By Chris Ring, NACM’s Secured Transaction Services
There’s a poignant article written by Vivek Wadhwa in MIT Technology Review titled, “Laws and Ethics Can’t Keep Pace with Technology,” that is well worth reading for anyone in the business-to-business credit industry. The last part of the article read as follows:
“Thomas Jefferson said in 1816, ‘Laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths disclosed, and manners and opinions change with the change of circumstances, institutions must advance also, and keep pace with the times.’ The problem is that the human mind itself can’t keep pace with the advances that computers are enabling.”
As credit professionals, we need to realize that industries and governments are increasingly making use of technological advancements—and we must do so as best we can, too.… Read the rest
Most credit professionals are well aware of NACM’s vaunted “Five C’s of Credit:” (character, capacity, capital, conditions, and collateral). These guiding tenants have long provided a base-level guide to drive credit professionals toward best practices in their daily business dealings. A group of veteran credit professionals, while attending NACM’s Graduate School of Credit and Financial Management, argued that differences in doing business outside of U.S. borders perhaps necessitates adding three additional C’s to the list for anyone extending credit internationally. They are: country, currency, and culture.
Where a U.S. business exports its goods is a major factor in how smoothly credit and collections transactions can be conducted. Depending on the country in question, credit and collections professionals can run into a myriad of business problems: regime instability and citizen uprisings (the Middle East, Ukraine), sanctions lists that ban certain sales and fine those who don’t comply (Iran, North Korea), high public corruption levels (Russia, Sub-Saharan Africa), laws that are considered highly debtor-friendly (Brazil), to name a few.… Read the rest
By Scott E. Blakeley, Esq. republished from www.blakeleyllp.com
The Electronic Signatures in Global and National Commerce Act (The E-Sign Act) went into effect November 2000. The E-Sign Act makes an electronic signature (e-signature) as legally binding as ink-and-paper signatures, and can be used in legal proceedings. An e-signature is generally defined as a form of technology, including fingerprint readers, stylus pads and encrypted Asmart cards@, used to verify a party’s identity so as to certify contracts that are agreed to over the Internet.
The Federal Trade Commission is the federal agency responsible for regulating the E-Sign Act. At the direction of Congress, the FTC has issued a report finding that the E-Sign Act is working for both business and consumers, after receiving input from 32 interested groups, ranging from computer companies and financial institutions to consumer groups and academics.… Read the rest
By David Josephson at Export-Import Bank of the U.S.
Why should a small bank with a focus on its local customers and deposits care about including export finance in their offerings to customers? The answer is quite simple: more and more, their customers who are manufacturers or service providers are going global in order to boost their sales, and the more that a local bank knows about export finance, the more valuable that bank is to its customers.
The Export-Import Bank of the U.S. (Ex-Im), America’s official export credit agency, exists to support U.S. job growth by equipping businesses with export financing tools in instances when private banks are unable or unwilling to offer support. More than 98 percent of Ex-Im’s transactions last year involved partnering with a private financial institution to support export sales; all told, Ex-Im supported 164,000 American jobs by supplying products like insurance, working capital, and loan guarantees to its customers—90 percent of which were U.S.… Read the rest
By Aaron Lindstrom, Euler Hermes
Few companies can effectively compete without extending credit to their buyers. But each time a business grants credit to a customer, it is taking a chance that the debt will not be paid. This creates risks for the business’s cash flow and profitability, since one large unpaid invoice may have the potential to impact the bottom line, halt growth, or even trigger insolvency. Representing up to 40 percent of a typical company’s balance sheet, accounts receivable (A/R) are naturally both a vital and vulnerable component of a healthy business.
In the face of today’s changing economic climate, recognizing and managing future A/R risks needs to be a priority for many businesses.… Read the rest
By Shannon Abnal, Group Services Manager – Data Contribution & Industry Groups
Obtaining credit information upfront on customer applications is an integral part of credit management. Performing some due diligence in deciding a customer’s creditworthiness is part of every firm’s credit policy. There are varied methods of getting the info – pulling credit reports, checking references, internet research – but nobody doubts that knowing the facts about your potential customer before extending credit makes sense. You investigate, compile, consider, and determine before you extend credit.
The same holds true for what to do when debt goes bad. Most firms have a set of rules that guide the credit manager when customers pay slow or stop paying.… Read the rest
By: Tawnya Marsh, CCE, Columbia River Knife & Tool
What is GSCFM? I’m sure most of you reading this article already know what GSCFM stands for but just in case, the acronym is defined as the Graduate School of Credit and Financial Management. For me, GSCFM represents a plethora of education and opportunity.
I just completed my first year on the beautiful Dartmouth Campus. The education that NACM provides for this program is unsurpassed. While you only spend two weeks in class I felt like I spent an entire semester at Dartmouth with all of the information we received. The instructors that NACM pulls for this program are amazing. Topics from Cash Flow Analysis to Corporate Strategy, Public Speaking, and finally flowing into a program on Body Language, you really do touch all aspects of being a successful credit manager and leader.… Read the rest