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Congratulations to LARRY MULHOLLAND, CBA (EBAA Iron Sales, Inc.) on his retirement in December. Larry has been a member of NACM Southwest for over twenty years, and we wish him all the best for his well earned and deserved retirement.

We also wish to congratulate longtime member MARGARET WATRAL (Federal Corporation) on her December retirement. Margaret worked for Federal Corporation for 42.5 years. During those years, she had several positions beginning as a file clerk, biller, human resources and finally as Human Resources & Credit Manager. Margaret will be missed at the credit group meetings. She always brought a smile. Now it’s time to go fishing!

Congratulations are in order, also, for RUSS GRIMM (Heatwave) who retired at the end of November after 21 years as Credit Manager. Russ was a strong supporter of NACM MidAmerica and served 4 terms on the Board of Directors over 12 years. Thanks, Russ, for all of your support. We wish you well in your well deserved retirement!

CHERYL BLOW (Locke Supply) began work at Locke Supply 31 years ago as an accounting clerk. She moved to accounts payable and then returned to the Credit Department as Assistant Credit Manager. Upon the Credit Manager’s retirement, she was promoted to take his place. Cheryl says she’s been very blessed to be able to work for so long at a great company like Locke Supply. She is turning over the reins to DALE STRATTON who has been promoted to Credit Manager after being a Collector for Locke Supply for the past 16 years. Best wishes for your retirement years, Cheryl, and to you Dale on your new career path!

Extending Terms During COVID-19 Pandemic

The sudden outbreak of COVID-19 in the U.S. caused many businesses and individuals to fall on hard times, closing up shop, losing income and the death of loved ones. The government stepped in to assist those financially impacted by the pandemic; however, the need for additional assistance fell to others in different industries and sectors to help supplement those experiencing hardships.

“We looked at our customer base and tried to get ahead of the game in early March to develop a terms extension program to help the hardest-hit trades all while not violating antitrust rules,” said Cynthia Smith, CCE, associate director of credit with The Clorox Company. “By opening the program up to an entire class of trade, we wouldn’t have any problems.”

Companies in the business-to-business credit world can have a difficult enough time getting paid without an economic disaster like the one seen during the spring of 2020. Yet, planning and resilience have paid off for some credit departments despite the pushback from customers.

According to a recent NACM survey, two-thirds of respondents reported customers were requesting/demanding extended payment terms due to the COVID-19 pandemic. However, roughly 45% said their customers are receiving the terms extension.

At Clorox, any terms extensions need to be approved by the chief financial officer. “The extended terms program was in part established as a way so the CFO wouldn’t have to be involved in every customer request.” Some customers would ask for 30-day extensions; some would ask for 60 days. “We anticipated we’d receive requests, but we wanted a policy already signed off by the CFO.”

Smith said, planning started in late February/early March, and the program was in place by the end of March. “We knew brick-and-mortars would be hurt heavily, so we looked at nonessential, brick-and-mortar customers as a top priority.”

The extended terms program was originally developed in the credit department, but Smith said, they reached out to finance directors and presented the policy to the CFO. It is also important to get the legal team involved upfront when developing these policies. The program was run through a cost analysis—what would be the price to the company for giving extended terms and what would be the maximum exposure based on historical buying levels.

The extended terms policy was not a blank check nor was it automatically approved. Guidelines were followed when it was built and how it was implemented. The program was only for open invoices at the time the customer requested extended terms. Extended terms were not given on new orders—order volumes should be going down to coincide with business needs, noted Smith. “There was an understanding that going forward the order volume would be drastically reduced; we didn’t want the policy to incentivize customers to increase order volume to get extended terms.”

Some customers were happy because they were getting more time and longer terms then they were asking for, but some customers were not as happy since they wanted longer terms. “We were consistently applying the policy, and when faced with questions, we would explain, ‘This is the policy we have to be fair and equitable to all.’”

For those skeptical of this type of program or those wanting to avoid the risk of floating extra time for payments, Smith said, most of the extended terms that were granted have already been paid, and the program has been closed. However, there is also the potential to use this extended terms policy as a foundation going forward should it be needed due to another economic failure. “It’s easier to have a process in place and reinstitute the policy in the future if need be.”

