APG Warns of Counterfeit Payments

APG has had recent reports of counterfeit checks being issued as a form of payment. The initial order was placed after a brief email communication. Memory cards seem to have been the popular item, yet again. Please see the information below to cross-reference your records.
 
TeslandGroup Limited
56, Mayowa Street
Cotonue, Benin Republic
229 802 387 3700
Contact name: Henry Davies, Import Manager

Business Credit's Short Story Contest

Credit Words: Real-life Stories of Victory and Defeat encourages you to recount your biggest success (or failure), proudest moment or most humorous situation you've experienced during your career, among many other possibilities.

Down but Not Out, Houston on the Mend From Hurricane Ike
Hurricane Ike began life as an easterly wave in mid-August. The trough of low pressure made its way across Africa and into the Atlantic Ocean, where at the start of September it would become the inauspicious sounding "Tropical Depression Nine." In an extremely short amount of time, the storm became one of horrific magnitude as it set its sights on the Gulf Coast of the United States. Thankfully, before making landfall on September 13th, Ike had lost a considerable amount of power, but still came ashore near Galveston, Texas as a Category 2.
 
The damage created by Ike was astounding. It became the third costliest hurricane in U.S. history, just behind that of monstrosities Hurricane Andrew in 1992 and Hurricane Katrina in 2005. Hurricane Ike has been charged with 150 deaths, 68 of those in the United States, and 33 of that number in Texas. The arc of destruction stretched from Texas and Louisiana, to Indiana, Missouri, Ohio, Pennsylvania, Illinois and Michigan, affecting several NACM Affiliates, then dropping a record amount of rain in Canada.
 
Power outages affected millions.
 
In the middle of Ike's path was the San Luis Resort on Galveston Island, which was to be home to the All South Credit Conference on September 21st. Needless to say, the conference was cancelled. NACM Houston staff was hit hard as well, with the vast majority of them losing power and many without tap water.
 
"Being without electricity is the hardest part," said Kathleen Quill, CAE, CCE, president, NACM Houston. "It was hot and it was dark at 8:30. A person's tolerance for that is about two days, and some of our staff went without electricity for 16."
 
The Houston staff went to work helping their communities and rebuilding their own lives. They manned FEMA distribution centers and picked up and delivered generators for those that didn't have power. They took care of one another, and each day the departments took turns cooking a hot meal for each other, making sure there was enough to send home to the families of the staff.
 
"By the end, everyone had generators, but at eight hours for five gallons, that hurts after a while," said Quill. "It is hard to focus on anything but getting your home business done before dark when you shut down. You didn't have any fresh or frozen food at all—no milk, eggs, fruit or meat. Also, it is hard to be cut off from the world. I had a battery operated radio, but all the news the rest of the world was getting by television and Internet was inaccessible to us."
 
But Houston was not forgotten. Affiliates and members rallied around with care packages and any help they could provide.
 
"One of the coolest things that happened was the response from other southern region NACM affiliates," admitted Quill. "Several sent financial assistance by means of what was their All South registration. We got care packages of batteries, gas cards for generators and non-perishable food from NACM Dallas and NACM New Orleans."
 
She added, "NACM Tampa stepped up to help us with our computer support. It was amazing."
 
Quill said that Houston members are all in recovery mode, but anything other members do to support NACM services—credit reports, collection services, etc.—helps get them back on their feet.
 
"Essentially, this area was shut down for two weeks, not just us but our members' companies," said Quill, who pointed out on the Monday after the storm, NACM Houston made $212. "Monday, member businesses were still getting power for the first time."
 
Cancellation insurance made sure that the affiliate wasn't hurt financially, though the bitter disappointment at not putting on a conference they had worked so hard toward is undeniable. The money from the All South conference was refunded to attendees, sponsors, donors and exhibitors, but there were those who saw an opportunity to put that money to work by helping those in need.
 
"While we were still reeling from the hurricane, a good many affiliates and exhibitors, led by Dottie Rath in Dallas and Rudet Fountain and Dean Middleton at ACM, generously donated those dollars to a recovery fund for our staff and community," said Quill. "And we are unspeakably grateful."
 
