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N A C M O r e g o nBusiness Credit Journal

7931 NE Halsey, Suite 200 | Portland, Oregon 97213 | Tel 503.257.0802 or 800.622.6985 | Fax 503.257.0247 | www.nacmoregon.org

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Credit Enhancement— 2nd Installment Cash-In-Advance & Cash-On-Deliveryby Johnny White, Esq., Blakeley & Blakeley, LLP

CIA is short for “cash-in-advance” terms (in the credit context, at least), and means that full payment is due before any merchandise will ship. COD is short for “cash on delivery” or “collects on delivery.” In a COD transaction, payment is made at the point of delivery, or the goods can be returned to the seller. Where an independent carrier is used to deliver the product, which will not collect payment on the vendor’s behalf, the expectation is that the payment will be immediately mailed or transferred. Both CIA and COD provide a more risk-free way of shipping goods to a troubled debtor for two reasons.

First, it ensures payment for the goods you are shipping. While extending credit might boost sales, it comes with the obvious risk of non-payment when the debt falls due. CIA or COD terms require immediate payment. Payment can be made by a safe and secure method such as wire transfer (see more below) or cashier’s check; but, even if it is only made by personal check, and if, assuming the worst, that check bounces, you will know early enough to be able to exercise reclamation rights under the Uniform Commercial Code.

Section 2702 of the Uniform Commercial Code provides for a seller to stop or refuse delivery upon discovery of a buyer’s insolvency. It also provides for a ten day window in which a seller can demand return of goods after supplying to a debtor on credit. Further, these reclamation rights are recognized and enforceable when a debtor files bankruptcy. In other words, short of criminal acts of fraud, in which your buyer gives you a bad check, and then absconds with your goods, CIA and COD terms are bullet proof ways of getting paid for what you supply.

Second, payments made by a debtor on CIA or COD terms are not avoidable preferences. Under the bankruptcy code’s preference provisions, all of a debtor’s transfers of property in the 90 days preceding its bankruptcy filing are at risk of being clawed back by the debtor’s estate if deemed “preferential,” i.e. favorable treatment was given to one creditor over another. The preference provisions of the bankruptcy code can lead to some galling results where creditors, already stuck with substantial unpaid balances, are actually required to reimburse the debtor’s estate.

However, there are certain defenses to preference actions; and one of those defenses is the “Contemporaneous Exchange of New Value” defense. Section 547(c)(1) of the bankruptcy code provides that “[t]he trustee may not avoid … a transfer … to the extent that such transfer was—

In This Issue

Credit Enhancement p 1

President’s Message p 2

International Corner p 3

New Designee’s p 4

Member Profile p 6

Benchmark Report p 8

DSO Results—3rd Qtr. p 8

Healthiest Employer’s p 10

NOF Scholarship Funds p 11

Education Schedule p 10

BCLC Webinars p 10

Credit Techniques p 11

Contacts p 15

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November 2011

Message from the President We recently received a paper from CRF on the topic of “Current Trends in the Practice of Assessing Late Payment Service Fees.” There were a number of interesting statistics:

• In the survey, the author noted that 39% of respondents charge a late payment fee and 61% do not.• Of the 93% of companies that obtain a written acknowledgment from their customers regarding their late payment fee policy, 77% do so in the credit application; 57% use a terms of sale agreement; 62% note it on invoices; and 46% put it on statements.• 33% of companies call it “service charge”; 24% refer to it as “late payment fee”; 15% call it “interest”; and 28% refer to it as “finance charge.”• 14% of respondents believe they have lost customers or business as a result of this policy.• 53% of respondents believe the service fee has helped collection efforts or improved DSO.• 82% allow a grace period after the due date and before they add the service fee.• 41% said they strictly adhere to their service charge policy.

