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Builders Liens Across Canada
http://creditedu.org/knowledgecentre/files/Credit Insitute of Canada Webinar April 18 2013 - Builders Liens in Canada.pdf
What is a builders lien?
Learn about the similarities and differences in builders liens acress Canada, including Quebec.
http://www.strategis.gc.caThis is the official Industry Canada website. It provides information and links to a wide range of government services that support Canadian businesses.
Bankruptcy and Insolvency Records
http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/h_br01991.htmlOffice of the Superintendent of Bankruptcy Canada
Unclaimed Funds Database
Purchasers Alliance Index
Canadian National Debt
Export Development Canada - Weekly Commentary
American National Debt vs. Canadian National Debt
Canadian Unemployment Statistics
Canadian Inflation Rate
Bank of Canada Interest Rates
IMF Data Mapper v2.0
Crude Oil Prices
World Crude Oil Prices
Canadian Natural Gas Prices
Housing Prices II
Managing Risk in Uncertain Times
The Role of the Credit Professional in the Commercial Leasing Industry by Lisa Moore CCP
December 15, 2009: civil servants in Ireland rally in reaction to the Irish government's vote in favour of a reduction in public sector compensation by 5-15%. The Republic of Ireland is claimed to be facing the deepest financial crisis of any advanced nation and it isn't over yet.
May 5, 2010: striking protestors in Greece, the undisputed pillar of ancient democratic civilization, jam the streets setting the finance ministry ablaze, killing three.
CCAA proceedings now at your fingertips
Trustees, creditors, academics, policy makers and government officials have a new source of insolvency information available to them thanks to recent changes to the Companies’ Creditors Arrangement Act (CCAA). One result of the changes, which came into effect September 18, 2009, is that the Office of the Superintendent of Bankruptcy (OSB) became responsible for maintaining both a Registry of Public Records and a Repository of CCAA Files.
Registry of Public Records
Once a court grants protection to a debtor company under the CCAA, the monitor (trustee) must send basic information to the OSB within one business day. This information includes the court’s file number and coordinates—including the website address of both the debtor and the monitor.
What are basic concepts of Personal Property Security in Canada?
How can a supplier protect their interest in inventory shipped to a customer from banks and other creditors?
https://creditedu.org/knowledgecentre/index.php/site/video/96Enjoy this complimentary Webinar
BANKRUPTCY FRAUD WARNING SIGNS - A CHECKLIST
Use the following list to identify signs of bankruptcy fraud.
- Failure to keep commonly used business records; incomplete or missing business records
- Unusual depletion of assets shortly before bankruptcy filing
- Assets are concealed
Who Is Committing Fraud in Canada?
A 2009 survey conducted by KPMG called: Profile of a Canadian Fraudster, revealed some interesting demographics on who commits fraud in Canada.
The survey polled senior executives such as CFOs and Vice-Presidents from across Canada and covered a wide range of industries, including Financial Services, Energy and Natural Resources, Consumer Markets, and Industrial Markets. One quarter of respondents had revenues of over CAD$1 billion, with another quarter having less than CAD$100 million in revenues.
Creditors, Suppliers and Security Breaches
Once upon a time, all the suppliers had to worry about what was the credit of their customers and the legal effectiveness of the security liens that they took on inventories. Now, debtors and creditors alike, for that matter, live under the constant threat of security breaches which can have consequences of a material order of magnitude. As a lawyer advising payments companies, I thought it would be interesting to discuss security breaches ...
Black Holes and Heroes
At times, the only force holding an organization together and preventing it from falling into the abyss comes from unsung heroes within its ranks. Read this article by Ron Lutka, CMA to find out more about the unsung heroes. There might even be parallels here to your organization.
Black Holes and Old Invoices
My article titled Black holes and Credit Management published in To Your Credit’s fall 2007 edition began with this paragraph:
“Credit management is an integral and highly visible part of the cash-to-cash business cycle, in which cash invested by shareholders is used to produce and deliver goods and services that are sold for even more cash.
Deception of the Gift and Prepaid Credit Card
What do you do about those not so great gifts, those gifts you didn’t get and really wanted? If you’re lucky you can return the gifts you don’t want and purchase what you really want! Or you may have received gift cards to buy whatever you want but it may not be from a retailer that you shop at.
Gift cards and pre-paid credit cards (credit cards with amounts already on them) have become more and more the option for giving, it’s simple and easy. The popularity of gift cards has created a new portal for fraudsters to deceive you and relieve you of your hard earned money.
ELECTRONIC FUNDS Transfers and Fraud
Electronic Funds Transfers (“EFTs”) are widely accepted as a method for organizations to transfer funds on a timely basis to suppliers, employees and other organizations. However, EFTs can pose an internal control weakness for many organizations. Employees can circumvent the built-in internal controls, if any, and defraud the organization of significant amounts of cash at one time or over a period of time. EFTs typically allow employees to withdraw organizational funds by way of an Online Banking Agreement (“OBA”) in which an employee may ...
Receivable Insurance Tips
It is critical that you understand your obligations under the credit insurance policy you have signed and that you are complying with them.
Collecting from your large customers: Is it 'Collections' or 'Corrections'?
A few years ago I was at a major railroad company for imparting training sessions on the topic of Collection Skills and Receivable Management. On the first day of training a, I realized that the collections staff was made up of people who had a significant number of years of collections experience. The group was an enthusiastic batch; however most of the proven collections techniques were being met with...
Predictive Indicators - Learn how to read the signs and improve your bottom line
Managing your company’s exposure to risk has become a challenging task. There is more pressure to speed up the credit review process and more responsibility resting on your shoulders to be accountable for your decisions and improve company profitability.
Identity Theft - Practical tips for credit professionals
Every year, identity theft results in millions of dollars of reported losses for Canadians. This has serious implications for credit professionals when it comes to the collection, protection, usage and disposal of the information they gather on their customers. Whether your company accepts payment by credit card, by wire transfer, via e-commerce or by the ageless paper-based cheque method, you need to ensure that your department plays its part in having the necessary checks and balances in place.
Some Recent Canadian Developments in Cross-Border Litigation
Here are some recent developments important to anyone engaged in cross-border civil litigation involving common-law Canada. One, the criteria for determining whether a court has jurisdiction over a non-resident defendant have been revised. Two, the concept of "forum of necessity" is now established in Ontario. Three, Canadian courts will not, as readily as in the past, decline to exercise their jurisdiction in cases where a parallel action (one involving the same parties and issues) has already been commenced elsewhere.