Recovery efforts continue to proceed well. 
 
"Our construction trade members are hopping and that is a good sign that the community is recovering," said Quill. "It will be a long road for the coastal communities, but at this time the very last of our staff got power back last weekend. Five-hundred stop lights are still out, so driving is interesting, but we're coming back!"
 
Since All South was canceled, the Western Regional Credit Conference (WRCC) has extended an All South Relief offer to all All South registrants. So far about nine registrants have taken the offer.
 
Members can read more and see photos about the recovery efforts here. Those interested in offering assistance can contact the NACM Houston office at 281-228-6100.
 
Matthew Carr, NACM staff writer

CFDD National Conference

There's still time to register for the CFDD National Conference on October 22-25, 2008 in Kansas City, MO. Visit us and see what the conference has to offer. Click here.
 
Click here for a sampling of the things to experience while in Kansas City, including any of the nearly 100 barbeque joints. In fact, barbeque is so popular in Kansas City, it has its own club, the Kansas City Barbecue Society, formed in the fall of 1985!
 
Why CFDD?

• 30 chapters operating throughout the United States
• Fostering educational opportunities, networking, professional certification and scholarships
• Designed to aid the beginning credit professional as well as those at the mid- and executive-levels
• Membership available to all credit professionals who are members of NACM or CRF; direct membership available in areas with no CFDD chapter

NACM Survey Shows Government Business Popular, Albeit Painstaking
NACM's most recent monthly survey, which asked "Does your company do business with the local, state or federal government?" showed that government business is popular among participants with 70.8% of respondents answering "yes" and the remaining 29.2% responding "no." Comments left by many participants, however, indicate that the process of getting paid by the government can often be a source of stress, despite governmental efforts to speed up payment cycles.
 
"I have found that government agencies are more of a stickler on paperwork issues than your normal everyday customer," said one respondent, whose concerns were echoed over and over by other frustrated participants. "It is extremely difficult. Each federal account has different ways of needing information from us. There is no standardization," said another respondent. Others said simply "It's difficult at best," and "They can be a real pain in the neck."
 
Some respondents noted that there are things credit professionals and companies can do to make the process a bit easier and that organization is key when it comes to invoicing a governmental entity. "It is critical to have documentation (i.e., PODs, bills of lading, contracts if required) in order and your vendor account set up properly with the respective agency to avoid payment delays," said one participant. "Also, verifying where and how invoices should be sent and who to contact to resolve disputed invoices. The governmental agencies often take longer to pay than other customer accounts, but that can be the exception and not the rule if you get everything organized from the get-go."
 
Another participant added that, as with so many other accounts in the world of B2B credit, relationships were key when looking to get accurate and speedy payment. "As everyone knows, it can be difficult to collect at times, but I've learned over the years that building positive relationships with your contact at the agency or entity makes it easier to collect," said the respondent.
 
A number of those surveyed noted that government business only took up a percentage of their business or that they sold to them indirectly, selling to distributors or others that do. "Some of our customers do, which of course slows down the receivables," said one participant. "It's not in our contract but they use the way the government pays them to delay paying us."
 
NACM's October survey is now live and asks respondents about their biggest concerns for the coming year. To participate, visit www.nacm.org.
 
Jacob Barron, NACM staff writer

Top Hiring Mistakes—And How to Avoid Them

Hiring mistakes can be made in an instant, but they often require a lot of money and time to correct. While not all hiring mistakes can be avoided, many can be prevented with a strategic hiring process. This teleconference will teach you how to establish an effective hiring system that can help you avoid many common—and costly—hiring mistakes.
 
Join Fred Getz, executive director of the Salaried Professional Service at Robert Half International, October 15 at 3:00pm as he guides you to hiring only the employees that are right for the job, not just filling space. Click here to register.