This publication is available in the NACM Oregon library for your review. NACM Oregon is now able to provide D&B small-usage contracts, starting at 15 units. For more information, please contact Kathy Linscott, 971.230.1164 or klinscott@nacmoregon.org. I trust all have taken a look at the new NACM Trade Credit Reports. We are building the database, and it’s growing by leaps and bounds. At the same time, occasionally you get a no hit or limited report from any commercial database. If this should happen to you, please contact Customer Service, and let us see what we can do to locate information for you. Watch for news about new contract pricing for these reports! The new NACM Oregon website will launch mid-November. Please take a look, and we will appreciate your comments. Also, be sure to look under the resources tab. You will note that we are offering the NACM “stickers” for download on the website. These may then be placed on your letters, invoices, statements, or other documents that help you get paid. We appreciate your feedback. Please call me directly at 971.230.1158 or email to rwheeland@nacmoregon.org with comments.

Rod Wheeland, CCE, CAE Direct: 971.230.1158

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Check out the NACM Trade Credit Report Please take the opportunity to check out the NACM Trade Credit Report from the NACM National Database?

This database, composed of contribution from 36 NACM Affiliates across the country, includes more than 7 million current lines of trade credit experience and additional experience up to two years old.

Every member receives 25 free reports as part of their membership package, so we encourage you to take advantage of this great opportunity.

Contact Barbara Salazar at 971.230.1182 or bsalazar@nacmoregon.org to obtain a User ID and Password. If you have an existing User ID and Password for the industry group or collection site, you may use the same login.

For more information on the NACM Trade Credit Report call Kendall Sun at 971.230.1180 or Adam Tenuta at 971.230.1164.

Click here to log in and access an NACM Trade Credit Report.

N A C M O r e g o nBusiness Credit Journal

November 2011

International Cornerby Alice Knight

Last month I arbitrarily grouped “risk” into four general categories. These categories overlap and share certain characteristics but also have some distinct differences. The risk mitigation techniques vary by category and in some cases the most appropriate technique for one category conflicts with another.

The four general categories are:

1. Risk of nonpayment 2. Risk of slow payment 3. Risk of claims and deductions 4. Risk of loss of market share

Last month we considered categories (1) and (2) and their potential mitigation techniques. This month we’ll discuss items (3) and (4).

Risk of Claims or Deductions It is totally frustrating to have a good sale, ship it and book the profit and then find out there is a claim. The claim could result in nonpayment, slow payment, partial payment, or even a claim larger than the gross invoice.

Potential Mitigation Techniques 1. Have a claims procedure and reporting process in place and be sure your customer acknowledges it before the sale. 2. Have good customer contact. Know about any potential claim before the account comes due. Do not find out about the claim when you call about the past due. 3. Have someone able to quickly visit the customer and evaluate the claim first hand. 4. Be sure that your policy is compatible with the expectations of your suppliers. 5. Have a clear policy in place about

Alice Knight is Vice President of Finance & Administration for Paper Products Marketing, Inc. Ms. Knight has more than 45 years' of experience in International Finance and is an active member of ICTF and NACM. She has served as Co-chair, Panel Member and Presenter at Annual Global Conferences, as President of FCIB Forest Products Group, and participated in FCIB Conferences in Mexico, Puerto Rico, Munich, and Brussels.

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accepting partial payment while the claim is being resolved.

Example: Invoice value $50,000 Potential claim (500) Undisputed $49,500

Pro: accept the $49,500. Money in hand is very important. Con: it may be difficult to collect the $500 because it is small. This sets a bad precedent.

There is no right or wrong. Each company must set their own policy.

Risk of Loss of Market Share This risk is a precarious balance between sales and credit. Each company must set clear guidelines so that all departments can work together for a common goal.

Potential Mitigation Techniques1. If the Company is in a growth mode and is willing to take more credit risk to grow market share more higher risk customers and countries might be allowed credit. This could lead to nonpayment and slow payment. 2. If the company has excess or obsolete inventory more generous terms and credit limits might be allowed. This could lead to nonpayment or slow payment and longer DSO. 3. If the normal industry terms in a specific country are open account N60 most customers will lose customers and market share if they insist on L/C’s or D/P’s. A L/C or D/P might be best to mitigate the risk of nonpayment or slow payment but it would increase the risk of loss of market share. 4. Know the norms in your industry in specific countries. Often a customer will tell the sales person

that “everyone gives me open account N180” when the norms are actually N60. Being an active member of an international industry group is the best way to have this information.

