Why Credit Managers Must Understand Supply Chains
As credit professionals, most likely we are rarely thinking in terms of global supply chains. Conversely, our natural focus is on how much credit to approve and are customers adhering to our credit and payment terms. That said, if you were trying to buy a car...
Hector the Collector – When Customers Short Pay Your Invoices
Hi Everyone! It’s Hector and over the past couple of months I’ve been hearing from you regarding more than the usual share of short pays on your invoices. Let me take a moment to recap the Short Pay problem and offer some solutions. Short Pays, Short...
Take the Poll – Are you still sending invoices out by snail mail?
I suppose that at first blush, it makes more sense to send out your invoices by email. The time and cost to print-up and send these out, especially a large number of them, is neither efficient nor effective in comparison to sending by email. However,...
Burying Your Credit Head in the Sand
One of the nice things about my day-to-day activities is lending an open ear to my clients and staff. Recently, I was talking with the credit manager of a new client who was placing some claims with our office. One of the claims, a sizable amount, was...
Dear Crabby – What Is the Appropriate Halloween Credit Costume Guideline?
Dear Crabby, I’m the credit and collection manager at a mid-sized fragrance manufacturer and like many managers, beyond the usual credit and collections challenges, I also deal with a myriad of human relations issues. So, it’s that time of year again when...
Take the Poll – Have you ever been called about a Zombie Debt?
You may be asking, what on earth is a Zombie debt? Like the name implies, it’s an invoice or a debt for a personal charge that you thought was paid off but comes back to life to haunt you! More specifically, Zombie debts include: debts you...
Sometimes It Pays to Bypass the Credit Reporting Bureau
One of the most uncomfortable situations for many SME’s has to do with divulging their detailed financial information, whether it be to a credit information and reporting bureau (CRB) or directly to their supplier. A colleague of mine and I were talking the...
When a Team Member Goes Off Course
Hi Everyone! Hope you all had a wonderful summer and took some badly needed vacations. I was informed from one collector, Ms. A, at a mid-size stationery company, about a very interesting summer vacation planned by one of her team members, Mr. B. Here’s what...
What do you think?
It’s frustrating when payment agreements are not upheld but it’s also important to recognize that as a company struggles to make good on the obligation, at least a payment agreement usually shows initial good faith. Here are my thoughts about when...
With Pandemic Bankruptcies on the Rise ↑ What You Need to Know
From majestic entertainment giants to world famous department stores, the coronavirus devastated certain parts of the U.S. economy. Falling consumer demand and reduced pleasure spending took its toll on many areas of the retail industry, along with its endless...
Dear Crabby – I Received a Souvenir from My Past Due Customer
Dear Crabby, I’m the credit and collection manager at a small scrap and metals processing company. We basically buy old industrial electric motors and disassemble them for the copper, silver, titanium, and other precious metals. We’ve had a long-term client, who...
What do you think?
This is an age-old credit and collection question and one that doesn’t often have a one size fits all answer. Some creditors might stand by their customer's difficulty and try to help them out in depth because of the long-term relationship,...
Social Media is an Indispensable Credit Risk Management Tool
For many credit professionals, LinkedIn and Facebook may not be usually viewed as sources of important credit risk management information. When it comes to LinkedIn, it is often perceived as being mostly about finding new clients, a new job, or prospective employees....
Hector the Collector – Keeping Your Cool in the Heat
Hi Everyone! Although most people are having fun in the warm weather, I heard from one colleague about how the excessive heat and the lack of air conditioning at their office resulted in exacerbating an already difficult collection situation. Let me recant the...
What do you think?
When we hear the term, “statistics,” we might be taken aback a little bit because it conjures up highly sophisticated mathematics — something we’re not always so comfortable with. However, almost every day we come face to face with simple statistics...
Are You a Credit Professional Planning to Negotiate a Pay Raise?
A colleague of mine who is a credit professional at a mid-sized beverage wholesale distribution company was recently asking me for some advice about requesting a raise from his employer. He felt that since his job duties were considerably increased during the...
Dear Crabby — I Uncovered a Questionable Trade Reference
Dear Crabby, I have an interesting scenario to share with you. A month ago, I received a new credit application with an unusual looking company name. At first blush, the company looked good as I began the credit risk evaluation. This new customer was requesting...
