services you currently use in your credit departments today. As our vehicles need tune-ups so do our credit departments from time to time. As an […]

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Michael Dennis

Creditors are frequently asked to provide credit references. Doing so correctly protects customer as well as the creditor. The following are some do’s and don’ts guidelines for the exchange of credit information: Don’t share anything except factual information [data you can prove is correct] Never ever discuss your future intentions, and don’t ask about the […]

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In the upcoming meeting in September in Las Vegas, I plan to explore why, when and how attendees are using social security numbers they request on their credit applications. My assumption is they use Social Security Numbers (SSNs) to obtain consumer credit reports which become part of the decision process about extending credit B2B to […]

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Penalties for violations of applicable federal or state antitrust laws can include fines, imprisonment, and liability for up to triple damages. How do antitrust laws affect day-to-day credit decision making and business activities? To what extent is pricing and payment terms subject to U.S. antitrust laws? Is it a violation of one or more antitrust […]

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Let’s assume you have received and reviewed and rejected a request for open account terms from an applicant company. What would you do if that applicant called and demanded to know the specific reason for your decision? Would you: Ignore the request, or Might you offer a response such as this: “Your company does not […]

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Some of you remember the great Jimmy Stewart movie, “It’s a Wonderful Life,” in which he envisions what life would have been like if he wasn’t born and its effect on his loved ones. At the conclusion, he is thrilled that it was only a dream and realized how good he actually had it. Consider […]

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In business-to-business credit granting, can the credit department withdraw or reduce open account terms at any time for any reason or for no reason? I think most people would say ‘Yes’. In my opinion, the answer is ‘Maybe’. For example: You cannot reduce or withdraw open account terms if the decision to do so is […]

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Debt collections fall broadly into two categories: Consumer collections, and Commercial collections. Consumer collections involve collection activities between a business and a consumer. Consumer collections are highly regulated. These laws are intended to protect consumers from overly aggressive or deceptive practices used against inexperienced and unsophisticated consumers. Commercial collection deals with debts owed by one […]

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As a 25-year veteran of the Credit and Collections industry and now with a primary focus in third-party collections, one of the most frequent discussions I have recently had with both collection industry peers, clients and prospects is what is the appropriate third-party collection placement strategy for a B2B company?  What constitutes serious delinquency? How long […]

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As we are all busy at our desks this summer with increased sales, dealing with coverage issues due to family summer vacations, etc., let’s take a minute to think about where we are all at with our current positions. Don’t we all want to stay up-to-date with the latest best practices in collections? Or maybe […]

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Customers in the B2B space are increasingly using credit cards to pay supplier invoices. The upside for the cardholder and paying customer is the 30 extra days to pay the cardholder statement that includes the supplier’s invoice. Cards also reduce paperwork and allow the customer to eliminate the time and cost of processing A/P checks. […]

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What should you do when you receive a check from a customer for an amount less than your total claim, but the check is marked with a “payment in full” or similar restrictive notation? Should you return the check to the debtor? Or can you simply cross out the “payment in full” language, deposit the […]

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When someone signs a contract to do business with your company, you allow them to do so with the expectation that they will pay you. In the U.S., there are laws that help protect your assets to ensure that the contract is enforceable, but what happens when you’re dealing with foreign nations? Are there resources […]

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Traditionally, debt collection involved little more than picking up the phone and convincing the debtor why they need to pay for the products/services sooner rather than later. Today, credit and collection professionals are being asked to adopt more sophisticated techniques. One of the newer techniques utilizes predictive analytics to create collection management strategies. Predictive analytics […]

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In my 20+ year career as a collector, I’ve learned that there are psychological advantages you have collecting your past dues that can separate you from the hundreds of other collectors trying to collect money from a delinquent account. From experience, I’ve developed a six-step process to improve my own collection techniques that does not […]

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Can anyone sign a contract? Most people agree the answer to this question is No. For example, most people acknowledge that a Minor [someone under 18] cannot sign a valid, enforceable contract. So… who can sign a valid, enforceable contract on behalf of a customer? More specifically, who can sign a valid credit application on […]

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At CMA, we are so excited about the CreditScape program we’ve got planned for you, we wanted to give everyone a sneak peak at what you’ll be talking about. All next week, CMA will publish a series of briefs from thought leaders who will be featured at the Summit — Chris Rios, Bart Frankel, Scott […]

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by Matt Fluegge, Vantiv You may have heard there’s a change coming to the way many businesses accept card payments. The U.S. is in the process of transitioning away from the magnetic stripe cards we’re all familiar with, and moving toward installing small microchips into the cards – also known as chip-and-sign. If you’ve already upgraded […]

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‘Collections,’ ‘collectors,’ ‘collection agencies,’ ‘collection attorneys’: words that evoke strong emotions, sometimes even terror, in the hearts of uninformed debtors. Robocalls, automatic dialers, dialing for money, calling centers, SMS, texting, e-mailing, invoicing, phone calls, and personal visits—some of the avenues that companies pursue to collect their precious asset known as accounts receivable. When we look […]

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By Marcel Wiedenbrugge It must have been about 13 years ago that I was spending a long weekend with my scuba diving buddies. I remember one evening, I had a discussion about the stupidity of many people working in customer service and how they annoyed me. “Every time I explain something to them, it seems […]

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Larry Convoy, lead group facilitator

To change successful formulas or brands takes courage. Sometimes it works (Datsun becoming Nissan), sometimes it doesn’t (remember the “New Coca Cola”?). But in this current environment, where you can close or lose a multi-million dollar deal by touching an app on your phone, being passive will leave you behind the crowd. For that reason, […]

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Michael C. Dennis

Many companies are interested in concentrating on core competencies and looking for ways to outsource so-called “non-core functions” including certain credit and collection functions. The simple truth is that any function or department or position is a candidate for outsourcing if the third-party service provider can convince the company that: 1. The work can be […]

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Michael C. Dennis

In a recent post on LinkedIn, a question was asked about If, When and Why B2B creditors such as CMA members request or require Social Security Numbers from credit applicants. (https://www.linkedin.com/grp/post/2412088-6014193760244690945?trk=groups-post-b-title) At the time, I posted two responses in which I posed questions for CMA members in connection with the laws governing the use and […]