Risk comes in many forms and each requires specific mitigation techniques. Risk should be evaluated consistently but valued differently based on specific company goals. What is high risk and unacceptable to one company may be a prudent business decision for another.

By evaluating and providing the various components of risk management can make decisions based on their overall business strategy.

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November 2011

Certifed Group Administrator DesignationsThe Certified Group Administrator (CGA) program was created through a collaboration between NACM National and the Affiliate Council, which is representative of the 35 NACM Affiliates around the country. The purpose of the program is to provide specialized education to credit group administrators. Upon successful completion of the program, students will be awarded the CGA designation.

Shannon AbnalShannon joined NACM Oregon in November 1997 as Data Coordinator. She coordinates the receipt of data submitted by NACM Oregon members. She also works with the members, encouraging them to submit their aging and to submit them electronically. Shannon also provides backup to the group coordinators.

Kristen McBrideKristen has been an Industry Group Coordinator for NACM Oregon since January 2010. She has more than 20 years in the meeting planning industry. Prior to joining NACM Oregon, Kristen worked in Sales and Marketing for Cascade Biologics and and Senior Program Manager at First Contact. She studied Marketing at Orange Coast College in Costa Mesa, California, and at Portland Community College. She earned

her CGA designation in August, 2011.

Joining NACM Oregon In March 2011, Clara is an Account Executive for the Collections department at NACM Oregon. She earned her Marketing Degree in 1990 and Accounting Degree in 2000. Prior to joining NACM Oregon she was an Accountant for Manheim Portland Auto Auction and a Key Business Consultant for D&B. She received the Dale Carneige Certificate in 2009 and the Certified Group

Administrator Certificate (CGA) in August 2011.

Richard BrowningRichard began his career with the association in 2004 as a Customer Service Representative. In October 2010, he moved to the Industry Group Coordinator position. Prior to coming onboard at NACM, Richard worked for Qwest Communications (now CenturyLink) and Fry’s Electronics.

Clara Nemeth

Denise has been with NACM since 1999, starting in the Construction Services department. She moved up through the ranks to her current position as Account Executive. Prior to joining NACM, Denise worked for First Interstate Bank, then with U.S. Bank in the Commercial Loan Department. Denise attended Portland Community College and Mt. Hood Community College majoring in business.

She earned her Credit Technician Certificate from NACM Oregon in 2003 and CGA in 2011.

Denise ReddingKathy Linscott Kathy Linscott is Vice President Sales &

Service for NACM Oregon. She has more than 25 years of experience working in credit at NACM Oregon. Her responsibilities include managing the credit reporting division, industry trade groups, and data contribution services of NACM. She has taught several Good Morning Credit Seminars for the Association. Kathy participates on NACM committees and the

NACM Board of Directors. She earned her CGA designation in August 2011.

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Cheryl Wahlberg, CCEFor nearly 25 years, Cheryl has been an active member of NACM Oregon. She served on numerous NACM Oregon committees; was elected to the Board of Directors in April 2000, serving as Chairman in 2006-2007; served on the NACM Oregon Foundation Board of Directors from 1999 to 2001; served or chaired all committees in the Portland CFDD Chapter; and was elected to the CFDD Board of Directors, serving as

President in 1998. Cheryl earned her CBA in 1990; her CBF in 1991; CCE in 1994; and CGA in 2011. Cheryl recently retired from Food Services of American as credit manager. After a very short break, Cheryl came out of retirement to join NACM Oregon as an industry group secretary.

