http://creditmanagementassociation.org/forums/ Sponsored by Credit Management Association en-US Sat, 04 Feb 2012 21:21:18 +0000 http://bbpress.org/?v=1.0.2 q http://creditmanagementassociation.org/forums/search.php http://creditmanagementassociation.org/forums/topic/319#post-1238 Sat, 04 Feb 2012 01:02:34 +0000 Susan Nakama 1238@http://creditmanagementassociation.org/forums/ <p>I know there are rules on the times of the day that collection calls can be made. Can someone provide me with the specific guidelines for the different time zones? Also, are the rules different for fax and email. Are there different rules for sending out statement with and without notes regarding past due invoices. For our business, it would be a B2B transactions. </p> http://creditmanagementassociation.org/forums/topic/317#post-1237 Thu, 02 Feb 2012 22:51:46 +0000 CreditMaestro 1237@http://creditmanagementassociation.org/forums/ <p>THanks, Rita! </p> http://creditmanagementassociation.org/forums/topic/318#post-1236 Thu, 02 Feb 2012 18:43:52 +0000 F Scott Wilson 1236@http://creditmanagementassociation.org/forums/ <p>Is this for a resale certificate? If so, I wouldn't be concerned, since it is probably the *business* that has the certificate, rather than the owner. If not, and everything else matches, I would call the owner and find out why there is a difference. </p> http://creditmanagementassociation.org/forums/topic/318#post-1235 Thu, 02 Feb 2012 18:34:31 +0000 Jamie Garett 1235@http://creditmanagementassociation.org/forums/ <p>Owner name on applicaiton does not match State Sales Tax. The name of the business and address matches, but not the owner. How do you handle this kind of situaton? </p> <p>The owner is matching on other forms of verification documents. </p> http://creditmanagementassociation.org/forums/topic/317#post-1234 Thu, 02 Feb 2012 16:42:40 +0000 Rita 1234@http://creditmanagementassociation.org/forums/ <p>I have in the past held a similar position Customer Support Consultant (high tech industry) which entailed handling the order entry and any modifications to the order from the customer from the sales department and on through to the final collection.</p> <p>This was to provide a full one stop service to the customer. I handled the order entry but also qualified the customer for the order and subsequent collection activity. I found this challenging but at same time enjoyed the variety of the position. </p> <p>The key is communication with both sales and customer</p> <p>Rita </p> http://creditmanagementassociation.org/forums/topic/317#post-1233 Thu, 02 Feb 2012 01:12:23 +0000 CreditMaestro 1233@http://creditmanagementassociation.org/forums/ <p>I have presently started a new job in the capacity of Order to Cash Manager which is a bleinding of Customer Service Manager and Credit/Collections Manager all under one umbrella. I was wondering if there was anyone else in the CMA community with the same title? </p> <p>Although we have similar concerns as a dedicated credit manager, the new objectives I have also include a strong sales/customer service component. i realize I am in the vanguard but is there anyone else out there who is wearing the same hats and thus encountering the same challenges?</p> <p>Thanks,<br /> Jerry Abramowitz, CCE </p> http://creditmanagementassociation.org/forums/topic/315#post-1232 Tue, 31 Jan 2012 18:53:18 +0000 F Scott Wilson 1232@http://creditmanagementassociation.org/forums/ <p>In one or two instances, with a long-standing customer, we have done asset searches. These aren't cheap, but will tell you whether getting a personal guaranty, or renewing one in the case of a new owner or partner, is worth the effort. The cost is usually $1K or more for something really comprehensive, so it won't fit most situations. Asset searches can find property that an individual credit report may not find, such as business assets in the person's name, business property, property or stakes in another company, and so forth. Again, pricy but worth it if you need it. </p> http://creditmanagementassociation.org/forums/topic/315#post-1231 Thu, 26 Jan 2012 21:36:26 +0000 DMarc CBA 1231@http://creditmanagementassociation.org/forums/ <p>If you're going to rely on a personal guarantee, you may also want to request a personal financial statement to see what if any assets there may be to attach in case things go south. </p> http://creditmanagementassociation.org/forums/topic/314#post-1230 Thu, 26 Jan 2012 21:30:01 +0000 DMarc CBA 1230@http://creditmanagementassociation.org/forums/ <p>Ideally you would update them every couple of years. In our real world, this would irritate our owners, sales reps and dealers. So I look for opportunities instead. If an account has no activity for 24 months or more I inactivate it, then if they come back I require a new application. If the customer moves, the business structure changes etc, I require a new application and resale. If the customer wants a credit line increase or change of terms, I use this as an opportunity to update my files also if the application is getting old. </p> http://creditmanagementassociation.org/forums/topic/311#post-1229 Thu, 26 Jan 2012 00:32:02 +0000 KEN ZANOLINI 1229@http://creditmanagementassociation.org/forums/ <p>You might want to create your own 5 star program.<br /> I attached an example.<br /> Performance is based on a point system by category.<br /> Good luck</p> <p> POINTS CURRENT PRIOR TOTAL POINTS CURRENT PRIOR TOTAL<br /> POSSIBLE MONTH MONTH POINTS POSSIBLE MONTH MONTH POINTS<br /> 120 DAYS &amp; OVER<br /> 0.50% 3 NA<br /> 1% 2 NA<br /> 1.50% 1 NA Customer Service Service<br /> 2%+ 0 NA A 3 N/A<br /> 60+ DAYS B 2 N/A<br /> 1% 3 N/A C 1 N/A<br /> 2% 2 N/A<br /> 3% 1 N/A<br /> 4%+ 0 N/A<br /> CURRENT<br /> 90% + 3 N/A<br /> 85%-89% 2 N/A<br /> 80%-84% 1 N/A<br /> 50%-79% 0 N/A </p> http://creditmanagementassociation.org/forums/topic/316#post-1228 Thu, 26 Jan 2012 00:17:56 +0000 PHIL TROP 1228@http://creditmanagementassociation.org/forums/ <p>Can anyone who works with collections in Europe share with me internal collection processes? </p> http://creditmanagementassociation.org/forums/topic/314#post-1227 Wed, 25 Jan 2012 22:58:47 +0000 KEN ZANOLINI 1227@http://creditmanagementassociation.org/forums/ <p>Credit apps should be updated every 5 years.<br /> Written contracts are usually enforcebable up to 4 years.<br /> But be careful not to lose a persoanl guarantee due to a updated credit app.<br /> Everyone learns as they become experienced!<br /> Good luck!</p> <p>Email credit apps &amp; follow up with a real person phone call.<br /> Positive &amp; real! </p> http://creditmanagementassociation.org/forums/topic/315#post-1226 Wed, 25 Jan 2012 22:55:18 +0000 KEN ZANOLINI 1226@http://creditmanagementassociation.org/forums/ <p>To verify the credit worthiness of a PG, pull personal credit reports.<br /> Get authorization before pulling. Here is a generic form.<br /> Good luck!</p> <p>CREDIT RELEASE AUTHORIZATION</p> <p>Each undersigned individual, who is either a principle of the credit applicant<br /> below or a personal guarantor of its obligations, authorizes release of any credit reference information for the company and individuals listed below including credit bureau reports, loan, lease, checking, saving, and trade accounts to Company Name requesting reports and/or its assignees. Such authorization shall extend to obtaining a personal credit profile in considering this application and subsequently for the purposes of update, renewal or extension of credit, and for reviewing or collecting the resulting account. A photocopy or fax of this authorization shall be as valid as the original.</p> <p>Business Name:____________________Date:<br /> Signature:_________________________Date: </p> http://creditmanagementassociation.org/forums/topic/315#post-1225 Wed, 25 Jan 2012 21:50:43 +0000 Jamie Garett 1225@http://creditmanagementassociation.org/forums/ <p>How do you determine the credit worthiness of the Personal Guarantor if the person is not the same as the owner/applicant? </p> http://creditmanagementassociation.org/forums/topic/314#post-1224 Wed, 25 Jan 2012 16:12:16 +0000 F Scott Wilson 1224@http://creditmanagementassociation.org/forums/ <p>Generally, we try to update the applications every couple of years. If a customer hasn't been active for over two years, we require a fresh credit application so we can perform a new review. If, on the other hand, the customer has been active, we request one later than that.</p> <p>As far as how we send them, our Sales reps either hand the customer a copy of our application, or Credit sends them via e-mail, or more rarely by fax. That lets us get the information quickly, before we need to schedule a load of material. </p> http://creditmanagementassociation.org/forums/topic/313#post-1223 Wed, 25 Jan 2012 00:10:56 +0000 Michael Joncich 1223@http://creditmanagementassociation.org/forums/ <p>11 U.S.C. (the Bankrupcty Code) at Section 547(b)(4)(A) defines an avoidable preference as a payment to a vendor made on or within 90 days before the date of the filing of the petition. </p> <p>There's only one petition for a case converted from Chapter 11 to Chapter 7. It's the petition that starts the Chapter 11 case. As a result, there's only one preference period: 90 days prior to the original petition date (or one year for payments to insiders). </p> <p>A debtor in a Chapter 7 case has no rights to pursue preference recovery. Preference recovery rights belong to the Chaper 7 trustee.