Overview of Proposed PIPEDA Amendments
On May 25, 2010, the Minister of Industry tabled amendments to the federal private sector privacy legislation, the Personal Information Protection and Electronic Documents Act (PIPEDA). PIPEDA was introduced in 2001 and has been applicable to many private sector enterprises since 2004.
Court Declines to Approve Sale of Assets as Part of Proposal Proceedings
In the decision of Justice Cumming In the Matter of the Proposal of Hypnotic Clubs Inc. (“Hypnotic” or the “Debtor”) the court dismissed a motion by the Debtor for a sale of its assets pursuant to s.65.13 of the Bankruptcy and Insolvency Act (“BIA”).
Suing a Foreigner? Keep Control of the Case with a Forum Selection Clause
In the world of cross-border litigation, I can tell you that prevention is worth much more than a pound of cure. Battles over where a case is to be litigated are common, and can be so protracted and costly that the parties never reach a determination of the merits of the case. Such battles are common because generally there are tremendous strategic advantages to litigating the case in one’s home jurisdiction, and disadvantages to litigating the case in one's opponent's jurisdiction.
The Interprovincial Enforcement of Judgments
A Creditor and a Debtor enter into a financial agreement in Alberta. After several years, the Debtor moves to Manitoba, leaving behind only sparse assets, (not nearly enough to cover the costs owed) in Alberta. Following a slowdown of repayments, the Creditor decides to take legal action against the Debtor in the Alberta Court of the Queen’s Bench.
CRA Trust Overrides Contractual Right To Set Off
In a recent decision involving the Canada Revenue Agency (CRA), and the Caisse populaire du bon Conseil (Caisse), the Supreme Court of Canada, (SCC) considered whether a lender’s contractual rights in respect of its customer’s term deposit account could be overridden by a deemed statutory trust in favor of the Crown.
The issue was whether the Caisse, by virtue of its contractual arrangement with its customer, Camvrac Enterprises Inc, held an iron clad security interest over the proceeds of its deposit account that could not be overruled.
Supreme Court Rules Crown DoesnĂ˘âŹâ˘t Have Rights To GST And QST
In a unanimous decision on October 30, 2009 relating to the Goods and Services Tax (“GST”) and the Quebec Sales Tax (“QST”), the Supreme Court of Canada rejected the most recent attempt of the Crown to secure its position by recovering the tax portion of accounts receivable outstanding at the time of bankruptcy where the bankrupt had not made the required remittances.
Factoring Agreement: Security or Sale of Assets?
Lenders and other members of the factoring community should be aware of the potential impact of a recent ruling on a priority fight over the accounts receivable of a bankrupt company. One of the issues that the court had to consider was the application of a factoring agreement.
Demand Promissory Notes and the (New) Ontario Limitations Act
Hare v. Hare (218 O.A.C. 164), a December 2006 decision of the Ontario Court of Appeal, has important ramifications for the use of demand promissory notes in tax planning. Legal and tax planners should be aware that standard drafting language used in promissory notes may bring about unintended consequences.
Debt Collection Rules
If you deal with consumers, you should be mindful of the debt collection laws in force in the jurisdictions where your customers are located. Adapted from the...
Info from Visa
What is expected of a credit manager when a customer claims that he was a victim of identity theft, and the debt is not his?
PPSA & Legislative Q's
Links to Debt Collection Laws and Statutes
Sample Credit Application
Sample Credit Application.pdf
Whitepaper: Essentials for Strategically Managing Credit in Any Economic Environment
A Best Practice (with new ideas) You Can Apply Now
Financial Ratios and Related Tools
A ratio by itself is an incomplete figure that could be misleading if analyzed in isolation. To perform an analysis, inter-related ratios should be examined and calculated over a period of time to see the trends, and then compared to ratios of industry or peers.
International Financial Reporting Standards
Effective January 1, 2011, IFRS will replace current Canadian GAAP accounting standards for Canadian publicly accountable enterprises (PAE) and Government Business Enterprises. As of this date as well, private companies have the option of adopting IFRS or the new Canadian standards developed specifically to meet their users' needs which are referred to as the Accounting Standards for Private Enterprises.
Return on Equity Financial Expression
Efficient use of assets is important for the profitability and growth of any organization. One of the easiest ways to gauge whether a company is an asset creator or cash user is to look at the return on equity (ROE) ratio. ROE is a strong measure of how well management is creating value for shareholders.
All About Choice
Experience has told us that when the economy turns bad, it’s time to expect more accounting shenanigans from public companies. This can happen in three ways.
Sometimes, a company has been using aggressive accounting for years, and a dismal economic picture makes it difficult to hide the old chicanery any further. Other times, a firm decides to use accounting tricks to mitigate the impact of poor operating results.
Cash Flow Myths
It's just too easy to mislead the average investor in Canada. Financial reports can be arcane and confusing even for professionals. Adding to the problem are regulators who don't care to clean up pervasive scams, much less make financial statements more usable for investors.
Common Forms of Financial Statement Fraud
In the summer edition of To Your Credit, we published an article on the work of Professor Messod D. Beneish from the Kelley School of Business, Indiana University on the subject of earnings manipulation. In the sample of 74 companies that Pr. Beneish looked into for his research, he concluded that the typical manipulators “overstated earnings by recording fictitious, unearned, or uncertain revenues, recording fictitious inventory, or improperly capitalizing costs.”
Fraudulent Financial Information
Often, the depth and breadth of a credit analysis is based on the risk associated with a potential or existing customer. For example, when the risk is considered low, a simple trade reference check might suffice whereas in cases where the stakes are high, many seasoned and trained credit managers will resort to financial statement analysis. Aside from the challenge of getting your customers to furnish financial statements, determining the reliability of such documents can prove to be quite tricky.
Financial statement simple analysis
In today's environment the obtaining of Financial Statements from a customer is becoming virtually impossible. A good credit professional needs to sell his customer on the benefits of supplying at least a common size balance sheet and income statement in order to justify a credit limit sufficient to meet both yours and the customer's needs.
Role of the Credit and Collections Department in Business
Companies expect their credit department to be sales oriented. Put simply, this means the credit department should be looking for reasons to justify establishing open account terms and/or releasing orders pending, rather than looking for excuses to hold orders or to reject applicants for open account terms. Having this simple idea in mind can make
Webster’s dictionary defines ethics as: “ A set of moral principles or values”, and ethical as: “ Conforming to professional standards of conduct.” To help guide ethical behaviour in the credit department, it’s important to start with a written credit policy.
