Opportunity For Senior Level Credit Execs to Learn From Other Credit Execs

CMA has created an opportunity for top credit executives among different vertical markets to get together to learn from the successes (and failures) of other top credit executives at the CMA Credit Executive Symposium.  This unique event allows senior-level credit executives to gather for a full day roundtable facilitated by 30-year credit veteran Robert Shultz. At the event, you’ll discuss high-level business issues and trends with your peers in many industries, compare best practices, and get tips on valuable resources to help you improve your credit operations.

The agenda for the Credit Executive Symposium is highly personalized and built from input from all participants so the issues are timely and relevant to all attending. Attendees of the event will engage in round-table discussions, thought-provoking breakout sessions, and guest presenters.

Past discussions have included collections, supply chain risk, shared services centers, international risk mitigation, performance metrics, hiring & retaining staff, fraud, and cyber security.

The event takes place on April 11, in Garden Grove, CA, the day before the 2017 Spring CreditScape Summit.

Our facilitator, Bob Shultz, is managing partner at Cutting Edge Business Resources & Solutions (CEBRS). Bob will incorporate trending issues with topic requests from attendees to challenge the group in an intimate, dynamic think-tank environment that is heavy on interaction, low on PowerPoints. You will explore questions that matter most in your career and to your organization in roundtable discussions with seasoned credit peers from many industries. For more information about the event, contact info@emailcma.org or download the event flyer here.

Why a good credit manager should have regular meetings with the CFO

Many credit professionals would agree that the credit management position is often overlooked and undervalued After thinking about the many areas that a credit manager is involved with on a daily basis, many would believe that a good credit manager can directly impact the company’s bottom line. This is why your company’s CFO should make a point to have regular meetings with the credit manager.

These are a few areas to help make this point:

  • Quote to Cash: A good credit manager will help create visibility and reports to identify potential forecasting problems.
  • Compliance: The credit manager often has unique information about the suitability of a prospective customer that may impact the bottom line of the company.
  • Contract process: An experienced credit manager can help identify Terms & Conditions language, verify true corporate structure of the customer and their related entities, and they can help create profitable financing options that are often overlooked especially with repeat customers.
  • Shipping: By partnering with the Shipping department, the credit manager can make sure the credit policy is effectively being followed, cash deposits have been collected, and change orders have been properly identified prior to shipping. Without the credit manager’s insight, possible serious disputes, invoicing problems, and audit issues may appear downstream that may impact cash flow or revenue recognition.
  • Receiving-returned merchandise issues may also over-inflate A/R if credits are not processed in a timely manner.
  • Collections: The credit manager has a major role in the rhythm of the Cash Cycle. They are the drummer in the band; they help manage A/R to Finance relationships; they manage collections, disputes, and workout agreements with customers on a daily basis; all while being customer-centric to make sure the customer is satisfied and will be a repeat customer.
  • Miscellaneous: a seasoned credit manager can help identify best practice resources and quality assurance issues in many areas since they are required to see the BIG picture of the company’s sales objectives.

As the person at your company in charge of assigning credit, do you regularly meet with the CFO? If so, are those meetings useful? We’d love to get your feedback. Thanks for reading!

What About A Personal Guarantee? – Michael Dennis, CBF

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 took him up on his offer. He said, “I am sure the CFO’s decision surprised him because it sure surprised me.”

I was in the process of giving my friends a telephonic high five when the practical implications of this arrangement started to nag at me. I asked if he could explain how the process worked. My first question was: What credit limit does the customer need? The next was: What credit line did they qualify for? The third was: How did you assess the creditworthiness of the salesperson? The answers I received were: This new account wanted a $200,000 credit line. Without the guarantee, I doubt we would have extended more than $25,000. We did nothing to qualify the salesperson for $200,000, but quickly added that they had his signed guarantee on file.

Since everyone has heard that a personal guarantee is only valuable to a creditor to the extent that the guarantor is creditworthy. I shared this concern with my friend, and he agreed that this was a legitimate issue that should have been raised before the guarantee was accepted.

The more I thought about this practice, the more problematic it seemed to get. For example, I wondered if a Court would enforce this type of guarantee, or would find that the salesperson did not receive “adequate consideration” for his pledge. I wondered if employment laws at the state or federal level would prevent the company from enforcing the guarantee through any form of wage garnishment.

I thought about the precedent the credit department had established, and wondered how many more salespeople would be willing to offer up their personal guarantees in the future. I thought about the adversarial proceedings that the credit department might have to initiate against the salesperson/guarantor, and about the damage this could do to the overall working relationship between sales and credit. I came to the conclusion that what appeared at first to be a bold decision that forced the salesperson to put up or shut up was fraught with risks.

Michael Dennis, CBF

I think this is a reminder that unless we take time to consider issues carefully, cautiously and from many different angles, we may put our company at risk.

Michael Dennis’ Covering Credit Commentary. Michael’s website is  www.coveringcredit.com

The opinions presented are those of the author.  The opinions and recommendations do not necessarily reflect the views of CMA, or their Officers and Directors.  Readers are encouraged to evaluate any suggestions or recommendations made, and accept and adopt only those concepts that make sense to them.

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Survey Finds East South Central and West South Central Regions Most Optimistic About Financial Hiring

MENLO PARK, CA — Employers are expected to remain cautious about adding accounting and finance professionals in the third quarter, according to the Robert Half International Financial Hiring IndexFive percent of chief financial officers (CFOs) expect to hire full-time employees during the third quarter while 8 percent anticipate personnel reductions. The majority of respondents (85 percent) say they plan to maintain their current staff levels.

The Robert Half International Financial Hiring Index is based on telephone interviews with more than 1,400 CFOs across the United States. It was conducted by an independent research firm and developed by Robert Half International, the world’s first and largest staffing services firm specializing in accounting and finance. Robert Half has been tracking financial hiring activity in the United States since 1992.

“Many companies remain hesitant to commit to adding staff until they are certain of an economic recovery,” said Max Messmer, chairman and CEO of Robert Half International. “In the meantime, most firms are working with their current teams to manage key initiatives, with some employers also bringing in project professionals to assist with rising workloads and support full-time personnel.”

Financial executives continue to report difficulty finding highly skilled professionals for certain functional areas. Twenty-six percent of CFOs said accounting positions, such as senior and staff accountant posts, are the most difficult to fill. Twenty-three percent said they experience the greatest challenges when hiring for audit roles.

Accounting and Finance Hiring — By Region 
While the overall outlook remains conservative, the highest degree of optimism was expressed by executives in the East South Central and West South Central states. A net 2 percent of CFOs in each region anticipate adding full-time accounting and finance professionals in the third quarter.“Growth among the healthcare and hospitality sectors in some areas within the East South Central states is boosting hiring activity in the region,” Messmer noted. “In the West South Central, employers seek mid-career professionals who have a proven work history and are flexible and skilled enough to manage a range of accounting projects.”

Robert Half commissioned additional interviews with CFOs in more than 40 major metropolitan areas to provide snapshots of financial hiring trends in these markets. The local results are available at www.roberthalffinance.com/PressRoom.

Accounting and Finance Hiring — By Industry 
In nearly every industry, CFOs surveyed said they expect to maintain current staffing levels.About the Robert Half International Financial Hiring Index
First published in 1992, the Robert Half International Financial Hiring Index was conducted by an independent research firm and is based on more than 1,400 telephone interviews with CFOs from a random sample of U.S. companies with 20 or more employees. For the study to be statistically representative and ensure that businesses from all segments were represented, the sample was stratified by geographic region and employee size. The results were then weighted to reflect the proper proportions of employee size within each region.