Caroline AndersonCaroline has worked in the NACM network for more than 10 years. Her background includes a degree in Business Management Information Systems, blended with B2B sales, planning and administering National Industry Credit Group meetings and events. She joined the NACM Oregon team in September 2011 as the National Account Executive. Her primary focus is to create new National Industry Credit Groups and build

on existing groups. Caroline earned NACM’s Certified Group Administrator Certificate in October 2011.

Certifed Group Administrator Designations, continued

and a Big Welcome to the New Kids on the Block!

Testimonial“Your collection department is great. I totally believe in the fact that you are an important step in our collection efforts. I also LOVE pulling a credit report off of my computer instead of wasting the time to make phone calls!”

NACM Oregon member

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Member ProfileImperial Paint Co.

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Pictured l to r: Beki Cairel, A/R & A/P; Greg Swanson, Vice President; and Bill Walker, Credit Manager

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Not many people know paint like the folks at Imperial Paint Company. They’ve been meeting their diverse customers

needs since 1945, when Don Rearden and Clyde Gibson started making paint in the old Fuller Paint factory in northeast Portland. As Greg Swanson, Imperial Paint co-owner and Vice President will tell you, they’ve made coatings in all shades and for every surface imaginable. With the growing popularity of the do-it-yourself homeowners, most people think of “paint” as big box store wall paint. But there’s more to paint than adding tint to a latex base. As Swanson puts it, “We do a little of everything here...there’s not too many things we haven’t run into.” From their line of Pittsburgh latex paint to their comprehensive selection of Valspar auto paint, Imperial Paint can handle the needs of all its customers, from consumer hobbyist to discerning contractor. However, Imperial is better known for their specialty coatings and custom manufacturing. These specialty coatings may be made for industrial manufacturers looking for coatings able to withstand harsh environments or contractors ensuring architect-specified colors match their design.

Imperial Paint—through a staggered ownership history— is one of the few companies whose second-generation owners are not related. Greg Swanson’s father, Fred Swanson, joined the company in the 1960s. A decade later, when Gibson, one of the original owners, was looking to retire and wanted to sell his share in the company, Fred Swanson took advantage and joined Don Rearden as co-owner. When Rearden and Swanson retired the ownership of Imperial Paint passed to their respective sons: Steve Rearden, company president and production manager; and Greg Swanson who oversees sales and administration. Swanson didn’t realize, when he took the offer for summer employment from his dad, that he was making a career decision. In fact, when he graduated from Oregon State with a degree in Zoology he still didn’t think seven summers of selling paint would lead to anything. It wasn’t until he was 25 and thinking about getting

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married that his dad approached him with an offer to work full-time selling paint. Naturally inclined towards the life of a naturalist, picking up the phone and cold-calling leads was a step away from Swanson’s comfort zone. “By nature selling probably wasn’t something I was real comfortable with,” Swanson says. But he was comfortable in the store, and had a intuitive way of customers. For roughly a decade the two generations of Swansons worked together to build the relationships that are so vital to local businesses. Some of Swanson’s first customers in his early days at Imperial are still around, and, like Imperial, on their second generation of owners. Focusing on the needs of their customers is a Rearden/Swanson family tradition. With their a lean staff of experts, folks around Imperial are used to wearing “a few different hats,” says Swanson. In fact, a few feet is all that separates Swanson and Rearden’s desks—buried in paperwork and paint samples respectively. That the two owners would share a small office isn’t surprising in a building built roughly 80 years ago to manufacture paint. There’s not much room for luxury, let alone computers. There are some great practical features, however. The production of raw paint is done on the top floor where paint mills—small to giant drums which liquefy paint ingredient—were built into the floor. The paint then can be fed with the assistance of gravity through the manufacturing process from floor to floor. Imperial Paint’s factory setup isn’t what brings customers to their door, as Swanson points out. Any time a customer visits or calls, they are talking to an expert. Beki Cairel and Bill Walker, who work in the

retail store (and also attend the Industrial Suppliers Industry Group meetings through NACM) have worked in the retail store for decades. “We just don’t have any turnover,” says Swanson. There is also the longevity of the company itself. In an industry where small manufacturers are constantly being bought by large conglomerates it is hard to find a company that can make decisions and produce paint quickly. Instead of the revolving door of corporate voice and email, customers may find themselves talking to Rearden or Swanson within minutes of walking through the doors. Unlike some paint formulas, the recipe for success at Imperial Paint is simple: superior advice, superior service, superior product.

