When You Must Bypass Your Customer and Go Directly to the End User
I always appreciate when clients reach out to me for advice or guidance on credit, collection, and other issues. As a credit risk management professional, I either try to help a client directly and/or introduce the resources that can support their needs. ...
Hector the Collector — Should You Call Out the Debtor When They Are Not Truthful?
Hi Everyone, It’s Hector and I hope all of you are now back in the saddle after a very enjoyable holiday season and New Year. Apparently, many of you didn’t waste any time getting on the phone with your past due clients, letting me know about some of the issues...
Take the Poll – Do you review customer credit limits every year?
As credit professionals, it seems intuitive that a credit limit review should be performed on a regular or periodic basis. If reviewing credit limits involves obtaining a fresh credit report along with other substantiating documentation,...
Happy Holidays 2023
https://www.youtube.com/watch?v=Ig5HxswQXkg
Taking Your Thanksgiving Holiday to a Whole New Level
Can you believe we’re already coming up to the end of the year and starting to plan Thanksgiving? Time goes by so fast and honestly, I feel like I’m still digesting last year’s turkey dinner! Year after year (and decade after decade), I still love having family...
Using Idioms on a Collection Call Can Backfire
Regardless of the language, even very fluent non-native speakers may not know the idioms and colloquialisms that native speakers grow up with and have heard throughout their lives. When you think about it, we are unconsciously hearing, using, and enjoying all kinds of...
Dear Crabby– My Overseas Customer Wants to Pay by Cryptocurrency
Dear Crabby, My name is Bernice and I’m the office manager at a small scrap recycling business. At first blush, scrap recycling probably doesn’t sound too exciting, but our specialty is the retrieval of large elevator motors and generators which contain...
Take the Poll – Are you still requiring letters of credit for your cross-border transactions?
Letters of credit (L/C) are still commonly used for cross-border transactions in international trade. As you may recall, an L/C is a financial document provided by a buyer's bank to the seller, guaranteeing payment for goods or services once certain...
Moulage Techniques Take Halloween Costumes to the Outer Limits
I was talking with a young person in my office the other day who mentioned that she is trying to learn some basic moulage techniques for her upcoming Halloween costume. Not having been a big participant of Halloween for several decades, I asked her what moulage...
A/R Put Options – They’re Really Easy-Peasy to Understand
With all my years in credit risk management, one product that has come up from time to time which has a confusing name is “Accounts Receivable Put Option.” When I hear the term “put option,” my mind thinks in terms of placing something somewhere....
Hector the Collector– Do Therapy Pets in the Office Help or Hurt Employee Performance?
Hi Everyone! It’s Hector and I hope the trees in your area have begun to show their autumn colors. Over by me, things are starting to become quite beautiful. Recently, I’ve been getting a lot of mail from readers who have told me about their company’s policy on...
Take the Poll – Do you think it’s a good idea to check the owner’s credit score as part of your credit due diligence on a company, especially if it is a small enterprise?
Performing a credit check on the owner of a small enterprise can be a prudent step in certain situations, but it's essential to consider legal and ethical aspects and to ensure that it's relevant to the business relationship. Here are some factors...
Summer Is Over and It’s Back to the Grind
Another Labor Day holiday has come and gone and with it, I’m reminded of my childhood when the dreaded thought of going back to school after a long and lazy summer was kind of depressing. First there was the need to get some new clothes and shoes, followed by...
How Far Would You Go to Collect an Unpaid Account?
There are so many factors that impact the collection of an account. The depth of the customer relationship, the balance due, the period of time outstanding, the communication style, and the distance from your company are just a few of the major items that will frame...
Dear Crabby– I Am Such a Good Credit Manager that I No Longer Have a Job!
Dear Crabby, I’ve been reading your column for several years and have always valued your advice, but I never thought I would actually need to write for myself. Let me start from the beginning. I have been working at my company for almost ten years....
Take the Poll – Would you decrease a credit limit if your customer informed you that they need to extend payment terms by 60 days?
This is one of those situations in which several factors are involved. For example, if the customer has been long term, has contributed substantially to your sales, growth, and profits, you probably don’t have much of a choice but to extend payment...
The Evolution of Sunscreen
When I was a teenager, playing around in the sun on the beach for long hours with my friends was always a wonderful time, except for one thing - I got terribly sunburned. As I got older, realizing that I could not subject myself any longer to painful sunburns and...
