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Credit Words Contest


NACM and Business Credit are thrilled to present the winners of the first Credit Words: Stories of Victory and Defeat contest. Many wonderful and funny experiences were shared and the competition was tough.

The winner of the $250 first prize is Linda Olsen, CBA, assistant credit manager, Dolese Bros. Co., Oklahoma City, OK.


The Doberman Rule
Tenacity and Kindness Can Soften Even the Toughest Customer


Several years ago, I was trying to collect a past-due balance on open account. Our customer, Mr. Smith (not his real name), was one of those who felt he could pay when he got around to it and not a minute before. He was cantankerous, to say the least, and routinely became offended when we asked for payment. If and when I was able to reach him by telephone, I got the usual excuses and promises to pay: “I thought my wife mailed that check” or “I told my secretary to put that check in the mail weeks ago.” I had worked this account at least once a week for months. I finally asked one of our salesmen to go by the customer’s residence and see if he could pick up a check. Dennis had taken some orders from Mr. Smith before, and he agreed to visit him.

Dennis came by my office at about 9:00 the next morning to pick up the necessary information—account balance, invoices, etc. The day passed and I didn’t hear from Dennis. I tried his cell phone several times, leaving a message each time, just trying to see if he had been able to make contact with Mr. Smith. Late that afternoon, just before closing, Dennis came into my office with a big grin on his face and waiving a check. He had collected in full and had gotten a large order for the following week—if we would release the credit hold, of course. I asked him if Mr. Smith had been difficult to deal with. He said no, he was a real “puppy dog.”

Dennis had gone to the customer’s residence that morning around 10:00am and not getting a response to his knock, sat down on the porch to write a note on the back of his business card, planning to place it in the screen door. As he was writing, he heard a deep growl from his left side. Before he could turn his head, there was another growl from his right. Two identical Dobermans were on either side of him, obviously intent on protecting their master’s property. They were beautiful animals, sleek and tall and with very large teeth! Dennis was petrified! The dogs were between Dennis and the gate and his cell phone! Fearing for life and limb, Dennis considered his not-very-promising options. Could he jump flat-footed over a five-foot chain link fence? No, he didn’t think he could get his six-foot two-inch, 250-plus pound frame to make that maneuver. Should he sit still and hope for the best or try to outrun these canine guards? One of the things I had never known about Dennis was that he was afraid of large dogs! He was paralyzed with fear and swore he saw his life pass before his eyes. He said he was absolutely sure he would lose some part of his anatomy if he ran. With no help in sight and no access to his cell phone, Dennis waited.

Dennis was a delightful man, with a can-do attitude that he used all his life to conquer adversity. That attitude served him well in his job as a salesman and in this situation also. Patiently, minute after minute, hour after hour, Dennis talked to those dogs. Eventually, finding no threat in Dennis, they relaxed their vigil and probably would have let him out of the yard. But Dennis, being the kind of person he was, would not give up on his mission and stayed to collect the payment. Four hours later, the homeowner returned to find Dennis sitting on his porch with a fierce Doberman cuddled against each leg.

Our customer, seeing Dennis with his dogs, immediately understood the kindness and tenacity it took to make friends with the Dobermans. Mr. Smith knew he would always have a friend in Dennis if he could be a friend himself. The two of them— and the dogs Boomer and Sooner—sat on the porch for the next hour and discussed business and life in general. Mr. Smith wrote the check and has been a good and loyal customer ever since.

Dennis, only in his late 30s, passed away not too long after that. Sometimes it is only after death that we find out all the good things a person has done in their life. Mr. Smith as well as many other customers spoke at Dennis’ funeral. He said if Dennis was an example of the kind of people our company hired, we had his respect and loyalty. Other customers told of how Dennis had stuck with hard jobs and came up with a solution that saved our customers time and money. Even though it has been years since Dennis left us, I think of him often. I miss his smile that could light up a room. But most of all I miss his positive attitude. Just from this one collection effort, Dennis taught me that even a gruff sounding customer can become one of your best if handled just right. I still grieve for Dennis and a life cut so short. I truly miss all he could have taught us about integrity.



