Know the Basics of Key Ratio Analysis

Jul 13, 2016

Posted by & filed under Credit.

Key ratio analysis in credit centers are using statistics and metrics to drive decisions on whether or not to grant terms to customers. It helps creditors summarize why these customers do or don’t deserve the terms and whether their numbers provide enough need-to-know information about their financial health. In short, when done properly, key ratio analysis lets creditors know “can customers pay their bills,” says NACM speaker David Osburn, CCRA, of Osburn & Associates LLC.

Analyzing key ratios is an important tool but does not eliminate other fundamental duties of credit professions. As many credit managers and collectors have discovered over the years, just because someone can pay doesn’t mean he or she will pay.

During the 120th Credit Congress & Expo in Las Vegas, Osburn laid out the following five key, basic key ratios:

Cash Flow.… Read the rest

Your Choice — Quarterly or Annual Membership Fees

Jun 16, 2016

Posted by & filed under Credit.

Your Choice — Quarterly or Annual Membership Fees

When your regular membership renews, please feel free to let us know if you’d like to change the billing period. If you prefer quarterly billing, we’ll renew your membership for three months. If you prefer annual billing, we’ll renew your membership for twelve months.

And if you’d like to keep it on the same basis as you currently have, you don’t need to take any action.This does not pertain to members from Spokane who already are offered this payment plan option.

Please note: If you have a premium or corporate membership, this will continue to be billed annually. Thanks for your continuing support!… Read the rest

Supplier Payment Channel Dilemma: Discourage Credit Card Use Through Early Pay Discount?

Jun 8, 2016

Posted by & filed under Business Credit Journal, Credit.

Written by: Scott Blakeley, Esq.

Credit cards are the most expensive payment channel for the supplier, and the fastest growing. Indeed, for some suppliers, customer credit card charges are one of their largest operating expenses. What can the supplier do to manage the card cost as more customers turn to cards to pay supplier invoices?

Cards Continue to Increase for a Number of Reasons

The share of customers that pay suppliers by credit card continues its dramatic increase in the B2B space for the following reasons: (1) card issuers continue to increase the rewards offered to individual cardholders (travel points, miles, and cash back), and corporate cardholders (rebates); (2) card awareness is increasing in the B2B space as card networks now cold call customers trying to convince the finance team that cards should be the payment preference for the invoices of their supply chain; and (3) the customer’s cash flow and working capital improves by using cards, compared with other payment channels.… Read the rest

Did You Know – OFAC

Jun 8, 2016

Posted by & filed under Credit.

Do you sell internationally?  Are you aware of OFAC (Office of Foreign Assets Control)?

Office of Foreign Assets Control – Sanctions Programs and Information

The Office of Foreign Assets Control of the U.S. Department of the Treasury administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign countries and regimes; terrorists; international narcotics traffickers; those engaged in activities related to the proliferation of weapons of mass destruction; and other threats to the national security, foreign policy, or economy of the United States.

OFAC provides a free, online application to enable to users to simultaneously search all of its sanctions lists. OFAC Sanctions Lists can be found at: www.treasury.gov/resource-center/sanctions/Pages/default.aspx… Read the rest

Look for the Warnings Signs of a Distressed Customer

Jun 8, 2016

Posted by & filed under Bankruptcy, Business Credit Journal, Collections, Credit.

Being able to discern the warnings signs of a financially distressed customer is critical. Although a decline in cash flow is the most important bellwether of financial distress, about 80% of all companies are privately held and don’t provide detailed financial information. As a result, creditors must rely on their customers’ payment patterns, competitors’ experience with the customer, and customers’ actions as indicators of their financial health. Operational and managerial signals can serve as a warning of impending problems.

Whenever a company dramatically changes its business model, financial analysts should become
wary— especially if the system moves from one easily understood by investors to one that is obtuse and difficult to evaluate and monitor. The use of special purpose and other off-balance sheet entities can be used to create phantom profits and hide liabilities.… Read the rest