APG Warns of Suspicious Activity in the Chemical Industry
APG has been informed of recent suspicious activities. A member received an unsolicited application and order from the subject noted below. Terms were granted and an order was shipped to the subject. Upon additional research, the member found that the corporate charter number provided was incorrect. Additional searching revealed that the subject is not listed with the Georgia Secretary of State's corporate division.

APG has revealed three other entities of similar business names that have been verified to have no relation to this subject. The address the subject provided is a legitimate location; however, a cross-reference database search does not show this as a current location for this subject. Upon additional cross-referencing, no address in Georgia was found for this subject.

In this instance, the subject placed orders for railcars, trucks and materials. Please cross-reference the information below and contact APG if you have any additional information. Thank you for your time and attention.

Wright Industries, Inc.
101 Old Mill Road, Building A
Cartersville, GA 30120
Contact: Winton Blount V, signer of credit application

NOT TO BE CONFUSED WITH WRIGHT INDUSTRIES OF NASHVILLE, TN.
NOT TO BE CONFUSED WITH WRIGHT INDUSTRIES, INC. OF PITTSBURGH, PA.
NOT TO BE CONFUSED WITH WRIGHT INDUSTRIES PTY LTD OF QUEENSLAND, AUSTRALIA.

**Due to the various locations of the legitimate WRIGHT INDUSTRIES, this alert is contained to and only pertinent for the address in Georgia listed above.**

Related Sessions at Credit Congress

Worried about fraud? Have no fear—this Credit Congress session will help!

16054. Fraud in Financial Statements—Case Studies
Wednesday, May 21, 8:30-10:00am
Speaker: Bruce Dubinsky, MST, CPA, CVA, CFE of Dubinsky Co., PC

Take a walk down "Avenue of the Frauds." In this session, actual case studies where fraudulent financial statements have been used to perpetrate the fraud will be presented. Through them, gain a better understanding of the motives and methods used by fraudsters to pull off financial fraud. Learn how to develop the skills to look at financial statements with an eye toward financial fraud. Click here to register.

(This session offered again in #16079 on Wednesday from 1:30-3:00pm.)

Breaking Ground on UCP600
Somewhere between 11-15% of international trade uses letters of credit (LCs), representing trillions of dollars each year. As such, there has been a need for consistency in the rules and regulations that govern this form of documentary credit. The latest in a long line of these standards is Uniform Customs and Practice No. 600 (UCP600), which went into effect last July. After more than three years of crafting and compiling feedback, it was the first revision to the rules governing documentary credits since 1993, which began 60 years prior. UCP600 is part of the International Chamber of Commerce's (ICC) ongoing agenda to help manage regulations governing the use of commercial LCs and to eradicate some of the redundancies in older statutes as commerce changes.

In the NACM teleconference, "Everything You Wanted to Know About UCP 600, but Were Afraid to Ask," JPMorgan Chase's Madeline Sprague, CTP, vice president, Global Trade and Logistics, walked members through the basics of the latest regulation.

"Electronic changes in commerce were the driving force behind the revision," commented Sprague. "The old UCP500 was very cumbersome and said the same thing over and over again. UCP600 now provides for a variety of defaults and conditions. By far and away, UCP600 is going to be the driving regulation and it's very easy to make an LC customized to your transaction. The previous versions were very nit-picky and it drove beneficiaries insane."

Sprague said that it was imperative that members realize that a letter of credit is fundamentally a specialized payment, and that UCP600 defines a large portion of that payment as contract law. As such, LCs are not always intuitive and are basically a conditional payment contract. The credit agreement is also separate from any other commercial contract with payments made against the LC only, but must be in sync with other commercial contract terms.

"The devil is in the details in letters of credit, as with any contract," said Sprague.

UCP600 is now the primary international regulation governing commercial LCs although, in the United States, Uniform Commercial Code (UCC) Article 5 also shares rule over the documents. The international regulation provides which parties are committed to payment, what the obligations of banks are, which party has the final say, as well as defines what types of payment commitments there are and when they go into effect. Unlike UCP500, the new rule provides defaults and standards for the styling of documents and what those documents must contain. But it's not something credit managers are going to conquer overnight.

"It's really a version of contract law and you're not going to learn it quickly," explained Sprague. "You're going to need someone to coach you through it."

