Tough Love in Credit Risk Management — Just Like Mom Taught Us!
Mother’s Day reminds us that real love isn’t about saying ‘yes’ to everything — it’s about knowing when to say ‘no’ for someone’s own good. In credit risk management, tough love isn’t just necessary, it’s the heart of protecting both customers and companies. Setting...
Seeking a Director of Global Credit Position? Your Resume Must Reflect a Stellar Experience!
If a credit risk manager is aiming for a Director of Global Credit role at a multinational company, the resume needs to do a lot more than just check boxes. It should tell a story that projects global leadership, strategic foresight, and deep operational experience....
Dear Crabby — Why Should I Tag Along with the Sales Manager?
Dear Crabby, I am the credit risk manager at a small manufacturing company that manufactures all kinds of industrial springs. I’ve been working here for about two years and overall, I have been working in credit and collections for over twenty years. Although I...
Take the Poll – What is your biggest concern regarding customer risk over the next 12 months?
As credit risk professionals, we're trained to make decisions based on patterns using financial metrics, payment histories, and macroeconomic indicators. But in today's environment, the patterns are breaking down. Many companies find themselves...
What Do an Easter Egg Hunt and Credit Risk Management Have in Common?
At first glance, Easter eggs — a symbol of fun, mystery, and childhood delight — seem to have little to do with the serious world of credit risk management. However, when we step back and ponder these two activities more deeply, intriguing similarities begin to...
How Can a Credit Manager Turn Their Department into a Profit Center?
One of the most frequent complaints I’ve heard over the years from credit risk managers is that they don’t feel appreciated for their hard work in trying to increase cash flow and minimize the risk of selling on credit. In fact, as time goes by, some credit...
Hector the Collector — Changing Course After 25 Years in Collections
Hi Everyone, As always, I greatly appreciate your emails, especially when they mention how someone would like to improve and expand their professional goals. One email came from a middle-aged collector at an agency here in the US regarding his employment. After 5...
Take the Poll – With tariffs in full swing, are you tightening credit on foreign and/or domestic customers?
When a broad tariff policy — like Donald Trump’s recent across-the-board tariffs — is implemented, it suddenly forces credit managers in the U.S. to navigate new challenges in evaluating credit risk on their international customers. For example,...
How the Sidelining of the CFPB Will Impact Businesses
It has certainly been quite the whirlwind over the past several weeks with many new changes in our regulatory agencies. One change that has hit close to my credit and collection home has to do with the sidelining of the Consumer Financial Protection...
Do You Check the Authenticity of Letters of Credit?
To be expected, as the use of AI continues to advance through the entire global business community, there is also an increase in the creation of forged Letters of Credit. A forged Letter of Credit (LC) is typically created to deceive a supplier into...
Dear Crabby — I’m Dealing with Multiple Collection Personality Disorder
Dear Crabby, I am the credit and collection manager at a small logistics company. I’ve been working here for about one year and as a small company, I find myself wearing several multi-ethnic hats that are making me slightly unbalanced. Let me explain. I am an older...
Take the Poll – As a Credit & Collection Professional, when should you get your sales representative involved in collecting a past due account?
As a credit and collection professional, getting your sales team, manager or representative involved in the collection of a past due account can range anywhere between successful to disastrous. Following below is a general guideline as to when it...
How Will Tariffs impact Commercial Claims?
I don't profess to be an economist. In fact, like many credit professionals, my focus is primarily on the credit and collection problems directly in front of me. However, in the back of my mind is the accumulation of all the news and opinions I’ve been hearing from...
Which Pathways to the C-Suite Should a Credit Manager Pursue?
Over the course of my credit and collection career, I’ve observed the careers of hundreds of credit professionals. Some may enter a client’s place of business as a high school graduate and slowly work their way up to becoming the credit and collection manager. Others...
Hector the Collector — When Debt Collection Calls Are Not Recorded
Hi Everyone, It’s Hector and as always, I greatly appreciate receiving many wonderful emails from readers asking for my thoughts and guidance. Last month I received a rather concerning email from one in-house collection manager, I’ll call Joe, who was confronted...
Take the Poll – As a Credit Professional, what is your biggest regret regarding your career in credit?
At a recent conference, I was invited into a group of other long-term credit professionals to discuss what we felt were some regrets in our long careers. Following below are the major ideas I took away from our discussion.Overlooking Relationship...
Will You Be Celebrating “Quitters Day” this Month?
