Editor’s Message – Winter 2009
The global economic crisis continues to dominate the news. We have seen the U.S. introduce its massive bailout plans and all of the major European countries have done the same. On the national scene, the federal budget that Minister Jim Flaherty tabled last week contains measures that will help ensure that the Business Development Bank of Canada (BDC), Export Development Canada (EDC) and other crown entities do not stop servicing Canadian companies. So, with all these stimulus packages to unfreeze credit, enhance free enterprise, and by extension the free flow of goods and services, credit professionals will very likely be called into action. Are you ready to respond?
In fact, in times of recession as in times of economic prosperity, credit professionals are always busy managing one of the most important assets (accounts receivable) of a company. While there may not be a lot of new credit customers to evaluate when the economy registers negative growth, dealing with delinquent accounts is more prevalent. If you find work has become more stressful as a result of current conditions, take some time to pause and reflect. As you will read in Patricia Katz’s article Permission to Pause, a moment of respite can do a lot of good.
In this edition of To Your Credit, you will read articles on credit insurance, fraud, cash application and consumer debt collection laws that we hope will help you manage your credit portfolios more effectively.
Nawshad Khadaroo, CCP
The views expressed in the articles are the opinions of the writers and contributors not those of the Credit Institute of Canada. Nothing in this publication is intended as legal advice, or tax or accounting advice. Nothing in this publication should be considered an alternative to seeking professional legal or professional advice. You are encouraged to use your judgment in deciding which of the ideas to accept or adopt, and which to reject and ignore.
Tell Us What You Think
Send your opinion on the articles appearing in this edition or any other current news affecting credit professionals to firstname.lastname@example.org. If you would like to see more coverage on a particular topic, have a question related to the articles or would like to submit one, don’t hesitate to contact me.
Focus on Members:
Brian Bull, CCP, CCE, 2nd Vice President of the Board
Members on the Move
Creating and Disseminating Credit Knowledge – Join the conversation
What factors should be measured from a credit manager’s point of view?
Please list as many as you think are important and measurable…
Here is what a credit manager had to say:
“Our combined knowledge has a material value…The free exchange of this
knowledge through the CIC forum elevates us all and I support the effort
wholeheartedly…I keep an eye on…national bankruptcy statistics –
monthly, provincial bankruptcies – monthly, national inflation – monthly,
provincial inflation – monthly, US exchange rate (average if available, spot
check at consistent intervals if not), oil Prices (average if available, spot
check at consistent intervals if not), natural Gas prices (average if available,
spot check at consistent intervals if not), total sales, number of
transactions per division, per month (Service vs. Manufacturing), average
transaction amount per division (monthly), slow Payers (over 60),
delinquencies (over 120), write-Offs…There are others but these are the
ones I graph. My business is largely dependant on oil & gas production so
some of the ”
Bankruptcy & Insolvency:
Latest Bankruptcy Statistics
Credit & Collections Management:
Receivable Insurance Tips
All of the major credit insurance underwriters experienced unprecedented
levels of claims in 2008, and the forecast for 2009 indicates that the trend
will continue or even worsen...
ELECTRONIC FUNDS Transfers and Fraud
Electronic Funds Transfers ("EFTs") are widely accepted as a method for
organizations to transfer funds on a timely basis to suppliers, employees
and other organizations. However, EFTs can pose an internal control
weakness for many organizations...
Deception and the Gift and Prepaid Credit Card
Gift cards and pre-paid credit cards (credit cards with amounts already on
them) have become more and more the option for giving, it’s simple and
easy. The popularity of gift cards has created a new portal for fraudsters to
deceive you and relieve you of your hard earned money...
Black Holes and Old Invoices
One of the surest ways to create a “permanent” leak in cash flow is to apply
customer payments to the oldest invoices just because they are the oldest.
When we explore the reasons this procedure is applied we often find that
old outstanding invoices raise red flags...
Credit Management Q&A:
What are some of the universal rules that a collector should be aware
of when collecting from delinquent accounts?
Credit Resource Guide:
Links to Debt Collection Laws and Statutes
As creditors become more aggressive in 2009 to better their position of
getting paid, it is important that they keep abreast of the various laws and
statutes governing debt collection. For your protection, we recommend that
you visit these sites and review the information...
Industry & Economic News:
Don’t Disregard Demography
Concerns about the current path of the world economy have analysts and
strategists transfixed on the latest monthly data releases, and with just
cause. Talk about our demographic challenge has all but ceased. It may not
be our first worry, but we take our eyes off this issue at our peril...
Permission to Pause
You're climbing a mountain. It's a tough, dirty, exhausting challenge.
The higher you climb, the quicker you tire. Still, you plod on. Never
stopping. Swiping the sweat from your brow. Eyes fixed firmly on the
path ahead. Focused. Determined. Single mindedly on task.