Role of the Office of the Superintendent of Bankruptcy (OSB)
The Office of the Superintendent of Bankruptcy (OSB) is part of Industry Canada. Their role is to ensure public confidence in the market place by protecting the integrity of the bankruptcy and insolvency system.
CREDITâS UNTOUCHABLE CODE
There is one principle of credit management which is inviolable. In fact it’s as close to being sacrosanct as Canada’s right of sovereignty over the Northwest Passage. To break with this code would be to dismantle the basic principles of credit management and the outcome would be similar to the situation which I am certain that we have all experienced in the past, when the little boy visits the grocery store with his mother and is transfixed by the beautifully structured pyramid of apples.
BIA compared to the CCAA
The Companies' Creditors Arrangement Act (CCAA) is a federal law allowing insolvent corporations that owe their creditors in excess of $5 million to restructure their business and financial affairs. Under the CCAA, corporations ask the Court for protection while they prepare ...
Search Sites for Bankruptcies in Canada and the US
In Canada, you can check on the Superintendent of Bankruptcy search site, or in the US, by looking for a filing on PACER, (Public Access Court Electronic Records.) You will have to establish an account on PACER, but the fees are ...
Free Fraud Detection Resources
One of the simplest ways to detect potential fraud is to confirm certain information provided on a credit application using easy, free resources on the Internet. As a commercial collection agency, we regularly get claims where this has not been done and we discover that the information provided was either misleading or outright fraud. In either case, it is...
https://creditedu.org/knowledgecentre/index.php/site/page/72Businesses may engage collection agencies to assist them in the collection of debts from both consumers and businesses. In Canada, agencies must be licensed in a province to operate there. The provincial governments have developed regulations that govern the activities of these agencies.
The Ultimate Skip List
Valerie McGilvrey is a US Professional Skip Tracer who has agreed to share this list with the members of the Credit Institute of Canada. Much of the information is US related, but can be adapted for Canada.
PIPEDA and Collections
Often, collection activity requires interacting with personal information about a consumer, in order to research, contact or collect from that consumer. Whether you are in an internal receivables department, third party collection agency, or you are a legal agent...
The 4C's of Credit for Business
Credit people look carefully at trade accounts, especially in tough financial times, before they ship goods. What credit managers look for can be...
Credit application Terms
Here is a list of items that are commonly included in B2B credit applications.
Differences in Risk based on Type of Business
In Canada there are three general forms of business ownership: a sole proprietorship, a partnership, and a corporation.
Understanding Accounts Receivable Metrics: DSO, CPI, CEI
Finance professionals calculate DSO by dividing Total Accounts Receivable (A/R) by Total Credit Sales multiplied by the number of days in the measurement period.
For companies using Collection Productivity Index (CPI), it is the amount of cash collected per collector as a % of the opening A/R for each fiscal quarter. As quarterly sales are not linear month to month, (heavily weighted in a particular month) you will find this to be...
Foreign trade differs from domestic trade with respect to the instruments and documents employed. Most domestic sales involve an open-account credit where the customer is billed and has so many days to pay. In international trade, the seller is seldom able to obtain as accurate or as thorough credit information on the potential buyer as with a domestic sale.
Advanced Telephone Collections
Credit policy ideally should be updated quarterly, but at a minimum annually. It needs to be signed off by Senior Managers/Directors to make it enforceable and taken seriously by internal staff.
What is a Proposal?
Under the Bankruptcy and Insolvency Act, a Trustee or an Administrator of Proposals files a Proposal or an arrangement between you and your creditors to have you pay off only a portion of your debts, extend the time you have to pay off the debt, or provide some combination of both.
What to do when a customer files for Bankruptcy
Find out exactly what the situation is. Most people when they think of bankruptcy only think of the final stage, where the customer is no longer in business. In reality there are a few different types and various levels of severity.
Cross Border and International Collections
https://creditedu.org/knowledgecentre/index.php/site/page/86You've serviced your client, you've invoiced the job, and you've not been paid. What can you do?
Calculation of the Collection Effectiveness Indexâs
https://creditedu.org/knowledgecentre/index.php/site/page/87Days sales outstanding - measures the time it takes a company to collect account receivables from credit sales. It provides a good understanding of the effectiveness of the account receivable collection policies and staff in charge of executing on those policies.
- current Ratio
- Acid Test
Debit - Equity Ratios
- Current Debt to Tangible Net Worth
- Total Debt to Tangible Net Worth
- Working Capital
- Net Worth
Credit Rules (Axioms)
If short-term credit suppliers are paid by asset conversions, then the primary interest should be centered on the balance sheet and their focus of attention should be liquidity.
PPSA Registrations - Is this the Weakness in Your Armour?
As the saying goes, an ounce of prevention is worth a pound of cure. This expression is particularly apt when it comes to secured creditors and their registrations under the Ontario Personal Property Security Act (the "PPSA"). Although "getting it right the first time" has always been the mantra of secured creditors, the economic roller coaster ride of recent months has heightened the need to ensure a properly perfected secured claim.
Credit and Collections as a Revenue Generator
https://creditedu.org/knowledgecentre/index.php/site/page/93Next time you are spending quality time with a client, at a board meeting, or getting an update from the CFO you may want to inquire about practices of their companyâs credit and collections department. The credit and collections department is constantly interacting with the company's customer base. This provides them with opportunities to augment sales, identify customer needs and problems, and / or be proactive in collecting those slow paying accounts. A properly operated credit and collections department can enhance profits and earnings per share.
Can creditors recover goods under the 30-day rule in a bankruptcy?
https://creditedu.org/knowledgecentre/index.php/site/video/97Enjoy this complimentary Video Break
What are the 6 key steps in firming up a collection call?
Why you should consider selling to risky accounts
If a customer must pay back a debt over time, what are the 6 critical elements in negotiating payment plan?
What are the 4 C's of Credit Granting?
Character - the desire to pay when debts are due, Capacity - the financial ability to pay debts when due, Capital - the logn-term financial strength to pay, Conditions - factors that affect the debtor, over which they have little or no control
What are the stages in an effective collection program?
What is the Companies' Creditor Agreement Act (CCAA)?
Why are monitoring and control procedures critical to reduce bad debts and overdue accounts?