Runner up and winner of $50 is Bob Steve, credit and A/R manager, Harter Secrest & Emery LLP, Rochester, NY

Lessons From a Creditors’ Committee
Almost 10 years ago I was the chair of a small unsecured creditors’ committee of manufacturers, and the experience reinforced my belief that sales and credit can work well together —and produce a surprise or two and some humor as well.

In the late 1990s I worked for a large northeastern vision care company with the divisional line of business sunglasses and fashion eyewear. Part of my assignment was administering credit and collection management to a network of domestic wholesale distributors, eyeglass vendors and big-box retailers. One of the small retail optical chains in the southern U.S. had run into hard times, and surprised us somewhat with a Chapter 11 filing. Allegedly, bad weather had affected sales and their bank had called in the financing package. Because our products were featured brands, our company was the largest creditor outside of the banks, so I was tasked with setting up the unsecured creditors’ committee and all the administrative duties that went with it.

The division of my employer that sold the product was in the process of being divested and sold to a new foreign parent—so all but absolutely essential travel related to the sale was highly restricted. The first 341 first meeting of creditors was soon to take place in Texas, and I knew that it would be impossible to gain approval to go. Not a great way to start off as chair of the creditors’ committee.

Our VP of finance and I discussed the travel ban and who in our company located in Texas might be able to attend the 341 meeting in my place. Our regional sales manager in that area turned out to be a highly-educated, solidly logical “go to” sort of guy, who would have the meeting date free and had the reputation of handling special assignments well before for our senior management.

I called the U.S. Bankruptcy Court Trustee in the case, explained our travel ban dilemma and that we had a substitute that should serve us well with preparation from me, and that I would take over afterward. The trustee was a bit reserved about it, but said that as long as our representative didn’t hold up the proceeding with improper questions or a lack of knowledge it should be OK.

So our regional sales manager and I spent several hours on the phone over the next two weeks and held a “commercial credit/Chapter 11” primer session. The first week I gathered together various materials (including excerpts from the NACM’s Principles of Business Credit) and overnighted the package to him, and we discussed the mechanics and concepts of the Chapter 11 bankruptcy process. The second week I sent a similar package that contained background documents on the specific customer that had filed for protection and I familiarized him with the credit screening, payment turn stats and the sudden drop in regular payments that preceded the filing. Our sales manager absorbed all of this like a sponge, and I could tell he enjoyed the challenge. He told me he was “ready to go” and anxious to experience this new task.

A few weeks later I was in the middle of a hectic day—the kind that just rains down with one “I need it now” issue after another—and I received a call from the Texas bankruptcy trustee. I had been so busy that day I had even forgotten the 341 meeting had just taken place. I asked her how my “shill” had done, and expected that because she had placed a special call an apology was in order. When I told her that she laughed and said that was definitely not the case.

She said that our fellow did extremely well, and that she was calling to thank me for what was an entertaining and new experience for a 341 meeting. There were the usual questions for the debtor, and she said our guy had been right in there, slicing down the essence of the banks’ secured financing, the alleged reasons for the decline in sales income and the usual dissection of the business crisis that caused the filing.

What had really made her laugh was what happened when the usual claim was made that “the sudden downturn in sales was due to conditions beyond the control of the debtor management.” In this case, the product was sunglasses and the principal was simply claiming that a stretch of bad, rainy weather in the region caused his sales to tank. Our sales manager then stood up, gave a one-minute explanation that he had long ago started tracking the data points of sunglass sales versus umbrella sales as part of his career duties, and produced a chart for the time period in question showing the same, as well as weather stats for the alleged poor weather period— entirely disproving what the debtor had said. Our guy then launched a series of questions from a sales standpoint, and quickly exposed that the chain decline in sales was due to a cutback in marketing efforts, a series of bad decisions on pushing product and diverting available cash to non-value-added projects instead. The trustee said everyone except the debtor and his attorney was smiling by the time our sales manager finished.