Getting Involved in a Creditors' Committee When a Purchaser Goes Into Chapter 11
Joining a creditors' committee can often give a commercial creditor whose customer has gone into Chapter 11 a front row seat into the filing company's reorganization and a chance to work with other like creditors in working to get the most money for unsecured creditors. The process of joining and participating in one, however, can often seem daunting to some, which is why Mark Berman, Esq., partner at Nixon Peabody, LLP, recently offered his insights into the nuts and bolts of creditors' committees in his NACM-sponsored teleconference, "Getting Involved in a Creditors' Committee When a Purchaser Goes Into Chapter 11."
 
Berman opened his presentation with a description of how a creditors' committee comes to be, specifically how participants are invited to join or appointed to the committee. "The appointing is done by the office of the U.S. Trustee, which is part of the Justice Department, not part of the court system per se" he said. "One of the first things the trustee does is they'll send out a letter asking whether or not a creditor would like to join a committee."
 
The committee itself isn't just a collection of whoever is owed money and wants to join; it also has to be representative of all the debtor's unsecured creditors. "The Bankruptcy Code says the committee is supposed to adequately represent the class of creditors as a whole," said Berman, who noted that other options exist in the instance that the group is not representative, but that trustees are often slow to agree to it. "There is the possibility that the U.S. Trustee's office could be convinced to create another separate committee, but it is not something they do at the beginning of a case and a step that they are reluctant to take in complicated cases."
 
Once the initial group of interested creditors has been contacted and a time has been set for them to meet with the debtor, the meeting will take place and the debtor will offer an explanation and plan for the Chapter 11 case, including answering the creditors' questions regarding what happened or what's going to happen to the company. Berman described these meetings and then discussed the role of committees in Chapter 11 cases now, compared to Chapter 11 cases 20 years ago, the changes included in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 and strategies for creditors to be successful while participating in meetings.
 
For more information on NACM's teleconference series, or to register, click here.
 
Jacob Barron, NACM staff writer

Collections

NACM Affiliate collection departments collect your past-due accounts, large or small, as quickly as possible. NACM collection departments are firm, but fair, with your customers, with the primary objective to collect your money.
 
Usually, the first step after the account is placed is to notify your debtor and make an immediate demand for full payment. The intensity of the phone calls increases if payment is not made. If direct personal contact is appropriate, NACM Affiliates have many resources, including the ability to draw on a nationwide network of Affiliates—with offices located throughout the nation. When necessary, NACM Affiliates will forward an account to one of the bonded attorneys in its tried and proven network. NACM Affiliates exhaust all collection possibilities before recommending litigation to you. All funds collected are placed in separate trust accounts.
 
NACM Affiliate collection services include:

• Letter Services
• 10-day Demand Service
• Action and Litigation
• Litigation Service
• Status Reports

CMA Member VeriSign Certifies Whole Credit Department

Read more about who was certified and why this was an important VeriSign objective in the Member News section of the November/December issue of Business Credit.
 
We want your Member News too! Submit details and applicable high-resolution photos by November 14 for inclusion in the January issue.
 
Business Credit is now also accepting articles and association news for the January issue. Have a best practice you'd like to share? Any tips or thoughts for dealing with issues throughout 2009, or reflections on 2008?
 
For guidelines on submitting, or to submit an article, email bcm@nacm.org.

Plan B: The Lure of Pork Barrels
The housing market has been a cancer on the nation's economy. Illiquid mortgage assets have brought the collapse of banks and financial institutions, crippled growth and led to a credit crunch that continues to exasperate the effects of the toxin. Casualties continue to mount up with Bear Sterns, Lehman Brothers, Fannie Mae, Freddie Mac, Indy Mac, Wachovia, Washington Mutual, AIG, Merrill Lynch, Countrywide and a growing list of others that have bled out hundreds of billions of dollars from the financial foundation.
 
Beginning last year, the Federal Reserve Board launched an offensive, slashing rates, holding emergency meetings and developing vehicles like the Term Auction Facility (TAF), which has been ramped up substantially to $300 billion per month from its now seemingly miniscule $20 billion origins, with the Fed wanting to inject $900 billion of new liquidity into the banking system by year's end. But the moves were apparently too late; the sickness had spread. Municipal securities and bonds faltered, auction rate securities markets completely froze and off-balance sheet investment vehicles were written down as debt bundles containing mortgage assets were discovered to be a widespread infection.
 