I was talking with several relatives on New Year’s Day about my New Year’s resolutions and from their reaction, I guess my list seemed over the top. Since I like adventurous activities, which includes wall climbing, a few of them suggested...
Extending Credit to a Customer that Was Rejected by Credit Insurance
A client of mine was recently talking to me about one of their customers who had been covered under their credit insurance policy, but coverage was suddenly cancelled due to negative financial information that came to light. According to my client, they have been...
I Greatly Reduced DSO but My Year End Bonus Didn’t Reflect this Achievement
Dear Crabby, Hope you had a nice New Year holiday. I wish mine had been better -- I was in a bad mood. Let me explain. I am the new credit and collection manager at my company and started one year ago. In just one short year, I reduced our DSO from 75 days...
How the “January Effect” Impacts Credit & Collections
The "January Effect" is a well-known financial market phenomenon referring to a seasonal increase in stock prices during January, often attributed to year-end tax-loss selling, portfolio rebalancing, or increased market optimism. While it primarily impacts investment...
Take the Poll – Who at your company approves your credit & collection goals for the year?
As a credit risk management professional, aligning your credit and collection goals with the objectives of your organization is essential for a cohesive and effective approach. Depending on the company size and leadership hierarchy, here’s a general...
Happy Holidays From CMI 2024
https://youtu.be/71-qqxia6CA
Inviting a Stranger to Your Thanksgiving Dinner
One of the most heartwarming Thanksgiving stories is the one about Wanda Dench and Jamal Hinton, often referred to as the "Thanksgiving Text Mix-Up." It’s an example of how unexpected friendships can begin and the spirit of Thanksgiving. In 2016, Wanda...
We Have a New Collector and His Name is Rover
About one year ago, one of our clients asked us to help them interview candidates to fill the position of in-house collector for their commercial claims. They had received over two hundred resumes and in reviewing them, there were about two dozen candidates...
Hector the Collector — How Do You Know If It’s Worth Suing Your Debtor?
Hi Everyone, It’s Hector and I hope you all had a nice Halloween holiday. It won’t be long now before we go from eating a lot of candy to chowing down on some delicious turkey for Thanksgiving. In the meantime, I continue to receive wonderful emails from many...
Take the Poll – If you were the newly hired Director of Global Credit, would you:
Newly hired executives often choose to fire existing team members and bring in people they have previously worked with for several reasons. Here are some of the key motivations behind why a new executive manager will remove the existing team....
The Legend of “Stingy Jack”
I can’t believe how fast the summer flew by! But here we are in October and the leaves are turning all shades of yellow, orange, and red before finally falling to the ground leaving a huge mess for me to rake up around the house. At the end of the month, it’ll...
Untangling a “Who’s on First” Collection Knot
If you’re a baby-boomer and older, there’s no doubt you’ve seen the "Who’s on First?” comedy skit between Bud Abbot & Lou Costello several times when you were growing up. They certainly brought out a lot of laughs with their silly antics. At least they did...
Dear Crabby — My Collector’s Speaking Style Makes Me Cringe
Dear Crabby, I’m the credit manager at a liquor wholesaler and have been at my current company about eight years. Liquor wholesale distribution means that we sell to retail liquor stores, mom and pop convenient stores, some smaller supermarket chains, and to other...
Take the Poll – In the current employment market, to what extent do the credentials CCE, CBA, CICP, or MBA help someone to advance in their credit related career?
Whenever I have been asked to participate with reviewing resumes for clients to fulfill a credit manager position, my eyes will always look for the credentials CCE, CBA, CICP, or MBA as a starting point. It lets me and the employer know that at...
When Young People Don’t Understand Money & Credit
As schools begin across the country, I was talking with a few acquaintances about their children, some of whom are still in high school and others who are beginning college. One parent mentioned that they have their child on a “tight leash” when it comes to money and...
A Credit Manager Forced to Work with One Hand Behind Her Back
In my many travels as a credit risk management consultant, I’d like to share an interesting collection situation that came across my desk. Several months ago, I was contacted by an Intellectual Property law firm which has been in business for several decades. Their...
Hector the Collector — Just How Far Should We Extend Empathy to a Debtor?
Hi Everyone, It’s Hector and I hope you all had a real nice summer. Mine was very nice but went by way too fast. Fortunately, in between the office and the beach, your emails kept me busy. Among the correspondence was one inquiry about how to deal with a debtor (owner...