From that point, our sales manager went back to his duties, with heartfelt thanks from our finance area and from me. The subsequent unsecured creditors’ committee meetings were held by telephone. Building on the details the sales manager had gathered in the 341 meeting, we exposed an imperfection in the debtor’s security agreement with their bank. We hired an attorney to represent the committee, and eventually by chasing that point we managed to gain a carve-out concession from the bank that resulted in a partial distribution to the unsecured creditors. Without the original assistance and attentiveness of our sales manager at the 341 meeting that concession might never have happened.

I had always believed that in a manufacturing environment, sales and credit are part of a team that needs to work together, with the mutual goal of finding customers that can purchase as much product or service as possible that they can pay for, and then keeping and maintaining that relationship. But even with that mindset, our sales manager surprised me—and taught me that the diversity of our backgrounds and purposes, when combined, is a tremendous strength when trying to reach the mutual goal that brings success to our employer.

The sunglass business that I worked for eventually moved their headquarters. I stayed in the area working for other employers, but now when a customer or client files for Chapter 11 protection, I always stop and wonder where I can find that national sales manager, and smile…

Runner up and winner of $50 is Loretta April, credit manager, Seaboard International Forest Products LLC, Nashua, NH.

Reclamation Demand Cures the John Doe’d Blues

Many years ago there was a regional retail chain customer in the Mid-Atlantic States. For this story, let’s call them the John Doe Widget Company. They were always difficult to deal with: chronically late with payments, constantly needing several collection calls per invoice and they always took deductions on anything and everything. In fact, the company’s name became a verb in our office lexicon, as in “We’ve been John Doe’d again!” This company set the standard now used by today’s big-box stores that use accounts payable as a profit center with those same tactics. John Doe was the master of evasion and deductions!

Over several years, the John Doe Widget Company expanded by buying not one, but two, smaller chains that were in bankruptcy. With its expansion, they became even more difficult to deal with; payments got even slower, requests for deductions increased, constant calls were required for collections. More chasing. More frustration. Why were we surprised? We talked to supervisors, managers, the controller, the finance director, the chief financial officer—you name it, we talked to it to get paid.

After months of intense run-around, enough was enough. I was done playing their games and took a tough stance. The John Doe Widget Company account was flagged against any new business. That got their attention. Once the account was current, we shipped existing confirmed orders, but did not take any new ones. And the cycle would start again: slow payments, unreasonable requests for deductions, and again a flag was placed on their account. One day, they called, desperate to receive one of their confirmed orders. After getting a commitment from John Doe’s finance director that they would overnight payment for their outstanding invoices in exchange for letting two more truckloads of products ship, I approved the new purchases.

As one can guess, the overnight did not arrive. One truck had already delivered; the other was in transit and I had no way to stop the delivery. No one was taking my calls, not even the finance director who made the promise the day before. “John Doe’d again!”

I was young, a newly certified Credit Administration Professional with the National Association of Credit Management. With the information from the legal class fresh in my mind, I sent a reclamation letter overnight, demanding that my material needed to be returned immediately. I immediately received a call from their legal counsel asking why I had sent the demand letter. In my youthful enthusiasm, I stated emphatically, “You’re not meeting your debts as they come due, which is one definition of insolvency and apparently you don’t have the money to pay me. If this is the case, then I would like to come and get my material.” The attorney assured me that his client was indeed solvent and that this whole thing was unnecessary. I asked for immediate payment of everything and he stated he would see what he could do.

After a few days and several unreturned calls to the attorney, I received a check for all open invoices with the attorney’s letter restating that his client, John Doe Widget Company was indeed solvent. It was just a misunderstanding, he wrote, and enclosed were the appropriate payments.

Sixty days later, John Doe Widget Company filed for bankruptcy, and 60 days after that came the notice from the bankruptcy trustee with a preferential payment demand for $40,000. I provided my reclamation documents and the attorney’s letter assuring me of the debtor’s solvency. Happily, I never heard from the trustee again. At least we got the last hurrah on our years of being “John Doe’d.”

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