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Michael Fenner, CMA Chairman of the Board of Directors

Are you looking for a way to be more successful and become more knowledgeable? Have you ever thought about making yourself more valuable at your current job or expand your career opportunities? Would you like to have a level of respect among your colleagues? How about being the best you can be at your current […]

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Michael C. Dennis

A bad debt can ruin a good day. A bad debt is any debt that cannot be collected. Bad debt write-offs are a cost of doing business on open account terms. No matter how carefully the credit department reviews existing customers and new applicants, such losses are inevitable. Bad debt losses are a cost of […]

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Michael C. Dennis

Even the most experienced credit professional can become a better risk manager. From the novice to the professional, learning new skills is crucial to ensuring that the risks of late payment or customer bankruptcy are mitigated. These simple tips are worth considering: Expect to Find Something Negative in each Customer Financial Statement You See Perform […]

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After having dialogue with a customer, have you ever thought, “Wow…wasn’t that a great conversation?” Have you ever hung up the phone and said, “She was so nice.” And maybe you have said, “We really, really get along.” Or on the contrary, how many times have you said, “What did I say to irritate that […]

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Source: NACM’s Principles of Business Credit Credit investigations on a customer don’t end once an application is approved and an account is established. Every company’s credit policy should include procedures for updating customer credit applications periodically, keeping in mind that certain specific events should trigger an immediate reevaluation. When to Investigate an Account It is […]

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When facing a company showing signs of distress, we often hear credit managers afraid of the “big B,” bankruptcy. Well, while closing the doors of a company is never a pleasant thing, there might be another way to shut down without the many legal pitfalls for creditors in bankruptcy. The legal world fully embraces any […]

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Michael C. Dennis

Collectors often make the mistake of talking to “Puppets,” those who are not authorized to make decisions, and are surprised and disappointed when a Puppeteer working at the customer company overrides, overrules or ignores the payment commitment provided by their Puppet. In a credit manager’s world where the norm is to deal with “puppets,” how […]

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Larry Convoy, lead group facilitator

I have often wondered how industry groups are able to hold meetings in the winter in the Middle and Northeast parts of the country. Last month, I experienced this when one of my National groups met in Nashville. The temperature went from a high of 18* to a low of -3* with the wind-chill and […]

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Melissa Kobus, CCE, is the Credit Management Association Chair and Regional Credit Manager for Anixter Inc., based in Anaheim, CA. She can be reached at 714-695-2219, or melissa.kobus@anixter.com

Last week someone asked me why my company joined CMA. I did not have to think long about why we became a member of CMA, it is all about the access to resources. The number 1 reason we joined was the electrical credit industry group. I have been a group member for over 15 years. […]

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Tony Hadley of Experian

by Tony Hadley Senior Vice President, Government Affairs and Public Policy, Experian   In many cases, business lenders often rely on the commercial credit of the enterprise coupled with the personal credit of the business owner when making lending decisions. This is especially true for sole proprietorships and partnerships. To that end, regulatory action and […]

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CMA Has Solutions

Recently, a friend of mine told me that he joined a well-known national association. When I asked him why he joined, he told me he was really only interested in one of the benefits they offered, and that he would probably never explore the other benefits because that one thing was valuable enough to him […]

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Larry Convoy, lead group facilitator

Recently, I discovered that a longtime CMA and group member had played college basketball not far from where I went to school.  A few years ago, I found out that gentleman who sat next to me at a group meeting was a decorated hero from the Korean War.  Unfortunately, both discoveries were a result of […]

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Melissa Kobus, CCE, is the Credit Management Association Chair and Regional Credit Manager for Anixter Inc., based in Anaheim, CA. She can be reached at 714-695-2219, or melissa.kobus@anixter.com

The role of credit is ever changing.   What credit professionals handle on a daily, weekly, monthly basis is challenging and can sometimes feel overwhelming.  The requests from your customers, internally and externally, require you to reprioritize at any minute of the day.  What happens when the requests outweigh the resources available?  How do you handle […]

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financial_plan

In a recent survey of entrepreneurs that were about to start a business or had been in business for less than a year, we recently uncovered the areas that business owners explored to finance their business. When asked about how they financed their businesses or how they planned their financing, some revealing answers came to […]

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Scott Blakeley, esq.

By Scott Blakeley, Esq. Blakeley & Blakeley, LLP Apple has made a media splash with its announcement of Apple Pay, the latest foray of a tech company entering the mobile card payment space. While the B2B space has been slow to embrace electronic payment channel alternatives, especially those designed for smart phones and tablets, these […]

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CMA President Mike Mitchell

Happy New Year! With gas prices down and holiday sales up over last year, 2015 has already been off to a great start. At CMA, we are working on exciting new initiatives that will make it an even happier 2015. I recently attended a credit reporting summit hosted by one of CMA’s partners, Experian, and […]

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Melissa Kobus, CCE, is the Credit Management Association Chair and Regional Credit Manager for Anixter Inc., based in Anaheim, CA. She can be reached at 714-695-2219, or melissa.kobus@anixter.com

I find that the more you give the more you get back.  Sometimes it’s obvious, sometimes it’s in smaller increments.  In the credit world however, sometimes it can be hard to give.  You never know if your customer will send the payment your way, if the sales rep will get that RA or credit issued.  […]

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Resident IT expert Michael Hansen Celebrates 25 years with CMA

As the year draws to a close, it’s time to celebrate some of the notable accomplishments that happened in 2014, as the association staff looks forward to serving your risk management needs in 2015. Among those activities, several members of CMA’s own staff celebrated milestone anniversaries in 2014, and we ask that you join with […]

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I Like Playing Texas Hold-Em.  I Must Be A Credit Manager

I find many similarities between playing winning poker and being a successful Credit Manager.   I believe there are definitely transferable skills. Deciding whether or not to play a hand of cards is part gambling and part investing – – identical ingredients in deciding whether or not to extend credit.  Both require one to make decisions […]

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2014 has been a very productive year for us at Credit Management Association. While the year will be remembered in pop culture history for its massive data breaches and Kim Kardashian “breaking the internet,” CMA has continued to help businesses minimize risk, as it has since it was founded in 1883. Additionally, it has enhanced […]