<br /> _________________________<br /> Michael L. Joncich<br /> Manager, Adjustment Bureau<br /> Credit Management Association<br /> Email: <a href="mailto:mjoncich@emailcma.org">mjoncich@emailcma.org</a> </p> http://creditmanagementassociation.org/forums/topic/314#post-1222 Mon, 23 Jan 2012 19:24:35 +0000 Jamie Garett 1222@http://creditmanagementassociation.org/forums/ <p>Can anyone give me feedback on how their company updates their customer's credit application? </p> <p>Do you mail out an application with a cover letter? </p> <p>Any response would be helfpul.</p> <p>Thanks! </p> http://creditmanagementassociation.org/forums/topic/313#post-1221 Thu, 19 Jan 2012 18:37:08 +0000 Michael Dennis 1221@http://creditmanagementassociation.org/forums/ <p>Can anyone answer this question for me: If a Chapter 11 DIP converts to a Chapter 7, can the Chapter 7 debtor or trustee go after preference payments in the 90 days prior to the conversion from Ch 11 to Ch 7? Does anyone know for sure? </p> http://creditmanagementassociation.org/forums/topic/312#post-1220 Wed, 11 Jan 2012 18:01:47 +0000 F Scott Wilson 1220@http://creditmanagementassociation.org/forums/ <p>I would think that initially these would be found in the portfolio risk reports, since a bad debt allowance assumes that some portion or all of the monies associated with that account or firm are going to be lost. Private equity firms don't generally buy companies they expect from the outset to lose money on. </p> http://creditmanagementassociation.org/forums/topic/312#post-1219 Wed, 11 Jan 2012 16:19:13 +0000 Gordon Lundene 1219@http://creditmanagementassociation.org/forums/ <p>Since private equity companies tend to buy distressed companies, where are their preformance metrics found?<br /> Do these metrics factor into bad debt estimates, or portfolio risk reports? </p> http://creditmanagementassociation.org/forums/topic/311#post-1218 Mon, 09 Jan 2012 20:18:00 +0000 F Scott Wilson 1218@http://creditmanagementassociation.org/forums/ <p>A typical metric we use, outside of DSO, is the number of dollars over 120 days. We also look at the number of dollars in our bad debt reserve, as well as dollars written off each trimester. The goal there is to have the reserve exceed what we write off, while keeping the reserve as small as possible so it doesn't hit our bottom line. </p> http://creditmanagementassociation.org/forums/topic/311#post-1217 Fri, 06 Jan 2012 20:34:34 +0000 Marcia Sisk 1217@http://creditmanagementassociation.org/forums/ <p>Those are good processes, Robin, and I thank you for your input. I am actually hoping to obtain some examples of what other companies are doing for setting collection targets, other than DSO and CEI. What baselines and formulas are being used by other members of the Community? For instance, one idea is to establish that the amounts in &gt;60, &gt;90, &gt;120 aging buckets do not exceed X% of overall AR, but don't know what % would be considered reasonable or motivating. </p> http://creditmanagementassociation.org/forums/topic/311#post-1216 Fri, 06 Jan 2012 00:10:36 +0000 Robin Tool 1216@http://creditmanagementassociation.org/forums/ <p>Doing AR for 18 years, I have found what worked for me was doing weekly agings. The first and third weeks of the month I would call the same customers. If we didn't get paid by the end of the 2nd week, then I would call them again the 3rd week. Same goes with the 2nd and 4th week. I would call the other customers that I didn't call the 1st and 3rd weeks. I have found that this works very well. It's not too pushy, but a gentle reminder. Also, I have found that if you call the same customer every week, they will get fed up and just ignore you.....and you're bound not to get paid for an extra month. For accounts over 90 days, you might want to try to do an aging the first week and then if you don't get paid by the 2nd week, do a demand letter. Most debtors do not like the word "collections" or "attorney". When I dealt with customers in Hawaii, one customer ignored me for 