Part of NACM's ever-evolving Credit Congress this year in Las Vegas included what was perhaps the biggest hit of 2010's Credit Congress-the new forum-style Executive Exchange Sessions.
The Executive Exchange Sessions gave attendees a chance to attend a three-hour session on one of six topics-bankruptcy, building and construction, credit and collections, international issues, performance metrics and agriculture/steel/commodities-during the second day of the happenings at this year's host venue, the Rio Hotel. The sessions drew large crowds and, by all accounts, the highly interactive format of each left attendees feeling more engaged with panelists than ever.
One of the top draws was the Executive Exchange session on credit and collections, moderated by former NACM Chairman Mark Tuniewicz, CCE. The session was comprised almost entirely of answering direct questions from the audience. Not surprisingly, the question "What is the next big thing in credit and collections?" was among the highlights.
Scott Tillesen, CCE, director of credit for the Florida-based Tech Data Corp, said the future of the industry is all about increased productivity and automation. He said businesses need to find ways to reduce the number of traditional, paper-based files they're hanging on to and implement systems that allow important data to be continually piped in, instead of being researched when needed. Tillesen noted, "Data is cheap once you have a system in place."
"It all goes hand in hand," said Tillesen. "Automation in a way gets rid of the paper and looks for data flow that isn't human intensive. You don't want to spend one minute looking for information that could come to you automatically."
Tuniewicz commented that having an adaptive, flexible policy could and should be big in credit and collections moving forward. He said there are many benefits to being able to segment one's customer base into categories such as who is profitable and who isn't as well as who is trending up and who is trending down. Such policies can greatly help anticipate when a customer might be about to fall on hard times.
The following is just a small sample of other topics covered during the session:
Question from attendee: "I have $150 million in A/R with no credit checks on file. Where would you start to implement a credit investigation?"
Answer: Said Stanford Cramer, corporate VP of IAB Solutions LLC, "[Conduct] an ABC analysis and segment it into larger balances and work your way down. And you may want to hire some more staff, too." Said Tilleson, "If you have that much, go out and buy some data quickly. For three or four bucks a piece, you can score the whole portfolio and find out where the largest risks are."
Q: An attendee asks about the trend of outsourcing in credit and collection.
A: Said Tuniewicz, "In fairness, I'm aware of a lot of firms that outsourced their A/R and brought them back. What we do is personal. What we do is different. What we do is about touch."
Q: What are the best practices for processing credit cards?
A: Said Tuniewicz, "Find a processing firm that works for you. My advice, stay away from the huge ones...you're likely to be a speck. Find one with an office near you. They have incentive. They will walk you through the steps."
Q: An attendee asks about ways to spot fraud before it's too late.
A: Tilleson talks about having a good frontline defense, which starts with having the sales department trained to spot "red flags" (not the Federal Trade Commission kind): "We're subject to a lot of fraud... If someone's not negotiating on the price, you've got to wonder why they're even placing the order with you. Check orders outside of their normal buying patterns. We still want our sales staff to be the first line of defense against fraud." He added that someone buying sophisticated gear is less likely to be planning fraud because such items can't easily be sold "at a flea market," for instance. Now, items like printer cartridges, for example, are a totally different story, Tillesen said.
Most Credit Congress sessions can be ordered on CD-Rom. To get your desired sessions, order today by clicking here.
Brian Shappell, NACM staff writer