Banks reined in lending terms with their customers and with each other. Terms like "panic" and "crisis" were used more frequently and eventually became apt.
 
As September inched toward a close, salvation was hailed in the form of a joint Central Bank and Department of Treasury $700 billion economic bailout plan that sought to simply wipe mortgage-related assets, whole loans and other blockages from the financial bloodstream. The plan was to have the government absorb those troubled assets by purchasing them from entities, relieving institutions of their pressures so that business could return to normal.
 
Democrats panned it as a "blank check" for Wall Street. Republicans called it "risky" with "no guarantee of success," but after long hours of negotiation between Congressional leaders, the Fed and the Department of Treasury, it appeared the largest bailout plan in the nation's history would become a reality.
 
Then Monday arrived and the House surprisingly torpedoed the recovery package. It's hard not to speculate that members did an about-face on a bill that they were expected to pass because November 4th is nigh. Many have to go back home and rev up their campaigns for re-election. Following the House vote, the stock market tumbled 777 points, which appeared to serve as a notice of urgency to lawmakers.
 
The bill had stumbled in the House, but the Senate remained.
 
Presidential hopefuls Senators Barack Obama (D-IL) and John McCain (R-AZ) left the campaign trail to give floor speeches and herald the bill's passage. In a matter of hours, the Senate overwhelmingly adopted the 2008 Emergency Economic Stabilization Act (EESA) and, before sending it back to the House for a second vote, they took time to stuff the legislation full of tax breaks and sweeteners to lure Representatives from "Nay" to "Yea."
 
The plan worked. Fifty-nine legislators—26 Republicans and 33 Democrats—were persuaded to switch their votes. And on Friday, the House did not touch any part of the text of the Senate version of the bill and passed it 263-171, a substantial turnaround from Monday's vote of 228-205.
 
"This is only the first step," said Representative Rahm Emanuel (D-IL). "The middle class is working harder, earning less and paying more. In the last seven years, median household income has dropped $1200 and costs for energy, health care, as well as college education have gone up $4800." The economic recovery package includes Emanuel's capital gains tax gap legislation that he has fought for three years to get passed.
 
The bailout plan establishes the Troubled Asset Relief Program, which gives the Treasury Department the power of buy up to $700 billion worth of mortgage-related assets over the next two years. The EESA would also require the Treasury to modify troubled loans, such as predatory loans like subprime mortgages, wherever possible. Countrywide, now a cog in the Bank of America behemoth, began similar maneuvers on Monday for its own delinquent mortgage holders. The EESA also directs all federal agencies to modify loans that they own or control.
 
To ensure taxpayer protection, the legislation requires companies that sell their assets to the government to provide warrants so that taxpayers will benefit from any future growth these companies may experience. And the bill would also require the President to submit legislation that would cover any losses to taxpayers resulting from the bailout. The federal insurance for bank deposits will also be temporarily increased from $100,000 to $250,000.
 
Fed Chairman Ben Bernanke applauded the Congressional action, saying, "It demonstrates the government's commitment to do what it takes to support and strengthen our economy. The legislation is a critical step towards stabilizing our financial markets and ensuring an uninterrupted flow of credit to households and businesses."
 
But, the EESA is bloated with pork barrels and tax breaks worth over $108 billion over the next year. It includes an exemption of an excise tax of 39 cents on the first sale of certain wooden shafts used for children's arrows. There is also an amendment that allows racecar track owners to write-off the cost of their facilities on taxes over seven years, not to mention a rebate against excise taxes charged on rums imported from Puerto Rico and the Virgin Islands and a sales tax deduction from federal taxes for residents of Texas, Nevada, Florida, Washington and Wyoming. There are extensions of research credits, a Payment In Lieu of Taxes (PILT) package for rural schools, a tax break for Exxon Valdez plaintiffs, wool duty refunds and an economic development credit for American Samoa. And, in an effort to keep film and television production companies in the U.S., the EESA includes $478 million in tax incentives for them.
 