2 weeks. Then I wrote an email to him and told him if we didn't get a check by a certain date, then we would turn this over to our attorney for lawsuit. I had a check in my hand 2 days later by UPS. It's always worked for me. Good Luck! </p> http://creditmanagementassociation.org/forums/topic/311#post-1215 Thu, 05 Jan 2012 21:33:40 +0000 Marcia Sisk 1215@http://creditmanagementassociation.org/forums/ <p>I am looking for best practice suggestions of setting AR monthly collection targets. We are a small publishing company with 150 employees, 3 full time collectors and a monthly AR aging that averages about 3500 outstanding transactions. In our current process a corporate $ target is set for amounts aged over 90 days and the target is systematically reduced each month. The formula for the target is somewhat arbitrary because we lack information about collection standards for businesses our size. We track DSO, CEI and some metrics at the individual collector level as well. </p> http://creditmanagementassociation.org/forums/topic/309#post-1214 Wed, 21 Dec 2011 19:29:56 +0000 F Scott Wilson 1214@http://creditmanagementassociation.org/forums/ <p>That's a hard one. I would suggest getting a purchase order first. Since many non-profits operate with at least some monies from the government or from governmental agencies, you might be able to get some sort of bond, if this is for a particular job or project. A purchase order would also formalize the agreement, and make sure that their purchase is in writing with all particulars. It might take a while to get paid, but you will have a better chance to do so. </p> http://creditmanagementassociation.org/forums/topic/307#post-1213 Wed, 21 Dec 2011 19:25:46 +0000 F Scott Wilson 1213@http://creditmanagementassociation.org/forums/ <p>Guy, that sounds like a useful addition. In our case, since we sell raw materials that go almost immediately into another product (we sell cement powder, rock, sand, et cetera), our customer can't be expected to hold the material separately until it's paid for. That sounds like an excellent addition for sales of finished goods or some such, though. </p> http://creditmanagementassociation.org/forums/topic/307#post-1212 Tue, 20 Dec 2011 23:45:37 +0000 Guy Nishida 1212@http://creditmanagementassociation.org/forums/ <p>Ashley,</p> <p>While it has never been tested, I have a section in my Terms and Conditions of Service that is part of my Credit Application (and therefore signed-off by the customer) stipulating that title to the goods remains with my company until the goods have been paid for. If the goods have not been paid for by the expiration of the credit period, they lose the right of possesssion and we have the right to recover. They agree to keep the goods segregated until payment is made and in that context are nothing more than a bailee. They also agree to allow us to acquire a security interest in the goods. It is small comfort but it all goes to the attorney when the legal battles begin. </p> http://creditmanagementassociation.org/forums/topic/302#post-1211 Tue, 20 Dec 2011 21:49:23 +0000 Gordon Lundene 1211@http://creditmanagementassociation.org/forums/ <p>While less precise, has using Morningstar's concept of 'Moats' been tried? A 'No Moat' company would be low margin, and vulnerable to multitudes of new competitors while a 'Wide Moat' company is probably very profitable, and not likely to run into trouble. </p> http://creditmanagementassociation.org/forums/topic/304#post-1209 Mon, 19 Dec 2011 20:42:58 +0000 Rita 1209@http://creditmanagementassociation.org/forums/ <p>Yes this is a concern as the post office continues to look at reducing delivery times.</p> <p>As of now I am re-contacting clients re paying by ACH/EFT/Wires . I have used the check by fax in the past for those delinquent clients. . </p> <p>It appears more companies are moving their ap towards ACH trend and always inquire with new customers if they have the option.