Information on US Small Claims Courts
Small Claims Court - Alberta
http://www.albertacourts.ab.ca/provincialcourt/civilsmallclaimscourt/tabid/96/default.aspxProvincial government website for Alberta's small claims court
Small Claims Court - British Columbia
http://www.ag.gov.bc.ca/courts/small_claims/info/pilot.htmProvincial government website for BC's small claims court
Small Claims Court - Manitoba
http://www.gov.mb.ca/justice/court/index.htmlProvincial website for Manitoba's small claims court
Small Claims Court - New Brunswick
http://smallclaimscourtofnewbrunswick.blogspot.ca/Provincial small claims court website for New Brunswick
Small Claims Court - Newfoundland and Labrador
Small Claims Court - Nova Scotia
Based on established legal principles and natural justice, the Small Claims Court of Nova Scotia provides a timely, less formal and reasonably cost-effective forum for the resolution of certain types of claim, to a maximum of $25,000 (not including interest and legal costs).
In addition, the Small Claims Court functions as the initial forum for appeals from decisions of Residential Tenancy Officers affecting both tenants and landlords.
Finally, the Small Claims Court functions (without monetary limit) as the initial forum in which disputes between lawyers and their clients regarding fees and other financial issues are heard and resolved.
Small Claims Court - Ontario
Small Claims Court - Quebec
Small Claims Court - Saskatchewan
http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/h_ca02149.htmlCollection agencies work on behalf of companies to collect the debts owed to the company. They are regulated provincially and operate under strict guidelines in every province. Here is the link to the Federal government site that contains information about collection agency legislation in every province.
Risk assessment is a step in a risk management procedure. Risk assessment is the determination of quantitative or qualitative value of risk related to a concrete situation and a recognized threat (also called hazard). Quantitative risk assessment requires calculations of two components of risk (R):, the magnitude of the potential loss (L), and the probability (p) that the loss will occur.
Web sites of companies that provide credit reports for Canadian companies.
Most credit scoring systems have been developed for use by banks. This has been adjusted to reflect both consumer and mercantile business. Credit scoring is a method of evaluating the credit risk of customers ...
Credit and Collections Department Should Be Generating Revenue
Next time you are spending quality time with a client, at a board meeting, or getting an update from the CFO you may want to inquire about practices of their company's credit and collections department. The credit and collections department is constantly interacting with the company's customer base. This provides them with opportunities to augment sales, identify customer...
Credit Risk Management
Credit risk is defined as the likelihood of loss resulting from a customer's failure to pay for the goods delivered. It is the responsibility a Credit Manager to verify that all customer files are complete and contain all the necessary information to protect the accounts receivable.
Collection and Dispute Management
The objectives of the Collection team are to:
- Facilitate a seamless processing of Sales orders within a specific risk guideline defined by the Credit and Collection department
- Liaise with the Sales department and the credit department to anticipate any future discrepancy between the Sales plan and the maximum risk exposure
The Personal Property Security Act ("PPSA") is the name given to each of the statutes passed by all common law provinces, as well as the territories, of Canada. They regulate the creation and registration of...
Letters of Credit
A letter of credit is a document that a financial institution or similar party issues to a seller of goods or services which provides that the issuer will pay the seller for goods or services the seller delivers to a third-party buyer. The seller then seeks reimbursement from...
Hypothec Definition: - Is a charge on property upon which an unpaid creditor may enforce payment of the debt. It is the right of a creditor to take a...
Go to any large auto dealer and there are hundreds of cars on the lot. You may wonder how much the dealer had to spend to provide you with almost limitless choices. What you don't realize is that, like most new car dealers, a floor plan was used to the cars. Simply, it is a way for...
We've listed some of the warning signs of fraud below. The most important is the country of origin.
- Orders originating from or containing shipping or billing addresses in some countries, particularly Romania, Macedonia, and Belarus, have an extremely high incidence of fraud.
Construction credit is a unique and specialized form of mercantile credit. Although the field follows many of the same principles, practices and procedures as mercantile credit, there are a number of factors that make the practice unique. In order to be successful, the credit professional must...
Leasing and Rentals
Merchantile Credit Managers are well trained to deal with how to manage the credit and collections of the transactions of selling of a product or services from one business to another. However, the Leasing or Rentaling of a facility or a piece of equipment deserves special consideration.
Terms used by CPA's
A CPA will competently assist an organization (whether it is a privately held business, a publicly owned corporation, or a nonprofit organization) with preparing reports on its financial performance. Such reports help owners and managers make operational decisions, enable creditors to evaluate loan applications, and provide individuals with information to make investment decisions.
Template: Credit Policy and Processes Manual
A frame work and draft credit policy that can be used in its entirety or in parts by any company looking to set up a policy procedure manual.
Larryâs Recipe for Success â Top 30 Ingredients
https://creditedu.org/knowledgecentre/index.php/site/page/134Larry Pollock, the past president of the Canadian Western Bank offered these tips for success in his recent address to the delegates at the 2013 national credit conference in Jasper. Larry should know. He is Canadaâs longest serving bank CEO, having led the Canadian Western Bank from 1990 to 2013.
The Quickening of Innovation in Asset Based Financing
Some would call it evolution: others, revolution. Semantic flourishes aside, financial technologies are increasingly in the foreground as drivers of product differentiation and proliferation in the asset-based financing industry.
Acceleration Clauses in the Event of Default â Are they enforceable?
All leases have an acceleration clause when there is a default, however there is not a consistent approach as to what the damages will be. Some leases require the defaulted lessee to pay the balance of payments due without discount while others utilize a net present value formula applying a discount rate close to, but generally below, the interest rate implied in the lease. A few still use “the rule of 78’s” (but few under 50 know what that means). The recent case, Hav-A-Kar Leasing Ltd. v. Vekselshtein 2012 ONCA 826 (“Hav-A-Kar”) discussed this matter but may have not quite got it right.
Introduction to Corporate Governance
Why is governance important from a credit risk perspective? Jeremy Brisset, corporate lawyer at Osler, Hoskin & Harcourt will tell you at our next Live Webinar. This webinar will be of value to members of the credit sector, particularly those in commercial credit industry.
My Customer is Restructuring, in Receivership or Bankrupt â What Now?
https://creditedu.org/knowledgecentre/index.php/site/video/142Presented by Jerry Henechowicz, CA-CAIRP, Trustee in Bankruptcy Jerry HenechowiczThis one hour webinar with one of Canadaâs leading restructuring and insolvency firms to get updates on the best practices and latest trends in maximizing recoveries when a customer is restructuring, in receivership or bankrupt.