She suggested that a good starting point is the ICC website, which provides a wealth of information on the revision. The NACM Bookstore also carries The Comparison of UCP600 & UCP500, published in 2007.

Matthew Carr, NACM staff writer

Safety in Numbers

The amount of money that American businesses risk on sales on credit each year is measured in the billions. Every credit manager is held to an increasingly high standard of success to ensure that the transactions aren’t merely blind gambles. As such, there are innumerable tools that enable executives to do this, but there’s almost nothing better than the tried-and-true success of actual shared personal experiences. This is where industry credit groups, like those at the national and local levels governed by NACM and its affiliates, are unparalleled. The function of a credit group is to educate its members, not only within their specific industry, but to also foster the exchange of universal best practices ideas. To learn more about the benefits of industry credit exchange groups and other conferences, be sure to read this article in the upcoming April issue of Business Credit. Click here to get your subscription started today.

Latest Farm Bill Proposal "Dead on Arrival" in Senate
The latest outline for spending on the still unfinished 2008 Farm Bill has been called "dead on arrival" with Senator Max Baucus (D-MT), chairman of the Senate Finance Committee, and several other Senators. Baucus, who is also a senior member of the Agriculture Committee, led his own committee to create a fully offset $5.1 billion disaster assistance fund, but refuses to support the current bill, which cuts that fund in half.

"This new farm bill proposal is dead on arrival. I won't vote for or help to fund any agreement that does not do disaster assistance right for our farmers in need," he said. "I bet other Senators will feel the same."

Baucus noted that the National Farmers Union (NFU) made a stable and permanent system its first priority for the latest farm bill and noted that the Finance Committee had compromised funds in order to allow the Agriculture Committee to pursue other priorities. "The Finance Committee did something it's done nowhere else," he said. "Finding resources and freeing up funds for the Agriculture Committee to pursue priorities like nutrition programs."

"If we continue to work together, we can keep America's farmers from getting the short end of the stick on disaster assistance," added Baucus. "This proposed agreement isn't good enough."

Negotiations on this year's Farm Bill are ongoing.

Jacob Barron, NACM staff writer

Grow Your Credit Management Skills

Did you know that there are over 200 varieties of Kentucky bluegrass? One of the most popular is "Midnight," known for its dark blue-green color. And unlike credit, Midnight requires little maintenance.

Look to Credit Congress, the best setting for the many ways to maintain and enhance your best credit management qualities. Along with anything you need to know about Credit Congress sessions, the conference website is packed with information about networking activities and highlights attractions of this year’s host city—Louisville.

Don't wait for the clock to strike, the early bird deadline is March 28, 2008!

Diesel Supply in Question
The transportation industry has been watching the march of diesel prices with ever-expanding alarm. A fuel that used to be something of an afterthought for refineries is shaping up to become their star product and many analysts are suggesting there will be a series of price hikes in the near future before the supply manages to catch up with demand. There are at least four reasons that diesel prices have taken off. The first is that the average consumer is switching in ever greater numbers to the use of diesel powered private vehicles. This pattern has already been established in Europe where demand for diesel has jumped almost 1.9% in Germany, 2.3% in France and 3.7% in Spain. The increase in demand for diesel has jumped even more dramatically in the U.S., Mexico and Canada—up 12.3% in the U.S., 7.2% in Mexico and 2.3% in Canada. This is only the tip of the demand iceberg according to most analysts as there are more and more diesel options available for the average driver.

The second driver has been increased demand for diesel in China where the flexibility of the fuel has special value. China uses a considerable amount of its oil based imports to handle industrial uses and diesel is the preferred fuel. The third factor has been increased usage by the biggest diesel consumers in the world—the U.S. Navy and the freight rail sector. The fourth factor is that supply has become constrained by the fact that most refineries in the U.S. are not set up to produce diesel. Several have started the process of adding that capability but it will be over a year before these expansions come on line. Traditionally the U.S. has purchased diesel from other global refineries, but as global demand has risen, the U.S. has struggled to find capacity. The two sectors that will be feeling the pinch of high diesel prices most will be in transportation and in the farm sector.

