Why it’s Important to Participate in CMA (and How You Should Participate), by Larry Convoy

Larry Convoy, lead group facilitator

If your Industry Credit Group is anything like some of our other groups, your participation has never been more vital to your company.

We are seeing the super stores (Costco, Home Depot, Walmart, etc.) taking a very substantial market share from the small- to medium-sized businesses. Amazon and other internet-based sites are making it easy for anyone to order any product regardless of where they are located. The days of neighborhood stores and reliable customer service are being replaced by free shipping and easy return policies.

The best way to stay ahead of this trend to protect your company is by participating daily in your industry credit group.

By posting alerts, you not only send out a warning, but it might trigger another member to look at their aging and see the same customer slowing and now a pattern develops. This is exactly the scenario that saved members of the Underwater Sports group from large losses when two major sporting goods companies filed BK in 2016. Post your alert at the first sign of slowness.

By requesting and responding to RFIs, you get a complete picture of the customer you are dealing with. Can the customer handle the total outstanding balance on the report? How is he paying his other suppliers?

The third advantage you have is the monthly meeting/ conference call. There is no other profession where companies share trade and Best Practices with their competitors for their mutual well-being. The meeting is about 90 minutes including lunch, the calls are usually half that time. There is no task that can be performed in that time span that could have a greater financial effect on your company.

There are some extraordinary people in CMA’s groups that know that if they pick up one piece of information at a meeting, on the call or through an alert/RFI, it is time well spent.

The date or call in number is located on your group home page on www.anscers.com. Plan on participating at your next meeting and throughout the year.

CMA Hosts Joint Construction Meeting in Los Angeles

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On October 13, CMA held its first ever joint construction credit meeting, allowing CMA member companies from different vertical industries who sell to the construction industry to get together to talk about common job accounts. In addition, Chris Ng, Esq., spoke to the group on a series of construction law related topics, including the legalities related to job accounts. Amongst the activities at the event included a discussion of best and worst practices, which really hit home with many of the companies who participated. Thanks to all who attended.

How Did the Underwater Sports Credit Group Get Started, Keep its Original Objectives and Continue to Thrive?, by Larry Convoy

How does an industry credit group get started, keep its original objectives and thrive? Take the case of 55-year-old CMA Group Underwater Sports.

On July 12, 1961, representatives from Healthways, US Divers, Voit, Swimmaster and Sportsways held the first official meeting of the newly formed Underwater Sports Equipment Credit Group facilitated by Credit Management Association. These pioneers knew that in order for this industry to grow, manufacturers and retailers must establish guidelines for extending credit, investigating and monitoring new and existing accounts and have a governing body to oversee that all state and Federal laws regarding free trade were adhered to.

Fifty five years later, this group is still instrumental in the industry utilizing the most current technology to insure that the original mission statement, which emphasized “looking for the latest methods to expand the business and the sport of diving,” is applied to each transaction.

Over the last twenty to thirty years, we have seen a dramatic change in the industry. The ownership of retail diving stores has transitioned from the businessman to the hobbyist. Manufacturers have expanded their product lines to encompass other sports and seasons and the group has gone from manual and paper reporting to entirely electronic. Information that took days to distribute now is instantaneous through the click of a mouse.

What has not changed is the value of the group to all in the industry. For the manufactures, having an immediate resource to verify a retailers credit worthiness, to the “Good Paying Account,” an opportunity to have more product lines available through positive payment experiences and to the “slow paying account,” the ability to deal with their suppliers to work out any problems or issues in order to maintain the flow of product needed to sustain the business, are all reasons the members keep coming back.

The diving industry suffered a major hit losing two of this nation’s most respected sporting goods retailers in 2016. Through the exchange of information, the members of the Underwater Sports group were able to identify certain trends and reduce their exposure considerably. A look at the list of the 20 largest creditors reveals that many Non-Diving manufacturers were not as fortunate.

As we conclude another diving season, we invite those manufacturers not participating in the group to investigate the benefits. For further information, contact Larry Convoy at lconvoy@emailcma.org or 818-972-5323.