Beware of Related Party Transactions on a Financial Statement
In our July issue, the article, “Hidden Pension Liabilities May Be Hidden for a Reason” received quite a bit of readership traction. This in turn prompted me to talk about another neglected area on a customer’s financial statement, Related Party Transactions...
Hector the Collector – When a Long-term Customer Relationship Can Mask Prudent Collection Efforts
Hi Everyone! Hope all of you have been trying to stay cool in all the heat! It certainly has been hot, which can make collecting past due accounts more challenging. I heard from one agency collector about a long-term client who recently passed them a...
Take the Poll – Would you allow your third-party collection provider to collect for your debtor if it would facilitate receiving your payment?
There are many times when third party collection providers hear from the client’s debtor that the reason they haven’t paid is because they’re still waiting for their own outstanding receivables to be paid. Upon hearing this, on a case-by-case...
Bringing the Summer Season into Your Office
Summertime is one of the most challenging seasons to have an office job. While the fluorescent lights above your workstation may be giving you a dull headache, it's gorgeous outside. Add to that, your co-worker is on vacation and continuously sends you...
Hidden Pension Liabilities May Be Hidden for a Reason
As credit managers, from time to time we need to dig into a financial statement to understand a potential customer’s credit worthiness. In doing so, there may be a tendency to only look at the easily identifiable current assets and liabilities, sales, profits, and a...
Dear Crabby — I’m Often Left Out of the Resolution Process
Dear Crabby, I’m the credit and collection manager at a small company and we manufacture designer paper bags for wine bottles. Our bags come in all kinds of very fancy patterns and textures, and they look beautiful when someone gifts a bottle of wine in them. ...
Take the Poll – How valuable are trade references for your credit decision?
Trade references can be valuable in certain situations, especially in business-to-business transactions. A trade reference is essentially a recommendation or feedback from one business to another, providing information about the creditworthiness,...
Remembering a Father’s Devotion to His Son on This Father’s Day
You may recall the father and son marathon team, Dick Hoyt and his son, Rick, who became Boston Marathon legends after their first run in 1980. What was incredibly memorable was that Dick pushed Rick, who was a quadriplegic and had cerebral...
Should a Final Demand Letter Be Sent?
It’s so frustrating when our customer doesn’t pay, especially after we have fulfilled all of our obligations to provide the products or services with the utmost total customer satisfaction possible. Subsequently, when we start to get some payment delays, which turn...
Hector the Collector – Taking It Up the Transportation Claim Ladder
Hi Everyone, It’s Hector here and hope your summer has begun with a lot of nice weather. Recently, I received an interesting email from a well-known logistics carrier explaining a claim situation that kind of stumped me. Back in the Spring of 2022, goods were...
Take the Poll – How many times have your credit decisions been overridden in favor of sales?
When economic times get tight and companies are vying to take business from their competitors, there may be a tendency for credit decisions to take a back seat to sales, especially on a potential customer that truly is not creditworthy. At...
What NOT to Get Your Mother on Mother’s Day
It’s coming up to Mother’s Day again and for all those who still have their sweet and tender mothers (this also includes wives, grandmothers, mothers-in-law, and anyone who might fall into the “mother” category), trying to find that special gift can be a...
How Recession Proof Are Credit & Collection Positions?
Are credit and collection positions immune to the difficulties that a bad economy can often bring with it? In strong economies, when business is booming and customers have more than the usual amount of cash to pay their debt obligations on a timely...
Dear Crabby – I’ve Been Told My Gravelly Voice Is Not Good for Collections
Dear Crabby, I’m the collection person at our company and I’ve been employed here for decades. About two years ago I had an illness that kind of wiped me out and I was off work for several months. Although I made a complete recovery, there were some physical changes...
Take the Poll – You have overlooked a customer that you now realize is 75 days past due. Do you:
I was talking with a client recently and they mentioned how they misapplied a payment received from Customer A to Customer B. From time to time this happens in every organization, especially if company names are very similar. However, if Customer B...
Six Surprising Health Benefits to Gardening
It’s April and as I walk around the neighborhood, I’m enjoying seeing all the flowers coming up. First there are the daffodils, followed closely behind by the tulips. There is one house that always has a magnificent display of flowers throughout the spring, summer,...