Armada Strategic Assessment
The same factors that have been driving the per barrel price of crude to all time highs have been affecting diesel prices, but the additional pressures of demand will affect how this market evolves in the next year or so. The refineries are not entirely convinced that the demand they see now will hold and some of the larger companies have not yet started to expand capacity. There have also been some companies moving to add more, including Marathon, as they construct a new facility in Louisiana that will boost their diesel output. The Canadians are also pushing more diesel as the largest new refining facility to be built in years will be geared to produce two-thirds of its output in diesel. The facility expects to have product hitting the market by 2012 and that means a pretty substantial wait for price amelioration from that project. The bulk of U.S. diesel will have to come from outside the country in the next few years and that means some pretty substantial competition for the resource with the Chinese and Indians. The transportation companies are going to have to alter their fuel surcharges to respond to these prices and the farm sector will be hammered by the cost as well.

Source: Armada Corporate Intelligence

Thank You for Your Participation

NACM would like to extend its heartfelt thanks to all those who participated in our groundbreaking Business Credit Compensation Survey. This is the first comprehensive salary survey specific to the credit industry, and your participation was key to its success.

In appreciation of your time and effort, you will receive a free copy of the survey report, including valuable compensation benchmarking information for individuals in comparable positions and with similar backgrounds, education and experience.

A copy of the survey results will be available to non-participating members for a fee.

Survey results will be available soon. Stay tuned for details!

DoD Going Digital
Being “green” has become a universal theme. Everyone from big business to the federal government to the Vatican is now flaunting the desire and need to be eco-friendly.

In a move to completely eliminate paper from the process, a new Defense Federal Acquisition Regulation Supplement (DFARS) rule has been issued by the U.S. Department of Defense (DOD) which now requires contractors to use the Wide Area WorkFlow (WAWF) electronic system for submitting and processing payment requests. The mandatory switch won’t leave many in the lurch as the WAWF system has been gaining popularity. More than 145,000 contractors use it and another 2,500 new users are added each month. Far from the mere environmental implications, the agency feels the system is prudent to improve data accuracy, reduce the number of lost documents and to ensure contractors are paid in a timely manner. The system will also be used by contractors and subcontractors to receive reports on DOD contracts, unless they have official permission to use a different system.

Previously, the DOD allowed the use of the American National Standards Institute (ANSI) X.12 Electronic Data Interchange (EDI) and the Web Invoicing System (WinS). But these systems were limited because they were unable to process all DOD payment request types and do not allow the receiving of reports. Some contractors will still be allowed to submit ANSI X.12 EDI transactions to WAWF, though the 1,000 small entities that are still using WinS will have to switch over completely.

The change isn’t without its detractors or complaints. Some say that WAWF is too complicated, requiring too many screens and that credit invoices cannot be processed by the system. In response, the DOD clarified that WAWF is designed for payment requests only. It will not be altered to accept credit vouchers or invoices and the requirement for contractors to switch to WAWF does not extend to these items. As such, any credits due to the government still have to go through the Defense Finance and Accounting Service entitlement office. As for the complaints that the system is “too complicated,” the DOD stated that the multiple screens and data inputs are all in compliance with regulation Federal Acquisition Regulation (FAR) 32.905 payment documentation and process. The system pulls data to populate fields from the Electronic Document Access (EDA) system, meaning the information is not input directly into WAWF. Of course, this means any error in the data is an EDA issue, not a WAWF one.

The biggest grumblings came from the ground package delivery services sector and other contractors that invoice on a transaction basis. They expressed grave concerns that WAWF would no longer support measures like the Third Party Payment Systems (TPPS) and PowerTrack transactions. The DOD has amended the WAWF requirement to permit these contractors to continue to use certain TPPS for commercial transportation services.

Matthew Carr, NACM staff writer

To learn more on how NACM’s Government Business Group can help your company, please contact Debra Carroll at debc@nacm.org or 410-730-5352.

Free WAWF Training for Contractors…and More!

DFAS Columbus Customer Service Open House
May 14, 2008  (8:00am–4:00pm)
Contractors and vendors are welcome.

Click here for conference highlights and to register.