Member Profile, continued from page 6 Check out Experian’s new product...

Premier Profile Report

It is our goal to make sure every member is aware of services offered through your NACM Oregon membership. Whether you are a current Experian user, utilizing another vendor, or not accessing credit reports at this time, please consider reviewing this new product.

Experian has launched a new report called “Premier Profile Report.” This new product offers a quick glimpse design to visually direct your focus to key information saving you time. The dashboard highlights possible indicators of risk reducing potential bad debt. A couple of enhancements are the addi-tion of Fraud & Office of Foreign Assets Control Screening and a credit limit recommendation.

NACM Oregon is offering a complimentary report on one of your customers. Please contact Denise Redding, Account Executive, at 971.230.1178 or Kathy Linscott, VP of Sales and Service, at 971.230.1164 for your report today.

Click here to see sample report.

Thank you for your consideration.

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Experian Business Benchmark Report Experian’s Business Benchmark Report is a quarterly look at how businesses are faring in the United States. Designed to monitor the health of U.S. businesses, the report focuses on key risk indicators such as commercial risk score*, DBT and percentage of delinquent debt. The Q3 report reflects September 2011 data as well as a trending view of the July–September 2011 time period.

Findings from the Q3 report showed:

• All U.S. businesses have demonstrated an increase in slow payment compared with September 2010, with large businesses showing the greatest increase. Businesses with more than 1,000 employees had the greatest percentage increase (28.3 percent) in days beyond terms (DBT). They increased their late payments by more than 1.5 days on average, going from 5.7 DBT in September 2010 to 7.3 DBT in September 2011.

• The smallest businesses (with zero to four employees) have increased their late payments by as much as 20.5 percent, or by more than a full day beyond terms, compared with the previous year. Specifically, businesses with no employees went from 5.6 DBT in September 2010 to 6.7 DBT in September 2011, and businesses with one to four employees went from 7.1 DBT in September 2010 to 8.2 DBT in September 2011.

To download the report, click here.

* Based on a scale of 1 to 100 and predicts the likelihood of severe delinquency (slow 91-plus) within the next 12 months.

National Summary of Domestic Trade Receivables Results 3rd Quarter 2011 We have received the results of the National Summary of Domestic Trade Receivables (DSO) for the third quarter of 2011. The Credit Research Foundations (CRF) has been producing this valuable quarterly report for more than 50 years. DSO slightly increased from the prior quarter to 40.43 from 40.20. A year ago the measure was 40.40. Best Possible DSO increased to 31.90, as compared to 31.60 last quarter and 32.00 a year ago. Average Days Delinquency increased to 5.80 from 5.57, as compared to 5.70 a year ago. The percent reported over 90 days past due decreased to 0.47 as compared to last quarter at 0.70, as compared to 0.70 a year ago. Medians for 29 different industries are included in this summary. If any SIC code has less than three responses, it will not appear in the report. Please contact Customer Service or your Account Executive for a copy. Now that you’ve done the NSDTR, if you really want to see how you’re doing, you’ll want to participate in CRF’s comprehensive Benchmarking survey. You can do that at: http://www.crfonline.org/surveys/benchmarking/benchmarking.asp. Don’t forget about our Compensation survey. To participate: Click here.

© New Yorker Cartoon JWilliam Hamilton from cartoonbank.com. All Rights Reserved.