Letting Friendships Override Credit and Legal Protocols
We recently received a claim for quite a large amount at about six months passed the due date from a regular client we have supported for many years. During our long relationship, I’ve become good friends with the credit manager who has worked at her...
Hector the Collector – Avoiding the Collection Puddles
Hi Everyone, It’s Hector here! Not sure what’s happening by you but in my neck of the woods, there have been a lot of April showers. The streets have become a little flooded, there are puddles everywhere, and the weather continues to be gray, drizzly, and cold....
Take the Poll – As a credit professional, have you ever asked your customer to provide a certificate of business insurance?
As per Investopedia, "A certificate of insurance is a document provided by an insurance company, agent, or broker to prove the existence of an insurance contract between the insurer and the insured. It includes such information as the name of the...
What Motivates Someone to Work for a Company for Decades?
During the past forty-seven years, CMI has had the honor of having several team members contribute to our success for three or more decades. Over this period, getting to know each of them professionally and personally has been extremely rewarding. Each one is highly...
How Often Do You Look at the Shareholder Loan Account on a F/S?
As credit professionals, there is a tendency to look at only the most familiar current assets and liabilities on the balance sheet of a prospective company. If the current or quick ratio turns out to be acceptable, we quickly move on to the next credit request. But as...
Dear Crabby – I’m Feeling Old and Out of It
Dear Crabby, I have been the credit manager at my company, a confectionary goods distributor, for the past 35 years and our customers are retail shops across the nation. Although I’m in my sixties, I still have a lot of energy and motivation to do my job....
Take the Poll – How Would You Rate Your Company’s Customer Service?
An associate of mine was telling me about the Customer Relationship Management (CRM) platform they implemented last year and all the problems they are having with it. But the biggest problem is the lack of customer service and technical support to...
Unusual Valentine’s Day Traditions Across the Globe
Like hundreds of millions of people around the globe, February 14th is your day to either receive a special gift, give some special flowers, or both. In the US and the UK, Valentine's Day means heart-shaped cards and heart-shaped boxes of chocolates. But what...
Are You a Credit Manager Who Could Work on a Commission Basis?
I had a fascinating discussion recently with a colleague of mine who was interviewing several candidates for their credit and collection manager position, and one of them was particularly intriguing. When the subject of compensation came up and the...
Hector the Collector – Does It Make Sense for Collectors to Share the Same Office Space?
Hi Everyone, It’s Hector here and as always, I greatly enjoy reading your emails. One email that really caught my eye was from a collector who works at a national office supply goods chain detailing the problem he is experiencing with the office set up and...
Take the Poll – From a credit perspective, how do you consider Goodwill on a customer’s financial statement?
Like many of you, I have heard of Goodwill but not really had a firm idea of what it is. Basically, Goodwill is an intangible asset that is recorded on the acquiring company's balance sheet under the long-term assets account. Goodwill is considered...
How Will Gen Z Affect Your Workplace in 2023 and Beyond?
First things first, let me wish everyone a very Happy New Year! Whatever holiday you celebrated, I hope you had a wonderful time with friends and family, and that you have lots of health and happiness in this New Year. As we enter the new year, I’m finding the...
Are Your Customers Still Filling Out Credit Applications by Hand?
A few years back I wrote an article, Avoiding the Pitfalls of an Outdated Credit Application, and one of the things I mentioned was the importance of maintaining updated information on your customer’s credit application. The impetus behind that article had to do with...
Dear Crabby – Our Customer Won’t Even Pay for the Products Received in Good Order
Dear Crabby, As collectors, we always strive to get all of the invoices paid in full. But, in the manufacturing business where you send pallets or shipments out on a daily basis, you are bound to have discrepancies. These discrepancies include shortages,...
Take the Poll – What was your biggest credit risk management regret in 2022?
I have always loved the song, My Way, when it’s sung by Frank Sinatra. That one line, “Regrets…. I’ve had a few….” truly resonates with me. On that musical note, several years ago I attended a wonderful workshop with credit and collection...
Happy Holidays from CMI 2022
https://youtu.be/sXtP544rMBw
Veterans Day Is Coming Up
Did you know that there are roughly 20 million American veterans in this country? Of this number, there are 6.4 million Vietnam War veterans over the age of 70. Many are not in such good condition, both mentally as well as physically. Sadly, there are many veterans...
