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  • 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.

     
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  • 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.

     
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  • 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 ...

     
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  • 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...

     
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  • Supreme Court Rules Crown Doesn’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.

     
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  • PPSA & Legislative Q's
     
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  • 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.”

     
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  • 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...

     
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  • 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...

     
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  • Credit application Terms

    Here is a list of items that are commonly included in B2B credit applications.

     
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  • 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...

     
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  • 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.

     
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  • Cross Border and International Collections
    You've serviced your client, you've invoiced the job, and you've not been paid. What can you do?
     
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  • Calculation of the Collection Effectiveness Index’s
    Days 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.
     
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  • Credit and Collections as a Revenue Generator
    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 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.
     
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  • 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...

     
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  • Construction Credit

    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...

     
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  • These Best Credit Practices in Brazil Will Keep You from Falling Downhill
    I’m 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.
     
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  • 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.

     
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  • 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.

     
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