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There is no time more stressful for small business owners than the end of the year. This period of juggling numbers, sorting out income and finding the most efficient tax breaks can confuse anyone. To avoid the cash crunch, many of today’s businesses are turning to invoice discounting services for some much-needed help. Here are […]

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CMA Industry Group Leader Larry Convoy

With due respect to David Letterman and Sports Center’s nightly “Top 10” lists, there are some lists that you would be better off not being on.  One that directly affects you and your company is “The Top 20 Creditors in a Bankruptcy Case,” a document that is easily obtainable by accessing Pacer. No company likes […]

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Melissa Kobus, CCE, is the Credit Management Association Chair and Regional Credit Manager for Anixter Inc., based in Anaheim, CA. She can be reached at 714-695-2219, or melissa.kobus@anixter.com

It’s December, the last month of the fiscal calendar for most companies.  There is a lot of pressure to make sure your results are strong.  The sales team wants to have as many orders as possible go out the door. You need to have as much money as possible come in but your customers are […]

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Scott Blakeley, esq.

The global supply chain is an often written topic in the press. Recent public company chapter 11 filings (usually Delaware or the Southern District of New York) highlight the global network of suppliers reflected in debtors’ lists of 20 or 30 largest unsecured creditors. This list often consists of offshore creditors from around the globe, […]

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CMA Industry Group Leader Larry Convoy

November is a month to give thanks. One of the benefits of working in the Industry Credit Group department that I’m thankful for is the ability to help companies minimize their risk in new industries. In fact, many ideas and leads for new groups come from members who have changed jobs, know the benefits of […]

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Melissa Kobus, CCE, is the Credit Management Association Chair and Regional Credit Manager for Anixter Inc., based in Anaheim, CA. She can be reached at 714-695-2219, or melissa.kobus@anixter.com

As you probably already know, I am a big proponent of continuing education, which is why I attended the CreditScape – Western Region Credit Conference,  held at the Palms Hotel in Las Vegas last month. As someone who has participated in many seminars and events, this was one of the better programs I’ve attended.  I […]

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In today’s metrics-driven business world, just as sales managers are accountable for their monthly quotas, credit departments need to have goals.  Credit managers should select goals for the credit department that are simple to measure and report, as well as easy to gather consistently and frequently.  Goals should focus on quality rather than on quantity, […]

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Credit managers manage risk. Therefore, I think credit managers need to actively seek out “bad news” from their collectors. Small problems can be used as opportunities for credit administrators and collectors to learn more about how to manage risk and collect past due balances more effectively and more efficiently. It’s clear that credit administrators are […]

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CMA Industry Group Leader Larry Convoy

Having recently watched Major League Baseball and its fans pay tribute to one of its greatest players, leaders, and ambassadors, the retiring Derek Jeter, it made me realize that we have industry credit group members that have displayed the same loyalty and longevity and should be recognized for their achievements. Here are just a few […]

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Melissa Kobus, CCE, is the Credit Management Association Chair and Regional Credit Manager for Anixter Inc., based in Anaheim, CA. She can be reached at 714-695-2219, or melissa.kobus@anixter.com

As a credit manager, I am not sure there is any time of the year that is “slow” for me, especially not year-end.  There is always an account that needs attention, money needing to be collected, training that needs to occur, etc.  However, as we roll into the last quarter of the year, I will […]

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Michael C. Dennis

How many different types of customers do you have? The way I see it, the credit department has at least three customers:  (1) The Sales Department, (2) their Company’s Senior Management, and (3) The Customer.  Business gurus may differ in opinions and approaches to customer focus and customer orientation, but these truths about customers are […]

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CMA President Mike Mitchell

I have long wondered why institutions of higher learning have not offered courses in business credit. When I was pursuing my graduate degree in business administration, I don’t recall that credit ever came up as part of the course curriculum. I began working for CMA shortly after I completed my degree, and this is where […]

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Over the years, I have attended dozens of trade shows in my role of Industry Group Secretary for CMA.  My travels have taken me to Orlando, New Orleans, Atlanta, San Francisco and Dallas, cities where food, travel and accommodations can be quite costly. What always surprised me was the ratio of salespeople to credit people […]

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cheryl lloyd

Congratulations to CMA senior accountant Cheryl Lloyd, who on Monday celebrated her 50th anniversary with Credit Management Association. Lloyd, who began working at the CMA headquarters (then located in the Koreatown area of Los Angeles) on Sept. 8, 1964, started as an Industry Credit Group clerk, moved over to maintaining membership records, then to accounting […]

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Melissa Kobus, CCE, is the Credit Management Association Chair and Regional Credit Manager for Anixter Inc., based in Anaheim, CA. She can be reached at 714-695-2219, or melissa.kobus@anixter.com

I was thinking about the amount of data that is available to today’s credit manager. Historical data and current facts are keys in making a decision to continue to support a customer.  It is quite amazing how much information is right at my fingertips.   Reviewing financials, a customers’ average day to pay and understanding their […]

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Consider this example. Two credit managers, both with similar resumes, are vying for the same position within a company. Who gets the job, since both candidates (at least on paper) are so similar? The answer is easy: the one whose resume was hand-delivered to the boss’ desk by their contact, who works at the company. […]

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Credit Management Association® and Trade Information Exchange are proud to announce that they have produced the anscersX Report, a single report that contains all the key elements about your customers’ paying habits needed to make most credit decisions.