Surprise! Fed Cuts Rates…Again
Much like it did during the recession in 2001, the Federal Open Market Committee (FOMC) is trying its best to lure the economy out the dumps with rate cut after rate cut. Since August 17, 2007, the Fed has slashed its primary credit rate six times, dropping it from 5.25% to 2.25%, and the federal discount rate eight times, lowering it from 5.75% to 2.50%. These cuts also included an emergency cut of both rates on January 22 of 0.75% that was outside the normal FOMC scheduled meetings.

All of these cuts have spurned huge upswings in the stock markets while simultaneously arousing grumblings that the Fed is going too far. Investors and the markets have begun to count on the FOMC to slash rates, and if the cut isn’t as large as anticipated, the markets get sour.
Of course, history has its own tale to tell.

This is the same philosophy that the FOMC put into motion in January 2001 to battle the Dot.com collapse and the eventual increased global tensions that began with the September 11th attacks. Between January 3, 2001 and December 11, 2001, the Fed cut the primary credit rate 11 times, causing it to plummet from 6.00% to 1.75%. The discount rate was lowered 12 times, plunging from 5.75% to 1.25%. The FOMC held steady for the majority of its meetings over the next two years, though it cut both rates two more times, once by a half a point on November 6, 2002, and a quarter of a point on June 25, 2003. That means the primary funds rate was at 1.00%, while the discount rate dipped to a mind boggling 0.75%. To make another comparison, at the dawn of 1990s, the primary federal funds rate was 8.25% and the discount rate was 7.00%.

Currently, both rates are more than double what were the lowest percentages have been in the last 18 years, set in 2003. But, the current rate cuts have brought along with them growing concerns of inflation, and not without credence. For example, consumer price inflation hit 4.1% last year, which was the highest it has been in more than 15 years. Thrown into the kettle of worries is that there are many that look toward the dramatic boom that took place in the housing market during those incredibly low Fed rate years and cringe when seeing where that sector is today.  

Of course, Fed rates aren’t the salve to sooth all of the nation’s economic problems, nor are they a poison that causes fiduciary sickness. They are, however, undeniably an ingredient to both.

Matthew Carr, NACM staff writer

Good news—Registration Deadline Extended!

The registration deadline for NACM Independent Study Courses has been extended! Register for Business Law, Credit Law or Accounting by March 31, and receive a coupon for a complimentary 2008 NACM Teleconference!

NACM Independent Study Courses, presented online, are designed to provide a more convenient alternative to traditional courses, while also offering a network of support. Our courses allow the flexibility to choose the most opportune times for you to study and take exams. They grant the freedom from being required to attend scheduled classes; however, students follow a weekly syllabus to help stay motivated to complete their course.

For more information or to register (and get your free NACM Teleconference!), click here.

Post-SOX Audit Quality Has Improved, Say Nation's Audit Committee Members
Respondents believe most SOX-related changes have had positive impact
More than three-quarters of audit committee members who took part in a recent survey commissioned by the Center for Audit Quality (CAQ) rate overall audit quality "very good" or "excellent," and 82% say it has improved in recent years.

The survey offers an unprecedented look at the views of key players in the fight against corporate fraud—corporate board members who oversee the preparation and auditing of public company financial statements. The findings indicate that even in the face of market turbulence, audit committee members have high confidence in the quality of audited financial statements and consider the Sarbanes-Oxley Act (SOX) a positive influence.

About 53% of the audit committee members agreed that overall audit quality is "very good," while 25% described it as "excellent." About 87% said the risk of inaccuracies in financial statements due to fraud is "not very high," and 60% agreed that the risk declined after the passage of SOX. Audit committee members indicate they believe the risk of fraud and materially inaccurate statements is low due to tightened internal controls and increased external auditor scrutiny.

Nearly two-thirds (65%) agreed that investors should have more confidence in the markets as a result of the 2002 law.

"The findings confirm that public company audit quality is high and has only gotten better in recent years, according to the people closest to the process," said CAQ Executive Director Cindy Fornelli.

The views of audit committee members echo the results of a CAQ poll of investors last July. That survey found that 80%of investors had confidence in audited financial information, and 56% thought SOX was a good idea.

The CAQ periodically measures attitudes toward the capital markets as part of its mission to improve financial reporting and enhance investor confidence.

"The CAQ's research tells us that Sarbanes-Oxley is working—for investors, for audit committee members and for our capital markets," said Michele Hooper, co-founder of The Directors' Council and one of three public members on the CAQ's governing board. "We should always strive to do better when it comes to safeguarding the integrity of the markets, but it's good to know that we're making progress."

