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...
It’s April and I’m Getting Hit with a Bit of Tulip Mania!
It’s April and tulips all over the world are coming up. In my front and back yards, I’ve been monitoring my sweet little darlings since it became unusually warm in February. Now at the beginning of April, they are about one week away from blooming. Last October,...
Will My Credit Position Be Eliminated by AI?
My grandkids love to tease me about how technologically behind I am. While they can type on their tiny smart phone keyboards at a speed that would rival a concert violinist, my fat fingers can barely plunk out a text message without several mistakes. Although I’ll...
I’m a Credit Manager Who Also Drives a Forklift in the Warehouse
Dear Crabby, I’m the controller / credit manager / accountant and all around cleaner upper at our very small beer and wine distribution company. We import very specialized craft beers and wines from all the world and have hundreds of customers throughout the...
Take the Poll –If your customer was not responding to your requests for payment and was located very close by, would you make an unannounced visit to talk to the person in charge?
My personal feeling is that if you have a non-paying customer that is ignoring your calls, emails, and letters requesting (demanding) payment and they are very close by, it may just make sense to do a stop by and see if you can talk to...
Is the Term “Daylight Savings Time” a Misnomer?
One of the only reasons I happen to like March is because of Daylight Savings Time. Finally, I feel like with the extra daylight, we’re getting out of winter’s grip. Not that this winter in my neck of the woods has been so terrible, but it’s not one of my...
Zombie Bankruptcies in 2023 Set New Records
Like many of you in our industry, I often read through a great deal of economic data and indicators to get an idea of where the country is headed, and how the economy affects our credit and collection decisions. According to the American Bankruptcy Institute,...
Hector the Collector — Is It Acceptable to Call a Debtor from a Personal Cell Phone?
Hi Everyone, It’s Hector here and as we come to the end of winter, hope all is well. As always, your emails and letters continue to interest me. I received one email from a credit manager that asked for "my thoughts” on a collection situation that appears...
Take the Poll – How many credit granting decisions that you made last year resulted in not getting paid?
I have a client that has 500 active accounts at any given time and the credit manager has to make decisions very quickly with credit information that is often not up to date. As a result of the time pressure of his job, he estimates that during the...
Did You Send Your Client a Happy Ground Hog Day Greeting?
It was 8:30am on Friday, February 2nd, and while I was sipping my coffee in the office gearing up for a busy morning, I received an email from one of our suppliers wishing me a very Happy and Healthy Ground Hog Day! When I saw it, I did a double take! This was the...
Do Credit Managers Have What It Takes to Do Sales?
I have heard and been told that credit risk management professionals don’t really have a sales professional's spirit. The idea of getting out into the unknown and trying to sell ourselves and our company’s products or services seems uncomfortable. In fact, I’ve come...
Dear Crabby – Our Company Is Still in the Stone Age
Dear Crabby, After 20 years, I continue to run the office at a mid-size pottery manufacturing company, which has been in business since 1971. We are very proud of the 30 artisans, who create personalized and customized pottery and ceramic products. In...
Take the Poll – What keeps you up at night regarding your credit & collection position?
In the early days of CMI, I can tell you that for years I worried about certain debtors keeping their promises to pay. I would wake up at 3:00am and get on the computer to read over the notes I made a few days before just to make sure that I didn’t...
The Mistakes of 2023 Just Might Be Your Best Gift for 2024
Can you believe it’s already 2024? Where did the time go? It was just 1964 when the Beatles came to the US for their first tour. I was a teenager back then and like all teenage girls, I was totally entranced with the look, the sound, and the swagger that the Beatles...
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...