The anscersX multi-bureau trade credit report combines key factors from the three largest trade credit reporting agencies (D&B, Experian and Equifax), giving credit managers the most complete payment story available. “We spent time reviewing all the elements on each provider’s business credit report to determine what would give anscersX clients the best insight into their […]

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Take a look around your office at all the new gadgets you have to assist you in your job that were not available 5, 10, 20 or 30 years ago.  Five years ago, there were no tablet PCs portable enough to carry in your pocket capable of holding the contents of your entire desktop computer. […]

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Melissa Kobus, CCE, is the Credit Management Association Chair and Regional Credit Manager for Anixter Inc., based in Anaheim, CA. She can be reached at 714-695-2219, or melissa.kobus@anixter.com

Credit professionals are a great group of people. They are hard workers. They are multi-taskers. They are consensus builders. They are goal focused. They are risk managers. But, what keeps them engaged and involved? Motivation is defined as the reason one has for acting or behaving in a particular way.  So what motivates the credit […]

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Michael C. Dennis

When I earned my MBA, I learned new skills and added them to my tool belt. Then, I got my first job as a collector and found I needed an entirely different set of tools. CMA offers a variety of educational options that will provide you with some new tools…new ways to think about how […]

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With the so-called “information age,” the business landscape is very different than it was 10-15 years ago. Lots of things are happening faster than ever before: speed to market, speed at which your customers demand information about your product, venues of where your products are sold, decreased budgets (read: do more with less resources) and […]

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Melissa Kobus, CCE, is the Credit Management Association Chair and Regional Credit Manager for Anixter Inc., based in Anaheim, CA. She can be reached at 714-695-2219, or melissa.kobus@anixter.com

More than 15 years ago, I decided to invest in my future (and my company’s as well) by taking the first steps into gaining my professional designation, signing up for NACM’s Business Credit Principles class. It was a great class.  I had a wonderful instructor who brought a lot of different experiences to us.  One […]

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Like many people, I’ve been watching the World Cup soccer matches (time permitting). For whatever reason, I’ve been trying to draw insights from the competitions that are applicable to the workplace. Here are a few I’ve come up with: It pays to be a winner Teamwork is critical to your success… …So is having a […]

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At CMA, we are of the mindset that the more effort and information our members put in, the more they will benefit. Regardless, it never ceases to amaze me as to how committed certain members of industry credit groups are.  Below are some examples of credit people making the extra effort. We have group members […]

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One of the most frequently asked questions AGA gets from our clients is “how do we capitalize on our ability to collect from our customers?” Our answer is always the same: to be successful in maximizing your cash flow and reducing write-offs you must have three critical policies in place: 1. A Defined Credit Policy – […]

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I recently overheard a collector say this: “I am under a lot of pressure to collect the past-due balance as soon as possible.”  Upon hearing this, the customer could be forgiven for assuming they’re in a strong bargaining position. When a debtor thinks they are in the “driver’s seat,” it is more difficult for the […]

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Your company’s pricing is predicated on certain assumptions about risk mitigation, payment delinquencies and bad debt write offs. Even with customer financial statements in hand, the credit decision can be complicated and the answer may be unclear. Without customer financial statements, you are truly in the dark about the amount of credit risk you are […]

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I don’t know about you, but I’m all about doing things as efficiently as possible.  Efficiency saves me time and money, and allows me to get more things accomplished. Sometimes I have to do an extra step or two at the beginning in order to implement the efficiency, but when I do, I know I’ll […]

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In today’s connected world, fraud is an epidemic that can hurt any company, big or small, and it’s becoming more common. In my company, we recently were hit with some large fraud both with “phony” PO’s and stolen credit cards.  As credit managers, make sure that you are diligent about watching for the red flags […]

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There are many benefits associated with joining an industry credit group. In my opinion, one of the best reasons to do so is to make certain that your company’s tolerance for credit risk is similar to other companies selling to common customers. I am all in favor of leading rather than following, and I fully […]

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A friend of mine was told by a headhunter that she was overqualified for a position.  What does it mean?  Usually, it is code for: (a) you are too expensive or (b) you are too old.  If we give the hiring company the benefit of the doubt, we are left only with (a). In my […]

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Sometimes brevity is best. Most accounts payable clerks receive more voice mail messages than they can (or are willing to) respond to.  When making a call, if you must leave a message, make it a good one!   Your message should be clear and unambiguous.  You should indicate that your message is urgent.  Be sure to […]

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Credit managers, are you involuntarily contributing to this situation by lack of communication? With some customers, getting the purchase order is a long process that involves significant work by your salesperson.  It is easy to understand how frustrating it may be if at the end of a long process it turns out that the company […]

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A friend of mine recently added something new to the signature line on her emails.  They now read:  Dana Keating, LCP.  You know how some people [including me] are afraid to ask questions for fear of showing weakness and ignorance.  Well, I finally asked about her new LCP designation.  Dana told me I am also […]

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I was just re-reading my recent blog post about career limiting mistakes, and thought I’d add this insight that applies to anyone who is a manager. Don’t delay difficult discussions with your subordinates relating to performance or behavior problems. Doing so tends to de-motivate and demoralize other members of your team who are usually watching […]

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I was recently thinking about the lessons I’ve learned in my experience as a credit manager, and I thought I’d share them with you. This is the advice I’d give to both a new and veteran credit manager. You can avoid many mistakes by following these guidelines: Admit when you make errors, correct them as […]

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My Favorite Payment Excuses The check signer is: …sick …dead …retired …suspended …on vacation …on maternity leave …not taking calls from creditors …away from his/ her/ its desk… or …Dying or Lying Payment is: …in the mail …lost in the mail …going to be mailed …Gone with the wind In order to issue payment to […]

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Many companies have faced the question of whether to centralize or decentralize the credit function.   It is a complicated decision. Here are my thoughts: The trends is overwhelmingly toward centralization. Centralization has the advantage of helping to create an environment in which consistent credit decisions can be made. Centralization enables rapid exchange of information among […]

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Annoying Your Customers

Some words that are commonly used by collectors annoy customers. Here are a few examples: ‘Fair’, ‘Reasonable’, ‘Honest’, ‘Rational.’ In the relevant context, a collector might say: We need a fair and reasonable commitment for payment. I want an honest answer. Please provide a rational explanation for the deduction. Implicit in the collector’s use of […]

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In the Drivers Seat

When it’s all said and done, Collectors either want a commitment for payment, or to gather new information to understand why their customer cannot issue payment.  Once a sale is made on open account terms, the debtor is in a very real sense in the driver’s seat.  Why?  Because they have your product and your money.  They decide […]

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EXPORTS-ship

Exports account for a significant portion of sales for many U.S. based companies. The ability to compete successfully in the global marketplace has become a necessity. So has the need for the credit function to think, act and manage credit risk globally. The procedure for making an export credit decision includes some of the same […]

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Caution Downsizing

The economy has many companies evaluating downsizing the credit function. Employers rationalize this by defining credit and collections as either (a) a cost center or (b) as a “non core business function.” Since account receivable is often a company’s largest Current Asset, concerns about staff reductions in credit and collections are well-founded. Downsizing affects effectiveness. Even […]

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Charles Darwin, photographed by Julia Margaret...