"Hard choices have to be made," said Rep. Diane Watson (D-CA). "My initial reaction to the $700 billion request from the Administration to stabilize the credit markets was suspended disbelief." Watson, who has been a supporter of the film and television tax provisions for many years, threw her support for the EESA on Friday.
 
Treasury Secretary Henry Paulson said that his agency will move rapidly to implement the new authorities that it has been granted. It is not buying all mortgage-related assets from every institution. To help facilitate the process so the government isn't stuck holding a bag of worthless assets of its own, the Treasury Department will add more financial analysts, asset managers and attorneys to its staff.
 
"There is no one-size-fits-all solution to alleviating the stress in our financial system," said Paulson. "Each situation will be different and we must implement these new programs with a strategy that allows us to adapt to changing circumstances and conditions and attract private capital. The broad authorities in this legislation, when combined with existing regulatory authorities and resources, give us the ability to protect and recapitalize our financial system as we work through the stresses in our credit markets."
 
Key for Democrats was that the EESA will not allow executives of companies selling their troubled assets to the government to walk away unscathed. In order to participate in the bailout program, companies must forfeit certain tax benefits and in some cases, limit executive pay. It also cuts the strings on "golden parachutes" and requires all unearned bonuses to be returned.
 
Matthew Carr, NACM staff writer

Protect Your Assets, Get the Best Working for You

Unemployment claims on the rise, but credit and finance professionals are more important for your company's bottom line than ever. Protect your assets, keep your credit positions and fill them with high-quality talent.

Discover who's out there with NACM's Careers in Commercial, Credit, Collections & Finance (C4F)—the best online resource for employment connections in the business credit industry. No more endless piles of resumes from unqualified applicants lacking relevant experience. No more countless returns at other job board sites to sift through.

C4F offers job seekers and employers unmatched exposure by focusing on the credit industry.

Contracting Reform Vaults to Prominence As Election Year Issue
Capitol Hill has recently buzzed with activity regarding contracting reform, following the Senate's passage of the Clean Contracting Act, found in title 8 in the National Defense Authorization Act for Fiscal Year 2009. The bill was recently referred to the White House following its passage by both houses of Congress and aims to make the complex world of federal contracting a bit more fair.
 
"The Clean Contracting Act requires agencies to enhance competition in contracting, limit the use of abuse-prone contracts, start the effort to rebuild the federal acquisition workforce, strengthen important anti-fraud measures and increase transparency in federal contracting," said Henry Waxman (D-CA), chairman of the House Committee on Oversight and Government Reform. "One important provision would limit the length of no-bid contracts awarded in emergencies to one year. This provision would end the abuses that occurred after Hurricane Katrina, when many 'emergency' contracts were allowed to continue for many years," he said, noting that specific types of contracting were also on the bill's chopping block. "Another provision would require regulations and reporting on the use of cost-plus contracts, which provide contractors with little incentive to control costs."
 
"Spending under this type of contract grew over 75% between 2000 and 2005," he said.
 
Another elected official hot on cost-plus contracting is Republican presidential candidate, Sen. John McCain (R-AZ). Just a day before the Clean Contracting Act was cleared for the White House, McCain called for an end to cost-plus contracting in his first debate with Democratic candidate, Sen. Barack Obama (D-IL). "We have to do away with cost-plus contracts," said McCain, adding that the government should rein in spending altogether, particularly in the Department of Defense.
 
"We need to have fixed-cost contracts," he said. "We need very badly to understand that defense spending is very important and vital, particularly in the new challenges we face in the world, but we have to get a lot of the cost overruns under control."
 
While Obama didn't refer to contracting specifically, he did point to legislation he supported in 2006 that led to the creation of www.usaspending.gov, where the public can access information regarding agency contracts and spending, in the interest of increased accountability.
 
Action on the Clean Contracting Act is still pending and the White House has so far remained silent on the subject.
 
