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January 1, 2011 BCMA - It’s All About You! Welcome to the latest issue of BCMA News! This month’s topics… 2. Core Competencies for Credit Staffers 3. Benchmarking Survey: Meeting Tips 4. A Six-Point Strategy for Handling Post-Audit Claims
Not sure how you rate with your staff? Why not put yourself up for a vote? Arkadi Kuhlmann, chairman and president of ING Direct USA, does that every year. He asks his employees if they want him to stay on, because “I don’t want to serve here,” he says, “unless I’ve got the commitment of people genuinely wanting me to serve.” Interesting idea. Some of Kuhlmann’s colleagues think he’s crazy to do it. But, as he sees it, keeping the people above him in the organization (the board of directors) happy is no more important than having the confidence and support of those working for him. The ballot is anonymous, of course, and it’s not a popularity contest. What he’s asking for is whether employees have faith in the organization, in their mission and in him. “It’s a big question,” he notes. And they’ve always voted for him to stay.
2. Core Competencies for Credit Staffers What are the most important "core competencies" for credit staffers? Well, one of them is "business perspective," according to one Iowa credit manager. Noting that staffers need to focus on DSO measurement and bad-debt measurement, he says, "they can't do this successfully if they don't understand what's taking place in our industry and in the economy in general. For example, there's a trend toward consolidation. This has an effect on credit and collections; we need to understand this trend and the effect it has." The company has a list of 15 core competencies that all employees should strive to master. Every January, each "member" (all employees are referred to as "members") rates him- or herself on a scale of "A" through "F" on each competency. The member's coach (manager) also rates the member "A" through "F" on each competency. Then they meet to compare their ratings, discuss any discrepancies, and come to a consensus on a grade for each competency. Next, they select three competencies for the member to emphasize during the year. One is a competency that both the member and coach agree the member is strong in. "The development plan focuses on ways to build this strength even more," he reports. "For example, if a member is strong in the competency of 'managing change,' the goal will be to become even more competent in this area, possibly even coaching other employees in how to become better in this area." The other two are competencies in which the member is weak. The goals here, obviously, are to strengthen these competencies. The member and coach also select between four and eight performance goals (major projects) that the member should strive to accomplish during the year. (Examples: learning to type on a keyboard, developing a new product). One project that a member of the credit department tackled related to a credit-scoring model. "The member designed and implemented this model, which also provides management reports on the overall risk of our portfolio," he says.
3. Benchmarking Survey: Meeting Tips Our recent benchmarking survey on meetings asked participants for their best suggestions on running meetings. The following tips emerged, and we think it definitely deserves the label “Best Practices:” • Put together a solid agenda • Be prepared • Only include those who share ownership of the issue • Start and end on time • Engage the attendees • Don’t mix strategic and tactical • End with next steps clearly defined. Click on the first three links at the bottom of this page for the complete survey results! 4. A Six-Point Strategy for Handling Post-Audit Claims
In the past, we dealt with post-audit claims as best we could. Often the supporting documentation was inaccurate or incomplete, and the customer gave us 30 days or less in which to research the claims--even though their post-audit team had worked on them for months. As we gained experience, we developed these procedures for handling post-audit claims: 1. The first thing we do is to determine the age of the claims. If they are more than four years old, the claims are beyond the statute of limitations and are invalid. We inform the customer that we will not research or allow any claim more than four years old. 2. We examine the paperwork provided by the post-audit team. If there is not enough supporting documentation to determine the validity of the claims, we notify our customer (not the post auditor) in writing which claims have not been substantiated and what documentation is needed. 3. We require customers to provide ALL of the necessary paperwork to substantiate their claims. This can be a contentious issue--but normally we prevail by remaining adamant. The post auditor must provide copies of all of the required supporting documentation. 4. Since our ongoing business relationship is with the customer, we do not deal with the post auditor. We recognize that post auditors have a vested interest in making things difficult for the creditor trying to evaluate claims. In some cases, the goal of the post auditor is to make the problem so complex that the creditor either agrees to everything or negotiates a settlement, so we find it in our best interest to work directly with our customer. 5. If the customer takes a deduction before we have completed our analysis, we put the account on credit hold. But before this happens, we warn the customer and the salesperson that any post-audit deductions taken before we have completed our research will result in an immediate credit hold. 6. We never settle claims as an alternative to doing the work necessary to either (a) validate the post-audit claims or (b) to disprove them. We will offer a settlement if our investigation reveals that we made certain errors, but our offer is always substantially less than the claimed amount. Post audits are a challenge, but not an insurmountable problem. To learn more about subscribing to Credit Today, check out our web site at http://www.credittoday.com/ Benchmarking Survey on Meetings Looks at the Worst Meeting Experiences - Learn What to Avoid! Credit Executives Sharply Divided on Credit Scoring Benchmarking Extended Terms- Survey Participants Weigh In on the Process With Some Great Advice |