Charles Darwin theorized that success went to individuals best able to adapt to change, not necessarily to the strongest or the smartest or the fastest.  Changes are most likely to affect, most dramatically, individuals who are the least able to adapt effectively to them.  What’s my advice?  The next time you consider pushing back or dragging […]

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Who Approved That?

This is a question often asked in relation to the write off of unearned cash discounts.  The people with the authority to approve writing off an unearned discount, or alternatively not charging back unearned cash discounts, often have a vested interest in making the unearned discount disappear. For example, the salesperson wants a positive working […]

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Repetitive Tasks

Looking back, I believe that one of the mistakes I made when interviewing for collectors was to focus too much attention on experience and talent, and not enough on other attributes of candidates including: trainability, enthusiasm and work ethic. Why? Because I equated ‘more experienced’ with ‘better at their job.’ I don’t think I am […]

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Michael Dennis, MBA, CBF, LCM

Once upon a mid-day dreary, While I labored bored and weary, Came a knock upon my door, Came salesman to implore, Using words I’d heard before, Ship the Orders, nothing more. Pleased I was not by his tapping, Wakened me from almost napping, With a comment I abhor: Ship the Product, nothing more. To the […]

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So What?

I recently received an email from an old friend who just completed a long-term temp assignment asking if I knew of any temp or permanent positions.  Naturally, Ann included her resume.  I reviewed that resume, and provided these comments:  A three page resume is too long The resume includes too much information in too much […]

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'Tis The Season

For some reason, post-audit claims always seem to arrive in bunches. I just received two post-audit claims in less than 30 days. I know from experience that post-audit claims are time consuming and can be costly IF your company cannot provide the necessary documentation. Post audit claims typically involve a claim that a customer: Overpaid […]

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Pet Peeves

These are a few of my (least) favorite things: Too many meetings lasting too long with too many attendees talking too long about too many things that are not relevant to the meeting agenda Along the same lines, attendees who prolong meetings by asking one or a series of inane questions  Anyone who tells me […]

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Diminishing Returns

One aspect or application of the Law of Diminishing Returns states that there is a break-even-point at which the cost of additional resources [including time and energy and effort] does not match the benefits associated with the application of these resources.   This is true in manufacturing, as well as in credit and collections.  At a […]

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Scores since 2009

Each quarter CMA surveys our members about their payment experiences and payment confidence for the next quarter. The CMA Credit Confidence Score represents the level of confidence our members have in their customers’ ability to pay in the next quarter. The scale is 1 to 10 with 10 being the highest level of confidence. The […]

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No Clue

Years ago, I misjudged the negotiating power of one of our largest customers. The customer was a national retail chain that routinely paid 20 to 30 days beyond our terms. I decided to draw a line in the sand when the account slipped to more than 45 days past due with no payment commitment offered. […]

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When the Going Gets Tough

I spoke to a friend of mine recently.  I have always considered her to be a truly accomplished and knowledgeable credit professional and manager.  She told me that she received a 2% increase at her most recent annual performance review.  Her said that her manager told her that 2% was “the best the company could […]

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Most Expensive Mistake

The most expensive type of mistake to make is one that you do not learn from.  Why?  If you do not learn from your mistakes, you are likely repeat them. In my opinion, every time a company has a bad debt write off, an examination should take place to determine if the credit risk was properly […]

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Cold Dead Fish On Rice

I believe there is a tendency among credit professionals to sell themselves short.  If we described Sushi as “cold dead fish served on rice” people would think long and hard about ordering it because that is selling Sushi short.  Every successful credit professional I know is a solution provider. They have a unique set of skills […]

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Overworked Update

A couple of weeks ago, I wrote about a fellow credit manager working 60+ hour weeks with no end in sight.   I commented that he was putting his health and his marriage at risk and challenged him to either (a) take action, or (b) choose to do nothing and accept the consequences. I have an […]

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Multitasking or Managing Priorities?

If your answer is Yes, do you consider this to be multitasking?  I believe multitasking is impossible.  If you disagree, try this simple experiment:  Can you: Add 8+13+9 and spell the name of your first pet at the same time.  If you can, you are capable of multitasking.  Here is a work example:  Can you […]

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Discretion In Action!

From time to time, everyone must deal with an irate customer.  Sometimes, I feel like I am talking to a child throwing a temper tantrum.  Over time, I have learned by trial and error what not to do or say when a customer is having a meltdown on the phone. I learned to be patient. […]

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Get In Balance

I was talking to a friend of mine recently at an industry credit group meeting.   He told me over lunch that he was now working half days.  I congratulated him.  He told me his comment was meant as a joke and that half-days meant he was working 12 hours a day, every day.  He explained […]

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starttheday

I start every day with five to ten outbound phone calls. The reasons for making these calls include: · Ensuring that problems previously identified have been addressed and resolved · Thanking customers and salespeople for their assistance · Requesting help from other employees in addressing open issues · Following up with customers to make sure […]

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Why?

A friend of mine is a credit manager. She told me that during a regularly scheduled staff meeting, one of her newer collectors asked why they were required to speak with a delinquent debtor no less frequently than once every seven days — in contrast to simply leaving voice mail message for them. My friend […]

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Answer- So What?