Enjoy great company, great food, and an unforgettable presentation by

Dr. Rick Brinkman.The CFDD Portland Chapter invite you to join us

December 15, 2011, 5:30 p.m., at the Red Lion Convention Center

1021 NE Grand Ave., 6th Floor Portland, Oregon 97232

Dr. Rick Brinkman is best known for his Conscious Communication® expertise conveyed to millions of people via keynotes and trainings, radio, television, print interviews, and numerous award-winning books, videos, and audio programs. He imparts sophisticated knowledge with a light-hearted touch. Using every day situations, character sketches, and sound effects, he creates a larger than life presentation that fills your people with comic and cosmic “shocks of recognition” and insight. In short, his techniques produce results-oriented action for your organization because the substance of Dr. Rick’s content is embedded by humor into memory

This event will include a small token for each attendee and door prize drawings. We look forward to seeing you there!

For questions or to register, please contact Lori Buckelew, Eagle Foundry Co., at 503.637.3048 or lorib@eaglefoundryco.com.

Watch your mail for more details.

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November 2011

Blount Inc.

Climax Portable Machine Tools

Columbia Distributing

Datalogic Scanning, Inc.

Davis Wright Tremain, LLP

Eugene Water & Electric Board (EWEB)

GloryBee Foods, Inc.

Harsch Investment Corp.

Integra Telecom

Leatherman Tool Group, Inc.

Miller Nash, LLP

Nautilus, Inc.

Northwest Staffing Resources

Pacific Seafood Group

Portland General Electric

SAIF Corporation

TriQuint Semiconductor

Umpqua Bank

VTech Communications, Inc.

West Coast Bank

Healthiest Employers in OregonThe Portland Business Journal created the Healthiest Employers of Oregon award to recognize companies that promote the value of workplace wellness and demonstrate innovation and leadership in their wellness programs.

We are pleased to recognize the following members who made this list for 2011.

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NACM-Oregon FoundationThe NACM-Oregon Foundation grants scholarships to credit professionals for continuing education, professional designations, and conference expenses.

The Foundation manages two scholarship funds: the NACM-Oregon Scholarship Fund and the Phylliss Clark Memorial Fund. The Foundation offers scholarship to the following events:

• All NACM Oregon educational courses

• Portland Community College courses within the Credit Administration and Advanced Credit Administration Programs in preparation for professional designation

• Self-study courses in preparation for professional designation

• Registration and exams fees for the National NACM Professional Designation Program

• NACM/CFDD Pacific Northwest Credit Conference

• National Credit Congress and Exposition

• NACM National schools such as Credit Management Leadership Institute, Mid-Career School, and the Graduate School of Credit and Financial Management

If taking a course or pursuing your certification seems like an expensive proposition, think again. These scholarship funds are a benefit to you as a member, so please take advantage by applying for next year.

To apply—

To apply for scholarship funds, or for more information, contact Lourdes (Lou) Rice, NOF Scholarship Committee Board Director, Pacific Metal Company at 503.454.1051 or lrice@pacificmetal.com

Submit applications to:

Lourdes (Lou) A. Rice NOF Scholarship Committee Board Director Pacific Metal Co. 10700 SW Manhasset Dr. Tualatin, Oregon 97062p: 503.454.1051 f: 503.454.1065 e: lrice@pacificmetal.com

Congratulations!

Congratulations are in order for Barbara Davis, Northwest Pump & Equipment, for her recent CCE recertification designation achievement.

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November 2011

Coming Soon!2012 Education Class Schedule

2011 Business Credit Learning Center WebinarsThe Fast and Efficient Way to Deliver Your Invoices and Receive Payments November 10, 2011, 2 - 3:30 p.m. EST

Section 503(b)(9) November 16, 2011, 2 - 3:30 p.m. EST

100 Ways to Improve the Performance of the Credit Department November 16, 2011, 12 - 1 p.m. PT

When to Turn an Account Over for Collections November 18, 2011, 9 - 10 a.m. (PT)

Customer Service: It’s Everybody’s Business November 29, 2011, 9 - 10 a.m. (PT)

Bankruptcy From the Credit Manager Perspective December 2, 2011, 9 - 10 a.m. (PT)

Exploiting Technology in Collections, Deductions, and Reporting December 14, 2011, 2 - 3:30 p.m. EST

Webinar fee: $79 each - member; $109 each - nonmember

For a complete list of webinars and descriptions, please visit www.businesscreditlearningcenter.com.