Jacob Barron, NACM staff writer

Barroso Calls for Globalization Agenda, Multilateralism in Recent Speech
In a recent speech at Harvard University, European Union (EU) President José Manuel Barroso called for an "Atlantic Agenda for Globalization," offering advice to the next President of the United States regarding the inescapable forces of globalization and the emergence of new economic powers. During his Paul-Henry Spaak lecture, Barroso, in the form of a letter, spoke directly to the next President, whether it be Republican candidate Sen. John McCain (R-AZ) or Democratic candidate Sen. Barack Obama (D-IL).
 
"We need renewed politics of global engagement, particularly with international institutions," he said. "The EU and the U.S. must now join forces towards such a new multilateralism, working hard with our partners around the globe to show that it is in their interests as well as ours to work for effective institutions."
 
Barroso acknowledged that as certain markets continue to boom, the picture at the top of the global economy may grow to include several new faces, and that this is a necessary shift. "We have to make room at the top table for others, because that is the only way we can consolidate and strengthen a stable, multilateral world, governed by internationally-agreed rules," he said. "The strategic effect of our partnership, so positive in the past, will start to evaporate unless we succeed in complementing it with a new politics of global engagement that reaches out to the world in search of new partnerships and effective multilateral strategies."
 
"It is in the interests of both the EU and the U.S. to deepen their partnership futher," he added.
 
Jacob Barron, NACM staff writer

September's Credit Manager's Index: Economic Contraction Now a Reality
Index reaches historic lows with sales the hardest-hit component in both sectors
 
When credit managers sent their responses in this month, they also sent along a message: "Welcome to the recession." The seasonally adjusted Credit Manager's Index (CMI) plummeted a record 3.3% to reach a historic low of 47.4, clearly indicating economic contraction. The survey resulted in numerous other negative records. All 10 components of the Combined Index fell, leaving eight below 50 and seven at record lows. The manufacturing index fell 2.5 to a record low of 47.9 as seven components fell, leaving a record seven components below 50 and three at their lowest levels ever. In the service sector, the index fell 4.2 to a record low of 46.8 as a record all 10 components fell, leaving a record eight below 50, and three of the components at their lowest levels ever. Sales were particularly hard hit in both manufacturing and service sectors, falling 12.2 and 10.1 respectively, both to historical lows and both below 50.
 
"While the economy has been deteriorating since the end of last year, its rate of decline is clearly increasing," said Daniel North, chief economist for credit insurer Euler Hermes ACI, who analyzes the data and prepares the CMI report for the National Association of Credit Management. "The combined weight of high energy prices and a ruined housing market is now being compounded by the ever-worsening conditions in the credit markets," he said. "In response, the Fed has cut interest rates and pumped hundreds of billions into the banking system, but no one will lend for fear that the financial system is on the verge of a meltdown. The credit markets need a big shot of confidence to be unclogged, or credit managers will become increasingly gloomy."
 
The seasonally adjusted manufacturing sector index fell to a record low of 47.9 in September. North said, "Despite continuing improvement in international business, manufacturers were once again hurt by the housing market." Responses of note include a flooring business manager offering a real-life example of how the credit crunch is hurting the economy, stating that weakness in the construction market "is compounded by the fall of many lenders who supported the industry." A manufacturer of telephone equipment said, "Times are tough both for ourselves and our customers. It's a tough economic climate for everyone." And a manager in the building materials industry made the economic landscape starkly clear, noting simply that the "marketplace is brutal."
 
The seasonally adjusted service sector index fell to a record low of 46.8 in September. North reported a respondent in the repair shop industry asserted glumly that "It's going to get worse before it gets better." A respondent in the freight transportation arrangement business noted that there were "many more dispute(s), payment plans and slow payments." And another in the same industry was a bit more blunt about the whole situation: "Bankruptcy reform forgot to include activating debtor prisons."
 
On a seasonally adjusted basis over the past 12 months, the manufacturing index fell 5.8 while the service index fell a record 9.1. "Clearly the significant downward trend reflects an economy which has been weakening for some time, and now seems to be on a somewhat steeper downward trajectory," said North. "Certainly the clogged credit markets have contributed to this decline on top of high energy prices and the abysmal housing market."
 
The complete report may be viewed here.
 
Source: National Association of Credit Management