Sharpen Your Financial Analysis Skills
https://creditedu.org/knowledgecentre/index.php/site/video/143Presented by George Brown, MBA, CMA, CCP, CIA
Lifting or Piercing The Corporate Veil
https://creditedu.org/knowledgecentre/index.php/site/video/144If you always thought that incorporation generally protects shareholders and directors from personal liability when things go wrong, then this webinar is for you. Our webinar leader is Andrew Hladyshevsky, QC, LLB and a partner with the law firm, Fraser Milner Casgrain
Advanced Telephone Collections
https://creditedu.org/knowledgecentre/index.php/site/video/147Presenter: Derek Cherewick, Vice President, Commercial Credit Adjusters Ltd.
Alternative Dispute Resolution In Credit and Collections
https://creditedu.org/knowledgecentre/index.php/site/video/148Presenter: Stephen Morrison, Partner, Cassels Brock, LLP
https://creditedu.org/knowledgecentre/index.php/site/video/152Formulas for Success in Credit Granting & Collection Presenter: Rodger Noel, ACI, Credifax Atlantic
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Target Take Two
http://www.creditedu.org/files/pdf/webinarsTarget_Canada_Keynote_Russell_Bennett_13Oct15.pdfBack by popular demand, Russell Bennett will revisit the bankruptcy of Target and the fall out for its creditors. In May, when we first held this Live-Webinar, it generated a lot of interest from our members â follow up questions continue to come in to the National office.
How to Position Yourself for Promotion
Betting The Company: BOMBARDIER Goes All-In on C Series Jets and Blows Up Its Balance Sheet
https://creditedu.org/knowledgecentre/index.php/site/video/170A brief analysis of Bombardier's woes and what we can learn from a company undertaking a massive project, consuming working capital, and ultimately destroying its balance sheet.
Insights for the Target Debtor Community
https://creditedu.org/knowledgecentre/index.php/site/tool/172Our webinar on the Target Bankruptcy would be of great interest to companies who felt the financial pinch from Targets shutdown in Canada. Webinar participants found it very insightful.
Builders lien across Canada
https://creditedu.org/knowledgecentre/index.php/site/video/173Please mark this webinar in your to-do-list for what will surely be a very informative session from a noted authority on construction liens.
Navigating The Small Claims Court
Webinar Highlights: 1) Overview of the small claims court - Who, when, and how to make your claims; 2) Methods of enforcing a judgment; 3) Special Topics: Consolidation orders, Bulk Sales Act
Where Is Your Credit Risk Hiding
https://creditedu.org/knowledgecentre/index.php/site/video/176In this session Tim Vine, AVP, D&B Canada will discuss the role the credit manager can play in EVERY stage of business interaction with customers â from prospecting to monitoring and reacting.
Excel Essentials for Credit Professionals - Part 1
https://creditedu.org/knowledgecentre/index.php/site/video/177If youâre looking for ways to increase your productivity and get more things done in a work day, this webinar on Excel ESSENTIALS is for you! During the 1 Â˝ hour session, attendees will learn about spreadsheet basics through live step-by-step demonstration and using simple exercises that credit professionals can relate to.
Excel Essentials for Credit Professionals - Part 2
https://creditedu.org/knowledgecentre/index.php/site/video/178Each topic in our Excel Essentials for Credit Professionals Series is designed to help you solve a range of problems utilizing a class of functions and/or tools that are often overlooked. In this one-hour webinar our returning guest speaker, Nick Kenyeres, will cover Excelâs lookup functions (vlookup & hlookup) and conditional formatting. Stay ahead of the curve by joining us to learn how you can benefit by adding one more Excel essential skill to your personal arsenal.
US Construction Laws (US Bonds and Mechanics Liens)
https://creditedu.org/knowledgecentre/index.php/site/video/179This seminar will be of interest to credit managers, sales managers and anyone else with interests in selling to the US or planning to sell to the US construction industry.
If A Customer Must Pay Back A Debt Over Time, What Are The 6 Critical Elements In Negotiating Payment Plan?
https://creditedu.org/knowledgecentre/index.php/site/tool/183Please enjoy this complimentary video from our Best Practices Series
If A Customer Must Pay Back A Debt Over Time, What Are The 6 Critical Elements In Negotiating Payment Plan?
https://creditedu.org/knowledgecentre/index.php/site/page/184Please enjoy this complimentary video from our Best Practices Series.
The Automotive Industry
https://creditedu.org/knowledgecentre/index.php/site/video/185Discussion topics will include: Key financial metrics for auto dealers, Inventory turnover and inventory cost vs. floorplan debt values, Gross profit and Absorption ratios, Debt-to-tangible net worth and debt service coverage, Dealing with the credit arm of banks to finance growth, Covenant requirements and what happens if covenants are in breach, and Common tax-planning items and the misconceptions this can have with credit institutes.
The Automotive Industry
0Discussion topics will include: Key financial metrics for auto dealers, Inventory turnover and inventory cost vs. floorplan debt values, Gross profit and Absorption ratios, Debt-to-tangible net worth and debt service coverage, Dealing with the credit arm of banks to finance growth, Covenant requirements and what happens if covenants are in breach, and Common tax-planning items and the misconceptions this can have with credit institutes.
Lien Provisions of the Ontario Construction Lien Act
https://creditedu.org/knowledgecentre/index.php/site/video/189Presenter: Pallett Valo LLP
https://creditedu.org/knowledgecentre/index.php/site/video/191There are a few reasons a debtor might say theyâll see you in court, and none are in your favour. More importantly, you donât need to go to the stress, lost time and expense of suing an individual or business over a debt.
Become A Cost Saving Hero For Your Organization
It's Time to Talk Money: What Credit Professionals need to know about financial hiring and getting hired today
https://creditedu.org/knowledgecentre/index.php/site/video/194Discussion topics will include: Trends driving financial hiring, In-demand positions and skills for credit professionals, How employers can attract and retain top performers, Tips for navigating todayâs job market, What matters to millennials
International Debt Recovery, Legal Obstacles & Strategies
https://creditedu.org/knowledgecentre/index.php/site/video/187INTERNATIONAL DEBT RECOVERY, LEGAL OBSTACLES & STRATEGIES
How a commercial lender will evaluate your creditworthiness for a loan
When you apply for a commercial loan, lenders assess your credit risk based on a number of factors known as the “5 C’s of Credit.” Understanding these factors will help you build your personal and company credit standing while ensuring your ability to obtain credit when your business needs it most.