</p> <p>Rita<br /> . </p> http://creditmanagementassociation.org/forums/topic/307#post-1208 Fri, 16 Dec 2011 17:28:35 +0000 Ashley Wexler 1208@http://creditmanagementassociation.org/forums/ <p>Thank you for your response Scott. </p> http://creditmanagementassociation.org/forums/topic/309#post-1207 Fri, 16 Dec 2011 17:17:02 +0000 Gay Bramer 1207@http://creditmanagementassociation.org/forums/ <p>I have a fairly new small non-profit with only a credit card as a credit reference. It is a separate corporation from a larger non-profit. They do not have audited financials based upon the recent formation of the corp. What resources do credit managers use to make credit decisions regarding non-profits? </p> http://creditmanagementassociation.org/forums/topic/307#post-1206 Wed, 14 Dec 2011 22:40:19 +0000 F Scott Wilson 1206@http://creditmanagementassociation.org/forums/ <p>My thought would be how the trucking was arranged. If the shipment goes FOB, then title to the product passes to the customer when it leaves the loading dock. In that case, the customer probably arranged for the shipping, so getting the truck to turn around would be risky from a legal standpoint, IMHO. In other words, your first situation is absolutely right. The product is no longer yours if *their* vendor picks up the product on their behalf.</p> <p>Asking the trucker to return the goods and paying them the freight to do so, as your customer's vendor, opens you and the shipper to potential preference claims. What a trustee or bankruptcy attorney could argue is that you deprived the debtor of assets they were legally entitled to, since the product was effectively their property, and further you paid the trucker, instead of their having to file a proof of claim in the bankruptcy. This could severly hurt your standing in court, as well. </p> http://creditmanagementassociation.org/forums/topic/308#post-1205 Wed, 14 Dec 2011 21:59:21 +0000 LARRY CONVOY 1205@http://creditmanagementassociation.org/forums/ <p>A member has ask us to pose the following quesion.</p> <p>We are looking at possibly moving our credit application process online and wanted some feedback from you regarding this process. In particular, we are looking for challenges to this in the collection arena (if accounts don’t pay, what are your experiences and challenges from customers that use online credit applications).</p> <p>Will all jurisdictions accept an electronic application?</p> <p>Thank you </p> http://creditmanagementassociation.org/forums/topic/307#post-1204 Wed, 14 Dec 2011 21:04:17 +0000 Ashley Wexler 1204@http://creditmanagementassociation.org/forums/ <p>In creating a credit policy, under the section regarding bankruptcy, I have included the rights a creidtor DOES have when the debtor files, and was questioned on (right to stop all shipments in transit and arrange for the reutrn of those goods). It was noted that possibly since the product ships collect we would not have cause to stop the truck in transit-reason being the carrier is collect and vendor of the debtor, it was not our trucking line; therefore they would continue the delivery in order to recieve payment. Is this the case?</p> <p>My point was you could always advise the trucking company of their customer in bankruptcy and that provided they return the goods, we will submit payment on the spot-they get paid and we get our product returned. Would this work? Would you even need to offer this given the product is OURS even if shipped collect?</p> <p>Any thoughts would certainly bring insight-I found this debate interesting!</p> <p>Thanks,</p> <p>Ashley </p> http://creditmanagementassociation.org/forums/topic/306#post-1203 Wed, 14 Dec 2011 17:07:57 +0000 F Scott Wilson 1203@http://creditmanagementassociation.org/forums/ <p>We just received a letter from a large corporation on a project we're furnishing materials on, instructing us and any other suppliers who have not yet been paid to provide a written demand to the corporation immediately. In addition, they want us to file any stop notices or lien claims right away, and give a specific project director and physical location to send all of these items to.</p> <p>The odd thing is that the project director states: "Please be advised that any persons who fail to serve a stop notice upon receiving this written demand shall automatically forfeit his or her right to a mechanic's lien in connection with the Project."</p> <p>I am not aware of any portion of lien law that allows an owner or general contractor to demand the filing of a stop notice or lien (though we sometimes get requests to do so). Also, I don't know of anything in *any* of the forty-odd State lien statutes I've dealt with that permits a property owner to mandate a time frame for responding, other than given in law, upon threat of forfeiture of lien or stop notice rights.</p> <p>Has anyone else seen this language from an owner or GC? Is this even a valid instruction, as it appears to fly in the face of existing lien laws? Or did the Project Director "spike" his coffee before writing this? </p>