What do you think?
Whether sales should be involved in collections is still one of the most difficult balancing acts around. As a rule of thumb, salespeople should be aware of their customer’s payment status. Depending on the reason for the past due situation,...
The Right of Set-Off, a Major Pitfall in the Suit Process
When a debtor has his funds in a bank account at an institution to which they owe money, for example on a working capital loan, that institution may have the right under state law to seize any funds from the debtor's checking account, money market, or other related...
Hector the Collector — Trying to Return to Pre-pandemic Credit Standards
Hello Everyone! I hope all is well and that your businesses are turning around. Like you, I’ve been watching many of the economic indicators and with the unemployment rate trending downward, I suppose one can start to feel encouraged that we are slowly...
What do you think?
I’ve been hearing from some credit professionals informing me they have been assigned to take over another department, letting me know who to contact in the future. Depending on the size, product or service, and other factors, a few of the credit...
Beware of Nicknames on a Credit Application
Over the years when we receive claims, I’m always delighted to see a signed credit application attached and completely filled out. As we know full well, the credit application is the initial contractual document by which the terms and conditions are established. It...
When a Family Member Becomes Our Debtor
Dear Crabby, I’m glad there’s someone like you to talk to right now because I have a touchy problem at work and I'm not sure how to manage this delicately. First, a little background. We’re a small business of about thirty employees with a long history in our...
What do you think?
The answer to the above choices is probably that there is no one real choice. It depends on many factors that include: Size of the company and the role you playParameters and nature of your job responsibilitiesType and volume of business that the...
What’s the Best Route to Choose on International Claims?
One of the most difficult parts of being a global credit manager is that trying to find an overseas collection agency or law firm can be daunting. The biggest question that often comes to mind is, “Can this entity be trusted.” Unfortunately, there are many unsavory...
Hector the Collector — Turning on the Light in Difficult Times
Hi Everyone! Normally, March and April are kind of quiet collection months. If a lot of snow has fallen up north and the weather has been nice down south, most businesses, especially seasonal ones, have managed to do fairly well. Unfortunately, this year we’ve been...
What do you think?
What’s the range of the average salary for a credit risk manager in the U.S.? $60K - $80K$80K - $100K$100K - $120KOver $120K According to the website, Salary.com, the average Credit Risk Manager salary in the United States is $121,703 as of January 29,...
Life After Credit & Collections
I periodically speak to credit and collection professionals who are heading towards retirement and wondering, “What do I do now with my life?” For starters, the longer we credit professionals work in our field, the deeper and more diverse our expertise...
What do you think?
How valuable would it be to serve on the Committee of Unsecured Creditors? ExtremelySomewhat Not so muchNot at all With bankruptcy filings up by more than 25% during this past year, and surely with many more to come in the near future, an increasing number...
Dear Crabby — I’m Wearing Too Many Hats at My Company
Dear Crabby, Like many companies, ours has also had to let people go during these tough times, and several departments are now running on a skeleton crew. Up until around mid-summer of last year, I was carrying out credit functions and some high dollar collection...
Serving Up a New Credit Risk Management Recipe
I received a call in early December from a client who wanted my feedback on a new sales terms arrangement they were discussing with one of their customers for this new year. Our client is a mid-sized manufacturer of a unique plastic...
Hector the Collector — To What Extent Do We Help a Customer in Trouble
Hi Everyone! It’s Hector and I hope you had a nice New Year holiday. No question that last year turned out to be “annus horribilis,” but I hope you’re raring to tackle all the challenges and achieve many great things throughout this coming year. Over the past few...
What Do You Think? — How valuable is an MBA these days?
How valuable is an MBA these days? ExtremelySomewhat Not so muchNot at all I read an interesting article recently on whether or not a Master’s in Business degree is really as lucrative or as educational as it used to be. Certainly, there’s always great...
Rockin’ Around The Christmas Tree
https://youtu.be/pb6WMnOrVlk Happy Holidays From CMI!