Here is a breakdown to help you better understand these factors and what all lenders look for:
A Digital Approach To Receivables Management
This presentation will discuss: Receivables Management: Pre-delinquency, Collections, Pre-Legal/Recovery and Legal Enforcement; Utilizing highly automated platforms with integrated and configurable work flows; Outcome-based strategies for various types of debt, customers and agencies; Enhanced communications and document management; Receivables Analytics - what information you can get and what you can do with it.
Contract Law & Collections
This live webinar will give credit managers a brief overview of liens and how to achieve successful results. This presentation will cover: • How to be successful in your collection • How to avoid disputes and unnecessary costs • How to recognize the importance of solid contracts and record keeping
Retail Insolvency in Canada
This presentation will discuss: • What led to the insolvency of Target, Sears and Toys R Us • How online competition impacted the fortunes of these retailers • The “red flags” that credit managers should be aware of
An Accounts Receivable Integration Framework
https://creditedu.org/knowledgecentre/index.php/site/video/201This webinar discusses how to build a strategy and action plan for A/R transformation. You will learn how PrimeSource centralized credit & collections for more than 40,000 customers across 35 locations.
Five Most Common Business Credit Mistakes
https://creditedu.org/knowledgecentre/index.php/site/video/202How often has your accounts receivable department attempted to collect a payment, only to discover that a client has gone bankrupt, or cannot be compelled to pay an invoice? Each unpaid account is significant revenue lost. But there are ways to minimize this loss.
From Innovating to Driving Impact
https://creditedu.org/knowledgecentre/index.php/site/video/203How Credit Professionals can successfully lead change in their organization. This webinar shows how credit professionals can impact their organizationâs performance through the adoption of digital technology tools.
Trade Credit Insurance
Why Do Companies Buy Credit Risk Insurance? In this webinar you will learn how Credit Insurance: Mitigates Risk, Facilitates attractive bank financing, Offers Credit Enhancement, and Increase Sales.
The warning signs that preceded Carillion's fall
Not since the financial crisis has the collapse of a business had such a political impact, but the warning signs had been flashing at Carillion for all to see, says Jane Fuller.
How Creditors Can Stay Informed
Knowledge Is Power: As a creditor, you need to learn quickly and easily about public legal notices. NoticeConnect brings that information to your fingertips! They are a web platform for publishing and accessing legal notices and has been operating since 2014. The platform is trusted by lawyers, trustees, banks, and government.
Already pinched, many Canadians anxious about higher rates
Direct payments and construction insolvency
https://www.lexology.com/library/detail.aspx?g=3e346c6a-70d9-4608-8309-7bd85469f6ddMain contractor Carillionâs entry into liquidation has resulted in many employers seeking to establish relationships with subcontractors, under which they will be paid directly in order to stay on site and finish the relevant project. On the face of it, this seems like an attractive solution, and may leave some employers wondering why they didnât procure their projects by construction management in the first place. However, establishing direct relations is not without risks, and requires safeguards for employers and subcontractors alike. Those are set out in the last section of this article, but it is important to understand the pitfalls, particularly of direct payment, first.
Is Client Service at Risk of Being Displaced by Technology?
Nowadays, money transfer services have taken on an entirely new complexion in the financial markets. For starters, traditional banks and the international money transfer services they offer to clients are no longer cost-effective, or efficient. In the United Kingdom, there are several ranking money transfer services used by clients, including World First and Transferwise. Contrary to popular belief, FinTech does not eliminate the face-to-face communication or human-voiced support of traditional international currency transfer services; it enhances the efficiency of the services to ensure a seamless experience for clients.
BMC's 3Q Net Doubles; Lumber Price Hikes Help Sales Grow 7.3%
https://creditedu.org/knowledgecentre/index.php/site/page/222BMC Stock Holdings, corporate parent of the nation's second-biggest full-service lumberyard, reported today its net income doubled to $18.4 million in the third-quarter from a year-earlier $9.2 million on a 7.3% increase in net sales to $881 million.Operating income actually dipped 1.2% to $33.3 million. The big change in net income stemmed largely from the fact that the company incurred a $12.5 million loss last year on extinguishment of debt but didn't report any such action this year.
Cedar Creek Deal, Other Costs Push BlueLinx Into the Red
Fresh off of its acquisition of Cedar Creek, BlueLinx reported today a first-quarter net loss of $13.4 million, swinging from a $600,000 profit in the year-earlier period. Sales rose 2.1% to $437.5 million. Gross profit totaled $55.3 million, a 1.6% gain, the Atlanta-based distributor said. Gross margin was essentially unchanged at 12.6% of revenues.
Dorel take US$12.5 million Q1 impairment charge due to Toy âRâ Us liquidation
https://creditedu.org/knowledgecentre/index.php/site/page/224In addition, the company says its profitability was hurt by a shift from its stores to online purchases in Chile, production challenges at a Chinese factory, high raw material prices, restructuring costs at its sports division and investments in technology in home furnishings.
Remington Outdoor Company Plan of Reorganization Confirmed by the Court
https://creditedu.org/knowledgecentre/index.php/site/page/225MADISON, N.C.--(BUSINESS WIRE)--Remington Outdoor Company (âRemingtonâ or âthe Companyâ), one of the worldâs leading designers and manufacturers of firearms, ammunition, and related products, today announced the United States Bankruptcy Court for the District of Delaware confirmed the Companyâs Plan of Reorganization (âthe Planâ). Remington expects to emerge from bankruptcy before the end of May.
These Best Credit Practices in Brazil Will Keep You from Falling Downhill
https://creditedu.org/knowledgecentre/index.php/site/page/226Iâm often asked by many overseas creditors about where to start when establishing a business relationship with a customer in Brazil. My answer is that it often depends on whether you are going to grant credit, and if so, how much.
PetSmart taps advisers to trim $8 billion debt pile: sources
https://www.reuters.com/article/us-petsmart-debtrestructuring/petsmart-taps-advisers-to-trim-8-billion-debt-pile-sources-idUSKCN1J21YD(Reuters) - PetSmart Inc, the largest U.S. pet retailer, has hired restructuring advisers to explore ways to trim its debt pile of more than $8 billion as it continues to face falling profits, according to people familiar with the matter.
Do You Have a Credit Policy for Your Organization?
If your business lets your customers receive goods or services now in return for a promise to pay later, then your business grants credit. And you are not alone. Most businesses grant a credit to their customers, especially if their customers are other businesses (B2B—business-to-business). In fact, this is the most common type of credit offered in the business world and most of the credit offered in this way is unsecured.