A couple of years ago, I joined the Financial Executives Networking Group (FENG). Networking is often the key to finding a new position, especially when you are out of work. For me, one of the advantages of FENG membership is that I can repay in-kind the people who helped me through two layoffs. I volunteered […]

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Don't Have Time

At a recent industry credit group meeting, the morning guest speaker talked about the need for periodic financial statement updates from customers. One of his strongest recommendations involved updating statements no less frequently than once a year…an idea I agree with completely. Over lunch, several of the credit managers at my table basically scoffed at […]

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Must Do List

A decade or so ago, I carried around a particular brand of Day Planner about 2 inches thick.  I attended a workshop on how to use it, and other workshops on related topics including Prioritizing and Creating a To-Do List. That was then, and this is now.  I no longer focus on generating daily To-Do […]

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Build Your Network

As a credit manager, you know that unless the credit limit requested exceeds your level of authority, the responsibility for making the decision is yours.  Many, and probably most credit managers carry this responsibility alone.  I believe this is a serious mistake. In my opinion, credit managers should develop a network of advisors.  This is […]

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Willing to Walk Away

A new credit applicant company refused to sign our credit agreement or list bank and trade references, or provide financial statements, or sign a personal guarantee.  The VP of Sales stopped in to tell me that this applicant was “important” and could become one of our larger customers.  He added that he would have to […]

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Fishing For Information

In the last week, I have received calls with questions from two different members of our industry credit group.  In both cases, the answer to the question was essentially a click away and I referred the callers to the Encyclopedia of Credit.  As some of you already know, access to the Encyclopedia of Credit is […]

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Final Demand

I recently received a final demand notice from a Supplier.  After I read it, I sent it to our A/P Manager.  Whenever I receive something from another credit department, I try to see what I can learn from them.  In this case, there was essentially nothing to learn.  The final demand letter was too long, and […]

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A Better Mouse Trap?

I recently attended a Lunch-And-Learn program sponsored by our credit reporting agency.  Their guest speaker spoke about the importance of accurate bad debt forecasting.  His presentation described a study he had conducted for the credit reporting agency in which customer ratings were used to establish appropriate bad debt reserves.  I was intrigued. He recommended that […]

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Opportunity Is Knocking

Today’s business climate provides an excellent opportunity for credit managers to refine and sharpen the collection and risk management skills and to refine the process within their departments.  Credit managers across all industries face continual pressure to: (1) reduce DSO (2) minimize bad debt losses (3) offer more reports, analysis value-added services to internal customers […]

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Warmonger

I have been called a lot of things. An email I received recently from a division sales manager was the first time I was called a warmonger.   I had to look up the definition.  A warmonger is someone who tries to stir up wars. I called and asked what he meant when he wrote this. […]

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Conflict

In a meeting last week with our VP of Sales,  this comment was made after a particularly lively discussion about whether or not a seriously delinquent customer with two broken payment commitments should be on credit hold:  “I think you enjoy situations involving conflicts with our customers.   It is almost like you made the decision to place […]

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The SIlver Bullet

In response to a recent blog in which I suggested that companies not reporting bad debt losses are not taking enough credit risk, I received an email suggesting that I had overlooked an important option which would allow B2B creditors to offer credit to less creditworthy companies with little or no credit risk.  His comment was essentially this:  Credit insurance is a “silver bullet.”  Bad debts are the problem and credit insurance is the solution. […]

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Final Demand

A friend of mine called to ask if it was possible to have no bad debt losses. My flippant response was: “Sure, if you don’t take any risk.” Another friend of mine was fired after three years with no bad debt losses. Why? Because management said he was not taking enough risk. It is easy […]

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View From Under The Bus

I had lunch with a friend and former manager last week.  When I left the company, he was VP of Finance.  Since then, that company has been acquired by a competitor.  Since he is still employed, I assumed things were going well.  Wrong! I asked him how he liked working for the new company.  He […]

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Be Awesome

For years, I have been writing New Year’s Resolutions every year.  These resolutions usually addressed perceived deficiencies.  For example, one of my resolutions last year was to become more proficient at analyzing foreign financial statements.  Another resolution was to lend my expertise to the Purchasing Department by becoming more active in qualifying new suppliers.  This […]

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No Bribes

A friend of mine called recently to share this story.  A member of his credit team was contacted by a customer.  She was asked if she responded to trade reference inquiries.  She answered yes.  The customer asked if the trade reference she provided would be done“faster and better” if she received a $250 expediting fee.  She told […]

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Inconsistent Choices

A friend of mine was invited to a meeting in his manager’s office. The VP of Sales and the Controller were waiting when he arrived. He was told that sales management had no confidence in the credit department because the decisions made by the four people in credit with the authority to release orders or […]

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Not a Great Idea

Last month, I was invited to attend an industry credit group meeting as a guest / prospective member.  FYI, this group was not part of CMA.  I was also invited to the group’s reception the night before, which is a regularly scheduled event because many attendees fly in for the group meeting the night before. […]

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It's A Trap

I recently received an email from a credit manager friend of mine I will call Al.  The email explained that Al’s employer just hired a new CFO.  The CFO told Al that the company’s bad debt loss history was unacceptable and that something had to be done immediately.  Al suggested the following: 1.       Hold orders more […]

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Now not Later

On numerous occasions, delinquent debtors have given me this ultimatum in connection with payment of their past due balance.   “We are not going to discuss payment status until and unless you release the orders you have on credit hold.”  Often, credit department employees are so surprised by this tactic that they are at a loss […]

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Setting the Bar

When I was a consultant, it was always difficult for me to understand how or why a credit department would not have specific goals and objectives for every one of its collectors.  I think that setting the bar for collectors is an essential part of a managing the department and a great way to increase […]

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Backed Into A Corner

About a year ago, I attended a half-day training program geared primarily toward our sales department in which the speaker emphasized communicating, connecting, and compromising as ways to rapidly increase sales and profits.  At one point, we were asked to break into smaller working groups.  My group consisted of me and 6 salespeople and not surprisingly, they wanted […]

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5 Years Later

Five years ago, I wrote an article entitled “Twenty-Five Tips on Deduction Management.”  This article resulted in several speaking engagements for me.  I ran across this article quite recently, and I was amazed by what I read and by what I didn’t read.  Only 1 of the 25 tips addressed credit automation and more specifically deduction management software.  That […]

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What's the difference?