Avoiding the Pitfalls of an Outdated Credit Application
One of the things I enjoy doing is sharing the challenges that some of our clients are experiencing. By learning from their issues is how we continue to be a work in progress, avoid the same mistakes, and improve on the performance of our credit risk management...
Dear Crabby — I’ve Been Told to Go Cold Turkey on Certain Collection Calls
Dear Crabby, I’ve been reading your column now for the past few years and as a credit & collection professional at a small distribution company, I’ve always found your advice to be spot on. That said, I never thought I’d actually be writing to you. Recently...
Take a Guess!
In 2019, what was the average per capital consumption of turkey in the U.S.? 5.5 pounds11.2 pounds16.1 pounds7.8 pounds21.3 pounds Today’s consumer recognizes turkey’s nutritional value and enjoys turkey year-round – not just during the holidays. The turkey...
Does It Makes Sense to Change Jobs During this Period?
Last year after I wrote the article, What I Look for in Choosing a New Credit Manager, I have continued to receive inquiries from credit professionals asking for my thoughts, especially in this economy, about changing jobs. Bearing in mind that I’m not...
Hector the Collector — Timing is Everything
HI Everyone! It’s Hector and I’m always pleased to hear from credit professionals out there. I’m glad that many of you are adjusting to your new home offices and that your work is continuing to move along. Regretfully, I’ve also been hearing from some of you who...
What are your thoughts?
Which financial ratio is the most important to you in analyzing financial statements? Working Capital RatioQuick Ratio Gross Margin PercentageProfit Margin PercentageInventory Turnover Rate We credit professionals are finding that in these tough times it...
When the Customer Puts a Specialty Goods Shipment on Hold
I received a call the other day from the president of one of our clients to get my thoughts from a credit and collection perspective on what to do with a shipment that their customer put on hold. Our client, a specialty plastics film manufacturer, received an order...
Dear Crabby — We’re Losing Customers Left and Right
Dear Crabby, I’ve been reading your column for a long time and I can’t believe I’m actually writing to you. But here I am and I’ve got a big problem. As the credit and collection manager for a small wholesale distributor (there are only six of us at the company), it...
What are your thoughts?
How much can a company save per year when letting an employee work from home? $3,000$6,500$7,500$9,000$11,000 According to current data compiled and published by the marketing firm, Review42, $11,000 is how much companies can save annually for each employee that...
Getting the Basics of the Creditors Committee in Chapter 11 Cases
As most of you have already noticed, bankruptcies are on a dramatic rise. According to the American Bankruptcy Institute, it’s estimated that in 2020 there will be about 7,300 total commercial filings. This is a 30% increase over 2019, in which there were 5,519...
Hector the Collector — Ding Dong ….. “Anybody home?”
Hi Everyone! It’s Hector and I’ve been hearing from a few of you regarding what to do with onsite visits to your customers during this pandemic. During our pre-pandemic days, from time to time when a commercial customer became delinquent, the sales or...
What are your thoughts?
Are Americans’ Credit Card Balances: • Increasing • Decreasing • Staying about the same According to current data from the Federal Reserve) revolving credit debt has declined for the third month in a row. Specifically, revolving credit debt dropped to $995 billion in...
Are Personal Guarantees Making a Comeback?
Not to sound cliché, but extraordinary times call for extraordinary measures. With the economy struggling, and even customers that we thought were “built to last” experiencing tight budgets and cash flow problems, we never know who the next serious past due account...
Dear Crabby — My Teenager Got Hold of Our Customer Data
Dear Crabby, I’m the accounting and credit manager at a mid-sized shipping company and over the past few months, almost all the staff are working from home. In view of keeping safe and well, working remotely has been both a blessing and a curse. I have three teenage...
What are your thoughts?
Which sectors are on target to surge during this pandemic? Light Consumer ManufacturingHeavy Equipment ManufacturingAgricultureGamblingRetail Alcohol Beverage To say the COVID-19 pandemic and its ensuing lockdown have caused a considerable hole in the world’s...
The Post Pandemic Credit Manager’s Role
Like many of you, I’m taking several deep breaths as the business community carefully moves forward from a self-imposed 2-3 month hibernation. Stepping out carefully to adhere to the working normal, we are grateful for still being able to fully support our clients for...