Whatâs the Link Between Communication and Credit Management?
Ultimately, having a credit policy only works if people know about it; what it covers and what the rules are. Put another way, why have a policy if staff members don’t know what is, or what it means? After all, it’s not a secret. So, the next step after you get a credit policy in place is to let your organization’s team know about it. This is the role of the credit team. They should meet with owners and/or a senior manager, to get the buy-in and sign-off, if that has not happened already. Once this is done, the next step is to...
What does a digital transformation mean for finance teams
Finance departments are undergoing a digital transformation; new technologies like robotic process automation (RPA) and artificial intelligence (AI) are becoming increasingly important tools. In order to keep pace with customer expectations, millennials in the workforce, and ambitious growth targets, leaders are embracing these technologies in order to stay competitive and relevant. Digital transformation is no longer a second thought for many companies – it is now at the forefront of their business strategy.
Detecting financial statement manipulation
what you will learn:
- Understand the importance of financial statements and accounting rules
- Establish a definition of what may be considered to be financial statement manipulation
- Learn various ways the accounting rules are (and have been) subject to manipulation in order to adjust the figures presented on a company’s financial statements
- Introduce some of the tools that can be used to detect potential manipulation of the financial statements
Risk, Volatility and Your Business
How to Better Know Your Customers
As a credit manager, a critical part of your role is to identify who you can trust and to what extent you find their claims realistic. This is translated into knowing your customers well and defining whether they can pay you as agreed. Naturally, you may not have much information for new clients. The amount of credit awarded requires careful consideration when managing new and existing customers. Luckily, there is a method for evaluating how creditworthy they can be.
Legal insights on minimizing exposure to bad debt and maximizing recovery efforts
In this webinar you will learn: What information should you gather from new customers?, The importance of documenting, How can you identify opportunities for recovery?, and What remedies might the law offer?
Waiting too long to collect
My colleagues think that my role is the worst possible in the company. This is mostly because my job involves calling customers for money. But I have a secret for you: I like making those calls. Rest assured, I’m not an extortionist who likes to torment poor souls. I just love what I do, especially knowing that I contribute to my organization’s success.
Do Not Miss the Warning Signs of Insolvency!
Q and A (13)
How many collection calls should one make before referring a file to a collection agency?
The best way to determine this is by establishing a process whereby a collector goes through a series of steps in which h/she establishes the ability and willingness of a debtor to pay the overdue bills. It’s quite possible to make a decision to escalate a file to a collection agency right after the very first call. On the other hand, if there are reasons to believe that a cooperative debtor is experiencing temporary cash flow difficulties, then it may take repeated calls to work out a solution over time.
What is the best course of action to follow when dealing with accounts payable staff does not result in payment of an overdue account?
Dealing with A/P staff is part of the initial stage of collecting on a delinquent account. Rightly, they deserve every due respect. However, if a solution is not forthcoming, then one should resort to the principle of escalation. This entails finding out who the A/P personnel answers to and whether that person (general manager, controller, director of finance, accountant, etc…) has the genuine decision making power or the authority to provide information as to the company’s ability to pay.
What can creditors do to protect themselves when a customer remits a cheque, for less than the full amount owing, and marks it "Paid in Full" or words to that effect? Also, what can a creditor do to protect themselves in this situation when their company uses a "lock box" or "shared service" center and the A/R personnel may not even see the cheque prior to it being negotiated? Is the law that governs these scenarios Federal or Provincial?
Courts are very familiar with this tactic and will generally not give effect to it. A cheque marked “paid in full” may very well be evidence of an agreement to reduce the debt owing, but it is easily rebuttable by clear evidence that the creditor accepted the payment only as partial payment. This is based at least partially on the concept of consideration. Put simply, this concept involves the idea that you do not get something for nothing. What the debtor is attempting to do in this situation is to receive a discount on its debt without providing any real benefit to the creditor in return. The courts will not allow a debtor to unilaterally alter its agreement with its creditor - which is what it is attempting to do with the notation on the cheque.
One possible method of dealing with such attempts would be regularly forwarding statements thanking the debtors for any payments received and indicating the account balance to date. If the debtor then challenges the statement arguing that payment had been made in full by way of the cheque in question, all the creditor would have to do would be to respond by saying it was received in partial payment. Unless the debtor is able to produce some sort of an agreement with the creditor showing the creditor’s agreement to accept the reduced amount in full satisfaction for the amount owing, it is extremely unlikely that the courts find in favour of the debtor.
Of course, if the creditor notices the notation before it deposits the cheque, it can also send a specific letter to the debtor thanking it for the payment and saying that the payment has been applied against the amount owing, that the creditor did not agree to accept the payment in full satisfaction of the amount owing and that the balance remains owing by the debtor.
The law governing these scenarios is the common law of contract, which is a matter within the jurisdiction of the provinces. As such, the law as interpreted in one province may not necessarily be applied in another. However, frequently the courts in one province will consider and often follow the decisions of courts in other provinces.
We see more and more public companies partially or completely reorganizing as Income Trusts. What are the advantages and disadvantages to the company and what could the ramifications be to trade creditors? Is there anything we should be questioning or looking for in this type of transaction?
An income trust (the "Trust") is essentially an investment vehicle which a corporation (the "Corporation") can establish in order to divert and distribute its revenues in a generally more tax efficient manner to the investors of the Trust.
While the pros and cons of establishing an income trust are largely tax driven, extremely complex and beyond the scope of this forum, income trusts basically operate by taking the monies raised by the Trust from its investors and loaning them to the Corporation. Such loan can either be on a secured or an unsecured basis. Revenues from the Corporation's operations are then paid to the Trust in order to service the loan with those monies then being available for distribution to the Trust's investors.
The typical structure sees virtually all of the Corporation's distributable income paid out without corporate tax because the income is being used to service the Corporation's debt (e.g., the loan from the Trust). If the investors of the Trust are tax-exempt entities such as RRSPs or pension funds, payments to them from the Trust will be received on a more favourable tax basis than if the monies were distributed as dividends.
While the establishment of the Trust will not alter the manner in which the Corporation carries on its business (note that the Trust does not carry on business - it is simply an investment vehicle), the difference is that with the establishment of the Trust, the Corporation has a new and typically large creditor (being the Trust) whose debt must be serviced by the Corporation.
