Industry Credit Groups: A Best Practice For Credit Managers
As industries become increasingly national, even global, credit managers find less opportunity to get together, network and exchange useful information. Fortunately, they can still gather at industry credit group meetings organized through the National Association of Credit Management (NACM). The managers meet monthly, bi-monthly or quarterly, in either local or national groups, depending on the structure of each industry and specific businesses involved.
Columbia, Maryland (PRWEB) February 9, 2006
As industries become increasingly national, even global, credit managers find less opportunity to get together, network and exchange useful information. Fortunately, they can still gather at industry credit group meetings organized through the National Association of Credit Management (NACM). The managers meet monthly, bi-monthly or quarterly, in either local or national groups, depending on the structure of each industry and specific businesses involved.
Participants most appreciate the chance for networking at a high level, with a valuable exchange of information. “Having a rapport with other managers in your own, or a related area, allows you to become familiar with one another,” says Jerry Hyman, Credit Manager at ISCO Industries, LLC in Louisville, Kentucky. “You will feel comfortable calling that person afterwards, to get a reference, or for an immediate answer to a credit question.”
“It is a fabulous networking tool in your industry, you get to know each other and familiarize yourself with common issues,” added Gerry Gilbert CCE, Corporate Director of Credit for BMC West Corp. of Issaquah, Washington.
While they build trust and cement relationships, the managers leverage off each other’s knowledge, which may touch on any number of the typical problems they grapple with daily. “In our group discussions, we learn to handle problems, such as non-sufficient fund checks, unauthorized charges on accounts, or tips on what to observe while making customer visits,” suggests Melissa Ballou, CCE®, Credit Manager and Controller at Ferguson Enterprises in Louisville, Kentucky. Other topics might include loan approvals, purchase orders, incomplete invoices or even data conversions for new collection software implementation. Reena Chow, VP/Division Manager at CIT Group/Commercial in Charlotte, North Carolina, values the contact information she acquires for reaching ‘gatekeepers’. She points out that a direct route to the right sources “saves legwork” in bypassing ranks of operators and assistants. Duane Schwartz, CCE, Credit and Collection Manager for The Tile Shop, headquartered in Plymouth, Minnesota, pointed out that experiences other trade group members have had with particular customers often provides him with invaluable insight. “What one member experiences with a customer, is quite likely the same experience I would have,” Schwartz said; “so you know what you’re getting into when you’re dealing with a particular customer.”
“I feel that we have a better ability to find out about our customers before it becomes public,” added Debi Grable, Credit Manager for Coast Crane Co. of Seattle, Washington. “If a member has received a bad check from a business entity, it alerts us to watch out for checks from that same customer.”
Discussions also turn to broader industry subjects, like recent bankruptcy code legislation. Expert speakers, including attorneys, credit agency representatives and CPAs add an educational flavor. “It might be expensive to hire them individually,” says Chow, “but as a group it is feasible to engage them.” The presentations are a way to brush up on hot topics in the members' industries, and may also provide new professional contacts.
In fact, often the information exchanged regarding specific accounts is worth the price of attendance, many times over. Laye reminds that, “when you can learn something about even one client, which guides you to take action to prevent a write-off, it more than pays for itself.” Larry Taggart, CCE, Corporate Credit Manager for Old Dominion Supply in Kensington, Maryland, gave as an example a member of one of his trade groups who saved almost $11,000 on an order that would have gone to a customer that was discovered to be having significant payment problems. “Membership in a trade group can prevent you from making mistakes that are far more costly than the cost of your membership,” he advised.
The process is straightforward. A couple of weeks before the meeting, members submit about 10-12 names as candidates for discussion. NACM contributes its bureau reports on those companies, while members add candid comments from their own experience. In many cases, the names chosen represent a problem (e. g., no payment), or a particular issue (e. g., incorrect invoicing). “Or sometimes the accounts are just so large, you want to collect as much information as possible on them,” says Chow. “If something goes wrong, you don’t want to be last in line to hear!”
Chow describes the accounts presentation as a “quick snapshot.” The data is reliable and timely, reflecting the current situation, as it has often been prepared the very day of the meeting, or shortly before. Ballou, who firmly believes that “character has a lot to do with credit,” appreciates another benefit: the collective descriptions sometimes add up to a more impersonal assessment of customers than she can make on her own.
In addressing specific customer information, groups must adhere carefully to antitrust regulations. A trained administrator from NACM is always present to monitor the interchange, and make sure that participants do not inadvertently cross boundaries. Before the meeting starts, the administrator reads the rules aloud, and members sign an agreement to abide by the guidelines. Conforming to these guidelines helps group members minimize the potential of violating antitrust regulations.
To comply with the regulations, members avoid discussion of any future activities. “We stick to historical facts; those that could be proved by either our own computer records or documentation from an attorney,” Hyman specifies. Other restricted activities are any discussion of payment terms, or libelous or inflammatory remarks.
Between sessions, the grapevine remains active. NACM sends out “flash reports” by e-mail to notify group members of any sudden adverse developments among the customer base. “For example, we might hear that one of our competitors has put an account on hold,” says Bruner. “That way, we will be forewarned if they suddenly come to us.”
“The groups are altogether one of the best tools we have,” concludes Dave Tilford, CCE, Corporate Credit Manager at Plumbers Supply in Louisville, Kentucky, who has attended various national and local groups since 1964. “I am absolutely sold on them, for the networking, information and education they provide, as well as the long lasting friendships we make from our meetings.”
“I don’t really know how people even function without going to trade group meetings,” added Janet Moo, CCE, of Stock Yard Meat Packing Co. in Seattle, Washington, who has been attending her trade group meetings for 20 years. “Often you get information that isn't public knowledge.”
The National Association of Credit Management (NACM), headquartered in Columbia, Maryland supports more than 25,000 business credit and financial professionals worldwide with premier industry services, tools and information. NACM and its network of Affiliated Associations are the leading resource for credit and financial management information and education, delivering products and services which improve the management of business credit and accounts receivable. NACM's collective voice has influenced legislative results concerning commercial business and trade credit to our nation's policy makers for more than 100 years, and continues to play an active part in legislative issues pertaining to business credit and corporate bankruptcy.
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Norma Heim
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