If you have any questions on any of the webinars, call Elizabeth Heintz at 971.230.1120, or eheintz@nacmoregon.org.

Schedules are subject to change.

Put This Date On Your Calendar

Annual Meeting April 19, 2012

Join Wanda Borges, Esq., Borges & Associates LLC, for a half-day seminar as she brings you up-to-date on legal issues impacting creditors.

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Credit TechniqueSometimes by Michael C. Dennis

I have already provided some ideas about what collectors should Always keep in mind, and I listed actions that should Never be considered. It seemed only right that there should be a Sometimes list for you to review, so here it is:

• Sometimes, customers will threaten a bankruptcy filing unless the creditors ‘back off’ on their collection efforts. By the time things have gotten this bad, you probably have little to lose by pushing the customer for payment.

• Sometimes, members of your sales department want to help you in your collection efforts. Make certain that salespeople understand their primary role is to let their contacts know that your company considers collection problem to be serious. Make sure they understand they have NO authority to negotiate payment plans on behalf of you or the company.

• Sometimes, you will have a personal guarantee on file. Creditors usually send a written demand to the guarantor when the debtor company defaults. There is no reason you cannot call the guarantor when the debtor company is in serious trouble. I think you may be surprised how often a call to the guarantor generates payment from the debtor company.

• Sometimes, customers claim pricing errors and use these errors to delay payment. Your goal is to deal with these complaints quickly. Reviewing the customer’s purchase order will show whether the customer is right or wrong. If the customer is correct, arrange for the credit to be issued promptly.

• Sometimes customers are irate. It is best to allow them to vent their frustration without interrupting them.

• Sometimes, customers sometimes try to gloss over the fact that they broke a payment commitment. It is up to you to make sure that they are not let off so easily. Before discussing the customer’s next payment commitment, bring the discussion back to why the previous commitment was broken.

• Sometimes, customers try to pick a fight to derail or deflect the collector from their goal of addressing a past-due balance. Don’t allow yourself to be sucked in by this form of manipulation by the debtor.

• Sometimes, customers will offer to settle an outstanding debt for some fraction of the balance due. They are not acting unethically. They are doing what is in their best interest. Make sure you do what is in your company’s best interest. Try to negotiate a better deal than the one offered. If the debtor indicates a willingness to make any concession or consider a counter offer, change your mind set. Consider their entire proposal to be negotiable. Before any negotiations, discuss this with management. Make sure you know your negotiating position and your negotiating authority, if any. Often, the collector is prohibited from making commitments on behalf of the creditor company. In this scenario, your role will primarily involve gathering information and determining if the proposal offered to your company is the same one being presented to every other trade creditor.

© 2008. Michael C. Dennis. All Rights Reserved. Excerpted from: “1001 Collection Tools and Tips.”

Michael Dennis is a business credit consultant, speaker and webinar presenter. He is also the author of “1001 Collection Tools and Tips.” His website is at www.coveringcredit.com.

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Credit Enhancements—Installment 2continued from cover

(A) intended by the debtor and the creditor—to be a contemporaneous exchange for new value given to the debtor; and

(B) in fact a substantially contemporaneous exchange.”

The idea is that if parties intend to, and in fact, do a straight swap of goods for money, the money should not be clawed back as a preference. It is effectively a cash transaction, and avoiding such transfers would provide a powerful disincentive to do business with a distressed company – something contrary to bankruptcy’s policy goals. The only issue to watch is that transfers should be “substantially contemporaneous.” If goods are provided COD, and the payment is not actually made for 60-90 days, the second requirement of a substantially contemporaneous exchange in fact will not be met. It is a somewhat fluid standard as to what constitutes “substantially contemporaneous,” but anything over 30 days from receipt of goods will definitely not qualify.