Like most managers, credit managers are invited to attend numerous meetings.  A friend of mine works for a company where he routinely spends 15 hours a week in what he calls Nice to Know meetings.  These are not special meetings called to address and resolve particular issues or concerns, and the most painful to attend […]

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That's Not Intimidating To Me

My father was an NCO in the British Army.  When I was growing up, if you were easily intimidated, you didn’t get a lot to eat at the free-for-all that we called meal-times…. So I am not easily intimidated. Delinquent debtors frequently use intimidation as a negotiation tactic.  Often it takes this form; the debtor […]

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Recipe for Dissater

I recently had lunch with a friend of mine.  As we talked, he shared his concern that the deduction specialist he had hired about a year ago was not working out.  He dreaded the idea of firing her because he did not want to take the time necessary to train someone to replace her.  Based […]

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Toot Your Horn

In the 1990s, I was interviewing for a position as a credit manager.  The negotiations were going well.  The CFO and I had discussed an annual salary.  I met with the company President and I thought the interview was largely a formality.  It was not. The President told me he wanted to offer me two-thirds […]

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English: U.S. swimmer Michael Phelps shows off...

Carrying on the Olympic analogies in this Blog, I was watching the medal rounds of the swimming events which, I admit, are my favorite Olympic events.  A couple of the medalists won based on raw talent despite being young and inexperienced in international competition.  However, the majority of the athletes that received medals were experienced, seasoned athletes who won in […]

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Executive Body Armor

I have been laid off twice.  The first time was unpleasant.  The second time, I was out of work for five months and had to move five hundred miles in order to get another position.  I consider myself lucky.  A good friend of mine was out of work for eighteen months before he found work […]

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Got Change?

Change in the workplace is both inevitable and unavoidable. Change can be positive or negative. For example, if your job is being outsourced the change, from your point of view, is negative. However, some changes can have a positive impact on the credit function. Some changes foster and encourage positive changes including more teamwork, better […]

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Can't Delegate This!

Years ago I wrote an article entitled: “Only Superman Can’t Delegate” which was published in “Business Credit” magazine.  I wrote that it was essential to delegate, and that delegation benefits the delegator and the person to whom work has been delegated. A colleague contacted me recently.  She is a credit manager. Her question was why […]

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Soft Skills Needed For Leadership

A credit manager can have exceptional technical skills but be considered an ineffective department leader because of poor interpersonal, communication or relationship-building skills.  I believe that any credit manager that does not have the skills needed to effectively lead, manage, mentor, and train their subordinates will not be a particularly effective manager.  Why?  Because department managers succeed or fail […]

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Supersize or Specialize

Another friend of mine lost her job after many years when her credit department was combined with customer support and order entry and her position as credit manager was eliminated.  I honestly and sincerely don’t get it.  The skills required to be effective in the collection role are very different from the skills required to […]

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Garbage In, Garbage Out

A friend of mine asked for my comments about a scenario in which an applicant stated it was their company policy not to release bank information to any creditor. I responded that my concern is the applicant has something to hide.  Examples include a loan default, low account balances, NSF checks, or loan covenant violations […]

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Voice Mail Jail

I believe any collection call that does not result in a payment commitment being made by the debtor must be considered a failure, and a collection call resulting in a payment commitment of less money than the creditor expected must be characterized as only marginally productive.  Many times, collectors never speak to anyone in accounts […]

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Learn From Mistakes

It is essential that we learn from our mistakes.  Bad debt losses are a cost of doing business, and every sale on open account terms carries some risk of nonpayment.  That said, when a bad debt loss occurs, you have two options:  (1) Lament your losses or (2) Learn from them. I believe that there […]

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Merry Go Round

The majority of deductions are the result of errors made by the creditor company.  Some of the more typical errors include mistakes in pricing, picking, packing and shipping.  Many credit pros are on a merry-go-round in which they clear a hundred or more deductions a month only to find a hundred new deductions open the […]

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Keep Holding On

One of the questions that I am frequently asked is this:  When should I place an account for collection?  In my opinion, most creditors hang onto delinquent debts far too long before placing a debtor company for collection.  There are a variety of reasons that this is true, including hope that the debtor will pull […]

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Coffee Is For Sales "Collectors"

In a previous blog post, I suggested using salespeople in the debt collection process. More specifically, I said that salespeople could use their close working relationships with customers to convince them to more quickly retire past due balances.  The feedback that I received was not entirely favorable. Several people suggested that it was never a […]

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Square Peg, Round Hole

As a consultant, I often find that clients had assigned their most experienced collectors or their best collectors to their largest customer accounts.  There is a widely-held theory was that the larger the customer account and balance due, the more experienced the collector should be. In my opinion, regardless of the size of the credit […]

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Risk and Reward

I attended a seminar recently.  One attendee suggested that export sales are often more trouble than they are worth.  She expressed frustration about the difficulties evaluating credit risk including the problems getting trade references and bank references, as well as the challenges often associated with collecting past due balances. In my opinion, the opportunities that […]

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Annual Update Meltdown

In a previous Blog, I said that I thought it was essential to require some privately held customers to provide financial statement updates at least once a year.  Since then, I have received several calls suggesting that requesting this information from customers would upset the apple cart.  I disagree.  I believe the bigger risk to […]

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Bad Manners?

Many debtors seem to think that creditors should always allow a grace period of at least 7 days before calling for payment status on a past due balance.  On more than one occasion, I have been called impolite, rude and even unprofessional because I called to inquire about the status of past due invoices sooner […]

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Tug of War

I believe that the relationship between sales and credit is frequently misunderstood.  There are individuals in sales and in credit who believe that sales and credit are, in a sense, in competition with each other.  The basic premise is that extending credit to customers is a “zero sum game” meaning that if sales “wins,” the […]

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All About The Money

There is a theory that an all-out effort will collect almost every delinquent account.  In webinars, I have referred to this as the Ship-and-Pray method of credit risk management.  I believe that the right time and the best time to manage credit risk is before the account is ever opened and certainly before orders are […]

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New Look at Equity

I have been giving some thought to the use and abuse of customer financial ratios in which Equity is the denominator. One such ratio is the Debt to Equity Ratio calculated using this simple formula: Total Liabilities divided by Equity. I think that credit professionals need to keep in mind that Equity is a residual […]

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Fraudulent Financials

From time to time, subscribers to my newsletter call me for advice. Often, I can help. Occasionally, I am at a loss. Last week, I was stumped. The caller had a story and a question. The story was that she was asked to evaluate an applicant for a 7 figure credit limit. She requested and […]

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Onshore or Offshore?

