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By clicking on First National Merchant Solution's logo, you will be leaving this web site. Products and services accessed through this link are not provided or guaranteed by your Business Credit Management Association (BCMA). First National Merchant Solutions may have a privacy policy that is different than your BCMA Affiliate. Please review First National Merchant Solutions privacy policy. BCMA MEMBERS NACM Credit Services, Inc. Pennsylvania Association of Credit Management Wisconsin Credit Association GOT AN IDEA? Would you like to contribute to the BCMA Newsletter? The most important part is your idea. We can handle the polishing. Just write to us at BCMAEditor@ CreditToday.net with your idea!		July 1, 2008 BCMA - It’s All About You! Welcome to the latest issue of BCMA News! This month’s topics… 1. Nine Questions to Ask After You've Heard: "The Check Is in the Mail" 2. Eliminate Antiquated Expressions from Your Collection Letters 3. Do Your Invoices Measure Up? Five-Point Invoice Checklist 4. What Are the Top Mistakes that Credit Managers Are Making with their "Scorecards?" 5. Even Worse Than Channel Stuffing: "Bill and Hold" 1. Nine Questions to Ask After You've Heard: "The Check Is in the Mail" Of course, everyone in credit is told that "the check is in the mail" on occasion. And what you say and do after you hear that can be very important. Collection expert Tim Paulsen of Toronto offers a series of the questions you should ask after hearing that the check is in the mail: When was the check mailed? Who mailed the check? What invoices were being paid with that check? Why was it mailed so late? How much was the check for? Why wasn't it sent priority or delivered? Confirm: bank, type of account, check #, date on check Where was it mailed? Anyone's attention? Was there a reference number on the check? Back to top 2. Eliminate Antiquated Expressions from Your Collection Letters Well-known credit consultant and author Michael Dennis of www.CoveringCredit.com recommends keeping your collection letters short and specific. If you haven’t retooled your collection letters in some time, you might want to look at them critically. Do they have any of the following expressions? Here’s Dennis’ list, along with suggestions for replacement: Enclosed herewith…............................Please find enclosed We urge and recommend that….........We recommend At your earliest convenience..............As soon as possible For your perusal...................................For your review Thanking you in advance..................Thank you It is incumbent on you to...................We need you to We are in receipt of............................We received It is our belief and opinion.................We believe Back to top 3. Do Your Invoices Measure Up? Five-Point Invoice Checklist We always say that consistent application of the basics - the things you learned in the first year on the job - is the most important way to establish excellence. Time and again, we learn from the best that it's the little things - done properly time after time - that really matter. To that end, Westbury, NY-based outsourcer and collection agency STA International has produced a nice little booklet entitled "The Essential Guide to Getting Paid - practical solutions to improve cash flow," which has a number of items we feel are worth noting. Here is their checklist for proper invoicing. Do your invoices have all of these items displayed clearly? Ensure your invoice and statement prominently show (a) your payment terms, (b) the date the payment is due, and (c) your late payment interest charges policy. Provide telephone number and contact details to enable the customer to pursue any queries. Ensure that you are sending accurate and correct details on your invoice. Ensure that your invoice reaches the right person. You should know who is responsible for approving your invoice. Ensure that you have the correct details for chasing payments (i.e., contact name, number, fax, and e-mail of the accounts payable department). Back to top 4. What Are the Top Mistakes that Credit Managers Are Making with their "Scorecards?" We asked consultant Pam Krank (www.creditdept.com) recently and here are her top three: Using Balance Sheet Data Instead of Cash Flow Data - The main mistake Krank sees over and over is that people still focus on the balance sheet instead of the cash statement. Not Linking - A second big mistake is not linking subsidiaries to parent companies, even when they have the ability to do so, with a program such as SAP. "You need to watch this constantly," she says, or you won't know your true exposure. She cites the example of Bakeline, which filed bankruptcy. She's spoken with credit execs who thought that it was still a part of Keebler, which sold it a while back. Nothing on the Ability to Raise Cash - Most score cards have nothing on the ability to borrow or raise additional capital, Krank says. You should always know how much of their credit line your customer is using. It's a real warning sign when bank lines are used fully, and there's no other access to additional capital at a business. But this information is not on most scorecards. Back to top 5. Even Worse Than Channel Stuffing: "Bill and Hold" "Bill and hold" is a similar concept to channel stuffing, but it's even worse, says one credit exec. When you bill and hold, the product doesn't even go out the door. "I've seen this-it happens more at the end of the year," he explained. In this situation, "there are guilty parties on two sides, and it's very bad. It's awful from a revenue recognition standpoint. "I'll give you a great price and extended terms on 45 truckloads of product. But the distributor says, 'Fine, I'll do that for you, because we play golf a few times a month. But here's the deal. I don't have room in my warehouse, so can you just bill me for it, but I want you to hold it.' Sometimes this will occur when the product hasn't even been made yet." "And here's something else that will happen. Because you have two guilty parties, at the end of the year the customer will say 'I didn't burn up all my dollars on several purchase orders this year. It behooves me to spend it because if I don't use it this year, I won't get the budget next year. So, what I'd like you to do is even if you don't have the product made yet, bill me so I can get it in in this calendar year.' I don't know if you'd call this channel stuffing, but it's a cousin to it." If channel stuffing is a slippery slope, then this practice is much further on down. Back to top To learn more about subscribing to Credit Today, check out our web site at http://www.credittoday.com/ Productivity Opportunity Checklist - How Productive Are You- Where Should You Improve- Survey Results: Credit Executive Attitudes Towards Outsourcing Strongly Affected by Experiences With Receivables Outsourcing Survey Results- Majority of Credit Pros Believe We're DEFINITELY in a Recession - Coping Strategies Detailed Survey: How Credit Leaders Are Dealing With Today's Tough Economic Climate; Insights & Action Items You Can Use Benchmarking Collection Agencies- Tips for Maximizing Your Relationship With Your Collection Agency *Back to top*