From the perspective of companies doing business with the Corporation and extending credit to the Corporation, while the creation of the Trust in and of itself will not negatively impact upon the Corporation's ability to carry on its business, companies doing business with the Corporation may be at a greater risk should the Corporation subsequently run into financial difficulties. Aside from the Corporation having less flexibility to refinance since cash flow will be committed to debt service on the monies owing to the Trust (and other lenders), the Trust represents a new creditor which did not previously exist. If the Trust's loan to the Corporation is made on a secured basis, the Trust will be entitled to recover its monies prior to all of the Corporation's unsecured creditors, thereby diminishing the pool of funds available to the unsecured creditors. Similarly, secured creditors are at risk to the extent that the Trust's security has priority over their security. If the Trust's loan to the Corporation is made on an unsecured basis, the Trust will be another unsecured creditor sharing in the monies available to the unsecured creditors, meaning less monies will be available for the unsecured creditors had the Trust not been created.
Is there a timing difference from the time a security agreement is registered and perfected?
They can happen at the same time or at different times depending on the situation. If there are no competing securities registered, a security document can be registered and perfected at the same time. If there are competing securities, a security agreement can be registered one day, but perfection may not take place until the other secured parties are notified.
Is it a recession?
A recession is defined as 2 consecutive quarters of negative growth in an economy. The problem with the definition is it is only possible to determine if a recession has occurred after the fact. A number of well regarded economists believe that the U.S. is in a recession. This opinion was reinforced when the latest numbers showed a decline in service jobs
What triggers a recession?
The last 2 recessions, in 1991 and 2001, were preceded by financial catastrophes, the Savings and Loan Fiasco and the Bursting of the Hi-Tech Bubble. When events like these occur, they not only take equity out of the economy, but more importantly, they reduce the consumer’s confidence; that is, the consumer becomes concerned and reluctant to spend.
The intrepid consumer drives the U.S. economy, and for the last decade, it has been overspending. The U.S. has a negative saving rate. The ballooning equity in homes or the paper profits in the Hi-Tech Stock Bubble allowed them to overspend based on credit secured by these assets. When the value of the assets decline, the consumer is often left technically bankrupt.
The recovery from the Sub Prime problems may be protracted, as the full extent of the write-offs will not be known until 2010 and the poorest people, who are most affected by the loss of their homes, will definitely not be driving a consumer recovery.
What is a Credit Crunch?
A number of the largest banks in the World have had to write off billions of dollars of investments in the Sub Prime mortgage market. When a bank lends money, it must always set aside a certain amount of capital to support the loan. The term is Capital Adequacy. To support the loans they are making, banks must have a certain Tier I Capital. If the bank has to write off large amounts of capital, it may no longer have adequate capital to meet the reserve requirements and it must either reduce its loan portfolio or obtain new capital. The basic impact is that credit becomes tighter and more expensive.
What is Stagflation?
Stagflation as experienced in the 1970’s was a combination of a slowdown in the economy at the same time as prices were rising. Today, the U.S. economy is definitely slowing, if it is not already in recession, and at the same time, we are seeing inflationary pressures on energy and food. When energy and food prices increase together, it often signals a recession as the consumer’s discretionary spending is heavily constrained. A larger part of a decreasing pie is eaten up by these 2 items.
How does a slowdown affect companies?
As demand is affected by a decline in consumer confidence, it becomes more and more difficult to maintain sales levels. The inflationary pressure felt on inputs becomes harder to pass on and margins become squeezed. As margins become squeezed, the companies must reduce costs by purchasing less and laying off workers. The recessionary spiral steepens.
What action can be taken to address recessions?
Because recessions are often caused by decreasing demand, the financial engineers want to increase the demand by offering financial stimulants in the form of tax reductions, subsidies in the form of transfer payments or interest rate reductions to make credit easier to obtain. This slowdown is largely caused by a collapse of the debt structure resulting in many people declaring bankruptcy or being laid off. It is unlikely that easier credit is the answer. As the Sub Prime collapse really affected poor and middle-class families, a tax break is not about to put much money in their pockets. The solution may take us back to the 1930’s when the focus of Government had to be on creating real jobs. Fortunately, real jobs in Western Canada are insulating Canada from the full impact of the situation in the U.S., but there may only be a 3 to 6 month delay.
How does theoretical economics affect credit decisions?
- As we have seen in the recessions of 1991 and 2001, marginal companies in many sectors will be forced to file for protection because of liquidity problems caused by them failing to meet their financing covenants, or the bank not renewing their line of credit, or credit becoming more expensive. A failure of a major buyer can cause a company to break its covenants and be outside of its margining limit.
- With publicly traded companies, the problems may occur, but at least there is disclosure required if public companies are not meeting forecasts or they are outside of their banking covenants or they are having difficulty renewing their lines of credit. Furthermore, often the debt of these companies is rated and the company’s fortunes are followed by industry analysts.
By the time a credit manager gets the information, the company may already have a large exposure to the buyer. As the situation deteriorates it may be difficult to bring the exposure down. It is a question of timing, the poor results may not be reported for several months and during that period the exposure has been continuing to run. The time between the disclosure of the problem and the reorganization may be very short as the buyer and secured creditors want to protect the assets.
- With private companies the problem is exacerbated, as it is difficult to even obtain financial information, let alone be advised in advance of developing problems. Suppliers don’t know if sales are down, margins are being squeezed or there are problems with the bank. If a credit manager can obtain Financial Statements, they provide a historical picture at best. The effect of the recession is happening in real time, out of sight.
In summary, credit managers work with very imperfect information. Time works against them in obtaining information and they have to often make credit decisions projecting 3 to 6 months ahead. A recession in the U.S. affects many buyers, but in most cases, the credit manager can only guess at how much the buyer is impacted.
Is credit insurance the answer to a credit managerâs prayer?
Not in every case! By the time a credit limit is requested on a buyer, the writing may already be on the wall and the underwriters can’t increase their exposure. This information in itself is useful.
In some cases, the underwriters may only be able to cover some of the exposure due to the credit evaluation or their current level of exposure. Again, this is useful information. In most cases, at least one of the underwriters will be able to approve the buyers. When this happens, credit managers can sleep like babies knowing that they are protected from the unforeseen. Once the credit limit is in place the underwriters monitor the buyer and they will advise you if problems are arising.
Underwriters can, and definitely will, cancel or reduce credit limits, but the cancellation or reduction only applies to future shipments. They have no retroactive effect. Your insured exposures remain insured.