A friend of mine is an experienced credit analyst.  He lost his job recently as a result of outsourcing.  He learned that his employer initially hired four people in China to do his job and asked me how this could be cost-effective.  I suggested the following:  Assume that your salary and benefits total $50,000 a […]

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right-tool-440x220

During a recent seminar, I was asked if customer financial statements are the right tool for establishing credit limits for new accounts and for monitoring or changing the credit limits for active customers.  It was a great question and one that I have thought a lot about.  In my opinion, financial statements are a useful […]

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Balancing Act

A few years ago, a good friend of mine who worked in the automotive aftermarket industry lost his job as a credit manager as a direct result of his management of bad debt losses and DSO.  More specifically, he was fired because, under his guidance, the credit department had not written off any bad debts […]

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Hamlet - To Be or Not To Be

I recently received a call asking what I thought of this proposal to a creditor from a third party collection agency.  The agency would collect on a contingent fee structure debts at between 15% and 20% of the amount collected depending on the age of the debt when placed. If the standard collection process did […]

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USPS service delivery truck in a residential a...

For those of you who may have forgotten, this phrase is part of the creed of the United States Postal Service.  Someone asked me recently if I thought that the proposal by the USPS to reduce services such as Saturday delivery could have a negative impact on credit and collection and on DSO.  It was […]

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Honey or Vinegar

There is an old expression that you can attract more bees with honey than with vinegar. Does this relate to business to business debt collection?  Will a friendly approach to debt collection result in a faster payment than a more direct approach in which the collector is “all business.”  Honestly, I don’t have any statistics […]

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That's Not Funny

As a consultant, I have occasionally seen dunning notices and other correspondence being sent by my clients to delinquent customers with stickers, stamps or other messages considered to be or intended to be humorous reminders to pay the past due balance.  In my opinion, when you use humor in collection correspondence you are trivializing the […]

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Public Speaking

Many years ago, I feared public speaking. I had all the classic symptoms of anxiety related to making a speech:  I froze up.  I felt sick.  I wanted to be anywhere but in front of an audience.  I tried to convince others that they were a better choice to make the speech. One day I […]

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The Truth Hurts

Several years ago, a very good friend of mine – let’s call him Roy – accepted an early retirement package.  He decided that he was too young to retire so he started a commercial collection agency in Florida.   Naturally, he called his friends to tell them about this new chapter in his life and to […]

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Put on Velvet Gloves

Years ago, my manager and long-time mentor talked to me about delivering bad news to customers.  His comments were:  There is no good way to deliver bad news.  However, if you have to tell an applicant they have been rejected for open account terms or tell a customer that they don’t qualify for a higher […]

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Listen For Clues

Debtor’s Plan Pledges up To 10% Recovery for Unsecured Creditors. I read this recent headline a couple of times. Then I stopped to think about what it actually means to unsecured creditors. What it really says is that unsecured creditors could receive as much as ten cents on the dollar… but are guaranteed absolutely nothing. […]

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Work-Smarter-Not-Harder-Sign-S-8445

On my first day following training as a collector, I was assigned a relatively small group of accounts by my manager.   After about two hours, my manager called me into his office.  He asked if I remembered calling a customer about a $57 past due invoice that was less than a week past due.  […]

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Be Willing to Walk

Some time ago, I attended an industry credit group meeting as a prospective member.  The group was run by an NACM affiliate, but it was not run by Credit Management Association.  Like every other industry credit group meeting, the President of the group read the antitrust statement, which was followed by introductions. The group meeting […]

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11
Back Up The Boss

A friend of mine, let’s call him Tom, called to ask for my advice.  His company had a customer with a $1 million credit limit.  That customer had experienced some financial setbacks over the last year.  As credit manager, Tom believed that the customer still warranted the $1 million open account.  His manager disagreed.  She […]

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7
Ouija Board

A good friend of mine recently called to discuss a credit limit for a new account.  The scenario involved a partnership that had been dissolved.  One partner bought out the other, and the now unemployed partner decided to start a competitor company, and he applied to most of his prior company’s creditors for open account […]

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8
No Bullies

There is a widely held belief that if you stand up to a bully, they will back down.  In reality, bullies sometimes back down and other times they knock you flat.  This is my story about being knocked flat. I was working with a large retail customer that took unearned cash discounts and other unauthorized […]

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12
Shocked and Appalled

If you recall the weakest credit application you have seen this year, you will have an idea about the problems with an application I rejected. I assumed the applicant company would not be surprised by the decision. I also assumed they hoped for the best, but expected the worst when the application was submitted. To […]

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7
Watch Out!

Years ago, my manager and I attended the national sales meeting. On the second day, the VP of Sales made a surprise announcement. “All of you know that our Credit Manager is here. I am going invite him up to explain why our credit policies are so restrictive that we lost business last year to […]

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4
100 Years and Counting

When it comes to credit and collections, technology has changed a great deal.  Customers that once submitted purchase orders by mail or phone or fax now do so via EDI. Creditors that used to mail out thousands of invoices a day now send invoices electronically that are then uploaded into their customers’ accounts payable systems […]

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3
Behind The Curtain

For the first time in a long time, I will not be attending the upcoming Western Regional Credit Conference (WRCC) due to a prior business commitment that I could not miss and could not delegate to anyone else.  As a presenter at more than ten WRCC meetings, my perspective on credit Conferences is a bit […]

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7
Give & Take

First and foremost, I am very grateful for the work done by official unsecured Creditors Committees in Chapter 11 bankruptcies.  Having served on two Committees, in my opinion what members of the committee give to the creditor community is far more than they are likely to take from serving on a Committee. A former student […]

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6
Don't Get Stuck

Sooner or later, every credit professional will be asked this question by their boss: “What credit limit do you recommend we assign to this customer or applicant — the one with the deficit net worth?” Customers with a deficit net worth are technically insolvent, and insolvent companies have a nasty habit of filing for bankruptcy protection. There […]

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5
100% Personal Guarantee

A friend recently told me that following a heated discussion regarding the creditworthiness of an applicant, the salesperson involved told my friend and the company CFO, “I am convinced this company is solid and I will sign the personal guarantee if that is what it takes to get this customer an open account.” The CFO […]

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