Participants in the audit committee survey represented a broad range of publicly traded companies. All served on at least one audit committee in 2007. Six in 10 served on two or more audit committees, and half were committee chairs. About 56% began their service as audit committee members prior to enactment of SOX.

Overall, 58% of the audit committee members said changes resulting from SOX had a positive impact. They offered several reasons for the improvement, among them:

• Increased audit committee oversight—92%
• Requirements regarding internal controls—87%
• Better communication within audit committees—85%
• CEO/CFO sign-off on financial statements—81%
• Increased emphasis on quality by auditors—77%
• More rigorous audits—76%
• Audit committee oversight of auditors—76%

Nearly all of the audit committee members (99%) said they devote more time to their committee work as a result of SOX. About 90% said they work more closely with external auditors.

The audit committee members expressed mixed views on the efficacy of audited financial statements filed with the U.S. Securities and Exchange Commission (SEC). Although most described financial statements as "easily accessible" (81%) and "relevant to investors" (87%), 78% said they are too complicated.

Since 1972, the SEC has encouraged the establishment of audit committees, a committee of the board of directors of publicly held companies. The Sarbanes-Oxley Act of 2002 expanded the role of audit committees by increasing their responsibility and requiring them to limit their composition to independent directors. Audit committees are charged with monitoring the internal control processes, the hiring and firing of external auditors and overseeing the audit and financial reporting processes.

The Internet survey of 253 audit committee members was conducted between January 7 and February 20, 2008, by The Glover Park Group. The survey questionnaire and complete results are posted on the CAQ's Web site at www.thecaq.org/newsroom/pdfs/auditsurvey.pdf.

Source: The Center for Audit Quality (CAQ)

3rd Annual NACM Scholarship Foundation Golf Outing

Sunday, May 18
7:30am-2:30pm
$125 per person

Grab your clubs and join us at Louisville's famous Quail Chase golf course for this year's Scholarship Foundation Golf Outing. Rated one of the premier courses to play by Golf Digest, Quail Chase was designed by David Pfaff and features gorgeous groves of Scotch pine, maple, oak and dogwood trees.

Starting bright and early on Sunday morning, buses will transport all players to Quail Chase from the Galt House. A luncheon at Quail Chase will immediately follow your morning on the links.

All proceeds from this event will go to the NACM Scholarship Foundation.

Credit Congress early bird registration ends March 28. Register here.

House Considers SBIR Modernization Proposals
The Small Business Innovation Research (SBIR) program is in for a makeover, with the House Committee on Small Business now considering a proposal that would increase the number of firms eligible to participate in the program and removes a number of administrative barriers that keep a number of entrepreneurs from accessing the program's funds, which help small businesses with research and development (R&D) costs.

"Small firms help our economy grow by bringing cutting-edge goods and services to market," said Committee Chairwoman Nydia Velázquez (D-NY). "For some, the initial research and development capital to make this possible comes from SBIR. But for too many others, the path remains closed."

"Our legislation addresses the underlying causes of this problem and ensures advances made possible by entrepreneurs will be leveraged more effectively for the benefit of the country," she added.

Created by Congress in 1982, SBIR was conceived several years prior to technological advances such as the Internet and omnipresent cellular phones. Although several changes were made to the program in 2000, witnesses who testified before the committee noted that for a program meant to spur innovation, SBIR remains out of step with today's technological realities.

"By filling the holes in SBIR's authorizing legislation, we are not just making the program better, we are ensuring it will yield greater returns for both small businesses and the average citizen," said Velázquez. "We are looking forward to bringing the legislation before the rest of Congress."

Jacob Barron, NACM staff writer

Distressed Business Services

Many of NACM's Affiliates are involved in a national network to provide assistance in the rehabilitation (if possible) or liquidation (if necessary) of businesses in severe financial difficulty. Working in conjunction with the business and its creditors, this service is designed to provide the business with the opportunity to re-establish its financial credibility through time and planning, or to assist in ceasing its existence while minimizing losses to its creditors.