You Want me to Tell My Competitors WHAT?, by Larry Convoy

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 sit down with the competition and discuss their customers’ paying habits. To an “old school” individual, this is against every business principle they know. So how do we (and I am including officers and
current members) communicate the advantages when this would involve working with the enemy?

One method is waiting for the opportune time. Recently, a group approached a company owner that lost a great deal of money by not knowing that a bankruptcy was approaching. His pain was magnified when he learned that his competitors were aware of the problem months before and reduced their exposure. They will join the group if they survive.

Another method is owner-to-owner direct contact. Chances are, some member of the group has an owner or executive who knows the right person at the prospect company. A phone call explaining how the group has saved them $$$, reduced money spent on report contracts, lowered write-offs and improved their credit departments efficiency through the Best Practices exchange, carries a great deal of weight.

Finding, vetting and securing new members is a task requiring group members and the group facilitator working together. Keep in mind the selling points that convinced your company to join and apply them to any potential prospects.

The whole of Group participation is far greater than simply the sum of its parts. In your next Group meeting, let us know who we’re missing.

Thanks so much!

Larry Convoy
Lead Group Facilitator

You Make the Call, by Larry Convoy

We are just barely into the year 2016 and already I am hearing excuses as to why the credit manager cannot attend the industry credit group meetings to which they belong. They range from the receptionist is out to my controller wants me to stay and call customers.

Attending credit meetings provide your best Return on Investment by reducing bad debt loss, identifying slow paying accounts, and lowering your financial dependence on credit reports I contend that blindly calling a number in your system is more time consuming and less efficient.

Calling for dollars requires preparation

  1. Are you calling a specific person or a/p?
  2. Who is the person who controls the checkbook?
  3. Is there a gatekeeper blocking you?
  4. Have you previously left voicemails?
  5. Who does that person report to?
  6. How often do they cut checks?
  7. Are there orders in house or on hold?

A good group can identify numbers 1, 2 and 5 & 6. And supply a direct extension to avoid # 3. Number 4 tells you how important you are to them and you know #7.

I say it every month. Group Meetings are not social events for the credit manager, they are an attempt to maximize your company’s revenue. If you bring the names of past-due accounts that you will be calling for money to a meeting, I guarantee you that the information you receive will increase your percentage of recovery significantly.

You are now ready to call for dollars. You have all the facts you need and this should be resolved in one call. Feel free to contact me at lconvoy@emailcma.org if you’re not in a group and I’ll help you identify one that might be a good fit for you.

CMA Member of the Month, February 2016: Alexis Scott, CBF, Maltby Electric

Alexis Scott, Maltby Electric
Alexis Scott, Maltby Electric

An active participant in an Industry Credit Group is someone who attends meetings, shares best practices for the good of those in the group, submits their reports and gets useful information out of the meetings that they can take back to the office and make informed business decisions based on that information. Active participation is contagious, and the folks who tell us that they get the most out of the meetings are the ones who actively participate.

The February CMA Member of the Month is someone who personifies the term “ACTIVE PARTICIPANT,” whose involvement inspires others to continue to contribute to the Groups as well as the other educational offerings from CMA.

An active member of the Northern California Electric Group, Alexis Scott, CBF, of Maltby Electric has been active in the Group for more than six years.

She takes it upon herself to mentor others in the group, commonly sharing best practices with the Group whenever appropriate. In fact, several from that group approached CMA staff privately to commend her for doing that.

Alexis uses CMA’s construction forms filing services and other CMA services, and is a strong advocate for CMA’s educational programs and services, as she is a huge supporter of CMA.

On behalf of CMA, we thank Alexis for her participation, and we look forward to her continued support.

Members of the Month are nominated by CMA members, Group members, volunteers and CMA staff to highlight those members (or member companies) whose engagement with CMA has helped improve the overall credit profession for others.

For more information on how you can participate in any of the areas mentioned within this article, or to nominate any members for this honor, contact Diana Escobar at descobar@emailcma.org or 818-972-5300.