Thus, if a COD payment is not forthcoming, the best practice is to be as aggressive as possible to get the payment, and to be in a position to make a well-informed judgment call on the appropriateness of a reclamation demand before the 10-day window expires.

Johnny White, practices bankruptcy and commercial litigation. He received his law degree from University College Dublin, where he graduated magna cum laude and has also studied at the University of Paris (Panthéon-Assas), New York University, where he graduated with an LL.M in commercial law, and the Kings’ Inns, Dublin, where he received his Barrister-at-Law degree. Mr. White is a member of the New York, California and Irish bars and, prior to joining Blakeley & Blakeley LLP, was associated with a New York firm that practiced complex commercial litigation.

Reprinted with permission from the August 2011 Blakeley & Blakeley Vendor Flash.

Blakeley & Blakeley LLP, was founded by experienced attorneys with creditor’s rights, bankruptcy, and corporate litigation roots. With our main office in Orange County and satellite offices in New York City, San Francisco, and Los Angeles. We offer national and international experience to clients throughout the United States and Canada. We have long-established a reputation for being prompt, skilled, and resourceful in resolving difficult and complex legal issues that arise in both bankruptcy and commercial litigation proceedings for industries like restaurants, food and beverage, electronics, technology and communications, paper, newspapers and publishing, apparel and textiles, banking and commercial finance, media and entertainment, manufacturing, distribution, healthcare, automotive, real estate, retail, service and construction.

www.bandblaw.com

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Board of Directors NACM Oregon

ChairmanRaeann Binau, CICP, RGCP Airgas - Norpac, Inc. raeann.binau@airgas.com

Vice ChairKimi Shelton-Muller, CCE EKC Consulting, LLCkimimuller@comcast.net

SecretaryJohn Hardy Emerson Hardwood Co.jhardy@emersonhardwood.com

TreasurerMarsha Johnson, CCE TEC Equipment, Inc.mjohnson@tectrucks.com

CounselorSue Hein Rapid Bind, Inc.sue@rapidbind.com

Customer Service/ Credit Reporting971.230.1220 services@nacmoregon.org

Data ContributionShannon Abnal, CGA 971.230.1166 sabnal@nacmoregon.org

Member Services Kathy Linscott, CGA 971.230.1164 klinscott@nacmoregon

Member Services Account Executive Denise Redding, CGA 971.230.1178 dredding@nacmoregon.org

National Account Executive Caroline Anderson, CGA 971.230.1178 canderson@nacmoregon.org

Collection Account ExecutiveClara Nemeth, CGA971.230.1144cnemeth@nacmoregon.org

EducationElizabeth Heintz971.230.1120eheintz@nacmoregon.org

Directors Steve Amiel Electrical Distributing Inc./BASCOstevea@edinw.com

Linda Bishop, CCE, CICP Tektronix, Inc.linda.j.bishop@tek.com

Will Campbell Standard Supply Co.willc@standardsupplyco.com

Tony Ceniga Industrial Finishes & Systemst.ceniga@industrialfinishes.com

Paula Cooley, CBA American Steel pcooley@american-steel.com

Lori Jones, CCE Eoff Electric Supply Co.lori.jones@eoff.com

Pat Swope, CCE, CICP Pacific Seafood Co., Inc.pswope@pacseafood.com

PresidentRod Wheeland, CCE, CAE NACM Oregonrwheeland@nacmoregon.org

Industry GroupsRichard Browning, CGA 971.230.1188 rbrowning@nacmoregon.org

Kristen McBride, CGA 971.230.1176 kmcbride@nacmoregon.org

Collection ServicesBrenda Terreault, JD, CBA971.230.1196bterreault@nacmoregon.org

BillingMarmie Carpenter971.230.1146 mcarpenter@nacmoregon.org

Meeting Room RentalElizabeth Heintz971.230.1120eheintz@nacmoregon.org

Newsletter EditorBarbara Salazar971.230.1182 bsalazar@nacmoregon.org

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