Take the Poll – If you are an in-house or third-party collector, what is the most satisfying thing about your job?
I remember when I was just starting out as part of the CMI collection team (there were just two of us) and my portfolio of accounts contained mostly small balances. Fortunately, by nature of being small, they were relatively easy to collect. That...
Using AI to Fight Against Credit Card Fraud
A couple of months ago I received a letter from a performance ticket outlet letting me know that they incurred a data breach and that my personal information may have been compromised. The personal information not only included my name and basic contact details, but...
My Short List for Evaluating a Candidate’s Resume for Credit Manager
From time to time, I am asked to help a client evaluate candidates for their open credit and/or collection positions. I feel very fortunate when I am requested to do this because I believe it reflects a deep level of trust between my client and our firm, and...
Dear Crabby —The Owner’s Son Keeps Overriding My Credit Decisions
Dear Crabby, I’ve read your column for years but never thought I would be writing to you myself. But here I am with a problem and not sure how to handle it. I am the credit and collection manager at a small business that sells furniture to restaurants and bars. The...
Take the Poll – As a Credit Professional, which task takes up most of your weekly time?
When I first started out, I did a lot of collection work but as the years passed and the clients and claims increased, my collection experience supported the hiring, training, and managing of additional staff. For quite a long time, my weekly and...
My Father Is “Director of Bubble Wrap Popping”
Last month’s article, “A Young Man’s Nursing Home Journey,” resulted in many readers leaving comments and contacting me with their own stories. So many of you have had very heartfelt experiences in taking care of a loved one. They really touched me. One lady,...
How a Foreign Creditor’s Documentation Can Lead to an Unpaid Account
A couple of months ago I received a claim from a creditor in China. The creditor is a marketing research consulting firm, and they performed various focus groups on behalf of a beverage manufacturer in Pennsylvania that was trying to enter the Chinese...
Hector the Collector — Are you a Collection Rising Star, Cash Cow, Question Mark or Dying Dog?
Hi Everyone, It’s Hector here and I hope you’re enjoying your summer. Mine has been busy reading and answering many of your emails concerning all kinds of credit and collections issues and challenges. One email reflected my own life story as a...
Take the Poll – Has inflation impacted your credit protocols?
For the past few years, inflation has been a very concerning topic for most of America, including hundreds of thousands of businesses. Depending on the industry, inflation has brought some companies to the brink of...
A Young Man’s Nursing Home Journey
At the end of last month, I attended my granddaughter’s high school graduation. Naturally, I am very proud of her and all that she has accomplished during her four years. As she prepares for college in the fall, I’m excited to see her future unfold in many promising...
The Credit Report Mystique
When it comes to obtaining credit information on privately held companies where financial information is often carefully guarded, the quality of the information in a report should be treated with some level of skepticism. As we have often seen, there can be a huge...
Dear Crabby — My Snarky Reply to a Debtor Really Backfired
Dear Crabby, I am the credit and collection manager at a plastics recycling company and have been here for about 15 years. Our company buys all kinds of scrap plastic and after putting it through our recycling process, we sell it as raw material to other...
Take the Poll – How would you feel if the credit override was only about 20% of the amount you originally granted to the customer?
As credit professionals, from time to time our credit decisions have been questioned and overridden. Sometimes the credit limit that we established for a new or existing customer has fallen short of expectations or needs. When that happens, either...
Six Mothers Whose Inventions Changed the World
As I was making some minor adjustments to our home security system recently with my grandson, he mentioned that the first home security system was invented by a woman. I said to him, “How do you know something like that?” He responded that his 7th grade history class...
Giving a Birthday Gift to a Past Due Customer
I have a client who has always sent a birthday gift to his customers as a way of showing his appreciation for their business. The client currently has about 100 customers, which means that he will send a gift to about 9-10 customers per month. The expense of the...
Hector the Collector — Idioms on a Collection Call Can Cause Confusion
Hi Everyone! It’s Hector and as always, it’s wonderful to get your emails about your joys and challenges of collecting. I recently received one email from a gentleman, I’ll call him Ted, who has been struggling with his accent during collection calls. Ted is 45 years...
Take the Poll – How many times have you relied on a credit report that turned out to be misleading?
Credit reports are not perfect and in fact, they may often contain information that is either erroneous, obsolete, or misleading. In my experience, the best credit information is information that is verifiable, and one of the best ways to obtain it...