The quick, efficient and cost-effective alternative to bankruptcy, NACM Affiliates provide forums and facilities to rehabilitate, if possible, and liquidate, if necessary, the affairs of financially distressed companies as a viable option to Bankruptcy Court proceedings. These alternatives are often less cumbersome for all involved and are less expensive—which means more return to creditors and more money left in the business to regain its footing.

While courts can take several months or more to get a reorganization plan started, NACM Affiliates can assist in getting a plan approved in as little as 30 days. Most helpful is the knowledge that experienced professionals are ready to step in at the most difficult time. NACM Affiliated Association staff members can serve as secretary to creditor's committees, provide other needed advisory services, and are fully aware of the prevailing laws and regulations relevant to each situation.

Click here to learn more about NACM’s Distressed Business Services.

Three Percent Withholding Measure—Your Comments Needed
Over the past year, NACM has informed you that on January 1, 2011, a mandatory 3% withholding measure on the value of most contracts for goods and services sold by businesses to federal and state governments, including local political subdivisions with contracting expenditures of $100 million or more, will go into effect.

NACM opposes this 3% withholding measure:

1. It will adversely impact businesses, which do not have the administrative or financial capacity to withstand this new withholding mechanism.

2. It will place a proportionately higher financial burden on all businesses engaging in commerce with these governments because it is not a progressive measure and places an undue burden on the already-squeezed cash flows of many small- and medium-sized businesses.

3. It may force those who currently do business with these governments to cease doing so, leading to less competition and driving up prices that the government has to pay for goods and services.

4. It could further weaken the U.S. economy, which depends a great deal on jobs and growth created by the business community, including the small and medium-sized businesses that are responsible for the majority of new job creation.

The IRS is now requesting comments about this mandatory withholding. NACM urges you to email Notice.Comments@irscounsel.treas.gov with your comments. Be sure to include "Notice 2008-38" as the subject line.

You can also send a letter in opposition to the 3% withholding measure to:

CCPA:LPD:PR (Notice 2008-38)
Room 5203
Internal Revenue Service
Ben Franklin Station
P.O. Box 7604
Washington, DC 20044

Please act quickly! The comment period closes on April 25, 2008.

For your convenience, click here for a sample letter.

Learn more here.

Networking Events

Credit Congress is your prime opportunity every year to network with your peers—make new professional relationships, maintain current ones and gain valuable insight into your field. Make the most out of this year’s Credit Congress in Louisville and attend these great networking events!

Louisville Slugger Museum & Factory Event: Hosted by NACM Designation holders and GSCFM alumni, this evening of dinner, drinks and networking will accompany a tour of the museum and factory. See where baseball history is made and browse the legendary collection of baseball memorabilia! Please note: An additional fee of $59 is required for this event, which covers the cost of dinner and admission to the museum and factory.

Don’t forget the Expo Grand Opening Reception, held on the evening of May 18th, the Beer & Browse Reception, during the evening of May 19th, and the Closing Night Party, the evening of the 21st! These events are open to full delegates and as a part of the registration fee. Browse the exhibitors in the Expo Hall and visit with friends, new and old, over appetizers and drinks during the Receptions. Credit Congress wraps with the Crossing the Finish Line Closing Night Party, with dinner and lively music. Don’t forget to wear your finest Derby attire!

To register for these and other networking events, click here. If you have already registered for the conference, use this second chance form, to add these events to your registration.

Thinking Globally, Acting Globally
International Business on the Rise for U.S. Companies, Survey Shows
Barriers to world markets have been steadily eroding for many companies in recent years. In a nationwide survey of senior executives, three out of five (61%) respondents said their companies are doing more international business today than five years ago.

The survey was developed by Robert Half Management Resources, and includes interviews with 150 senior executives—including those from human resources, finance and marketing departments—with the nation's 1,000 largest companies.

Senior executives were asked, "Is your company doing more business internationally, through international office expansion or a global customer base, than it was five years ago?" Their responses:

"As more companies experience an increase in international business, an exceptionally prepared workforce is necessary to compete on a global basis," said Paul McDonald, executive director of Robert Half Management Resources. "Firms today need a common understanding of cultures, languages and ethical standards to better serve customers across different countries and time zones."

McDonald also noted that financial regulations and reporting standards may have an impact on recruiting efforts. "Accounting and finance departments within firms that operate globally will require professionals skilled in both generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS)."

Source: Robert Half International