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...
Do You Have an Emergency Fund?
The other day when I was talking with some friends about our current economic situation, one of them mentioned that although they lost their job and their financial situation is stressed, for the time being they have several months of savings in their “emergency fund”...
Dear Crabby – Our Customer Paid With Turkeys
Dear Crabby, I’m the collection manager at an elevator maintenance, repair, and installation company. We’re a small organization but have been around for decades in a major metropolitan area. We’ve developed a reputation for servicing those small businesses that...
Take the Poll – Should you send a long-term customer, who Is unfortunately now past due, a holiday gift?
This is one of those difficult customer and human relations situations that can keep us up at night. There are many factors involved as we try to evaluate the past relationship and anticipate how things may turn out in the future. Personally,...
Fall May Be the Best Season for Hiring
As the summer comes to a close and everyone returns to their normal working routines, hiring managers are ready again to post jobs, schedule interviews, and shore up employment needs before the end of the year. There are a few factors that drive employment...
What’s the Difference between DSO and SDSO?
It was a long and hot summer in my neck of the woods, which fortunately was periodically interrupted by the occasional downpour and cloudy day. But now that it’s October, it won’t be long before we’re donning our winter coats, and for my generation, our galoshes....
Hector the Collector — Are Pre-recorded Collection Voice Messages Effective?
Hi Everyone! It’s Hector and I’m always pleased to receive your emails inquiring about collection ideas and issues. Over the past few months, I’ve been hearing from some of you regarding the use of automated pre-recorded collection voice messages to past due...
Take the Poll – As a credit professional, when was the last time you accompanied your sales professional on a client visit?
There’s no rule that a credit and/or collection team member should accompany a sales professional when visiting a client. I will say however, that the more credit professionals understand what is involved in their own sales process, the better...
The New Labor Force Is Getting Older and Better
Hope everyone had a real nice Labor Day holiday this year. It’s always a pleasure to meet with family and friends for an easy day of relaxation and enjoyable conversation. Among the many topics discussed is the fact that it's not uncommon for us baby boomers...
Asset-Based Lending vs. Factoring: What’s the difference?
From time to time our agency is requested to be the “back-up servicer” on asset-based loans that have become past due. The term, "back-up servicer,” is a nice way of saying “third party collection platform.” We are also at times the collection platform for factoring...
Dear Crabby — Our Salesperson Should Not Be Handling Client Complaints
Dear Crabby, I am the credit manager at a small digital design graphic arts company (where we all were several hats) and have been in this position for about 10 years. It’s a great field to work in as it’s constantly evolving with many interesting technological...
Take the Poll – Your customer just declared Chapter 11 bankruptcy but still needs your product ASAP to keep their line going. Do you:
It’s never easy dealing with a customer who has declared Chapter 11 bankruptcy. In contrast to a Chapter 7 bankruptcy, in which the business closes up, assets are liquidated by the bankruptcy trustee, and the proceeds from the business...
Whistle While You Work!
Last month CMI conducted a poll asking followers of its LinkedIn Company page to respond to how they keep distractions at a minimum at work. Somewhat surprisingly, 38% of respondents indicated that listening to music was their preferred concentration support method....
Quick Run Down on the Global Economy and Foreign Exchange Risks
With the global economy experiencing some very unusual developments, I would like to put on my basic economics hat and convey to you what I think is happening in the global economy and how to use simple foreign exchange risk strategies. But first, let me mention a...