-Michael Miller, managing editor

NACM SOUTHWEST MEMORIAL SCHOLARSHIP

The NACM Southwest Memorial Scholarship was created to honor past NACM Southwest members who gave generously of their time and expertise to serve their Association. This $1,000 scholarship is available to graduating high school seniors of NACM Southwest members and staff who have achieved academic excellence while also being involved in high school and community activities. Applications are available by emailing Tony Clark at Tony@nacmsw.com . The deadline for receipt of completed applications is April 1, 2021.

Anyone can be a leader with the right combination of perseverance and determination. Yet, on their journey to acquire the leadership mindset and skills, most credit professionals are following the guidance of those who are already leaders in the workplace. Through these experiences, credit leaders-to-be experiment with different leadership styles, pocketing effective methods they plan to use in the future. Good and bad leaders will come and go, but it’s what credit leaders-to-be learn during this time that will fuel their ambitions.

For more than a quarter of a century, Accounts Receivable Manager Joe Bahhur said he’s struck a nice balance between being a leader in both A/R and credit, protecting the company’s assets and helping grow sales, while limiting risk. However, he wasn’t always in a leadership position in the early years of his career. Bahhur said he used to work with managers who created an environment where it was clear that they preferred to cultivate an “us versus them mentality.” These managers often felt threatened when Bahhur knew information they weren’t privy to and they didn’t appreciate the recognition Bahhur received from others. That was when he realized there’s no one person who can successfully run a department without help from others.

“Team members encompass a variety of skills and relationships,” he said. “It is important—specifically in credit—because of information regarding a customer that a salesperson may share with an associate and not management or the relationship the associate has with an accounts payable associate that holds information vital to decision making.”

Team meetings help cultivate a real team environment, Bahhur noted. It allows the employees to share ideas on how to deal with sales, process improvements, tech tips, etc. It is also effective to recognize an employee for going above and beyond. Leaders can include their employees in decision making, ask for input, and help them develop so that they can continue growing.

By recognizing the true characteristics of a leader through the eyes of his past leaders, the A/R manager said he always makes time for his associates. If they are asking to see him at an inopportune time, he will agree on another time rather than “blow them off.”

“I had to be resourceful and find answers for myself if [my former leaders] were absent or checked out,” Bahhur said. “I learned that even though those people may appear to be ‘successful,’ they were not respected by their peers or their subordinates. I think it is important for leaders to ask the employee their opinion in terms of how they feel a situation should be handled.”

One-on-one conversations with their employees in order to get periodic updates on specific customers is another good method, he added.

Even if ineffective leaders are somehow able to make a department run, Credit Analyst Curtiss Vlastnik said they won’t be successful in growing the department. Working with a poor leader is difficult because they are not willing to listen to the team’s suggestions most of the time. The best way to do this is to effectively communicate and listen to your team, allowing mistakes to be corrected and improvements to be put into place that will ensure future success

“Credit tends to follow the same rules and principles throughout the department, so when something changes, it is imperative that communication and listening is utilized by the leaders, as these changes

tend to be significant,” Vlastnik said. “Making sure everybody understands this, and can implement these new changes is crucial for any credit team.

The core principles of good credit are consistency and sound decision making, the credit analyst said. For his team, they have created presentations and other tools that allow any new analyst to pick up the job in an efficient manner.

Vlastnik also stresses the importance of asking for help if employees need it. He came to this conclusion when he first started the job and his coworkers helped him transition into his role by taking the time to work with him and answer any questions he had. Additionally, his department does team-building activities that allowed them to grow closer as a team and learn each other’s learning styles.

“I have been with leaders who effectively followed these principles and those who have not,” Vlastnik said. “Having a ‘do it my way or the highway’ team constricts everybody else from developing their own skill sets. If you want others to blindly follow your process without offering insight, you are better off hiring computers to work for you. Putting your team in an environment where they know their opinions and suggestions are heard and they can ask for help puts the foundations in place for a strong credit department.”

Leaders should be willing to work with their team to enhance their growth and allow them to become productive team members for not only the credit department but the company itself, he said.

—Andrew Michaels, editorial associate

Not all jobs lend themselves to a remote working environment. Doctors can’t perform surgeries, postal workers can’t deliver mail and restaurant owners can’t run a business, as each profession requires an environment equipped with the necessary tools to complete the work. Some believed this to be true for the business credit profession as well, limiting remote working to occasions such as customer visits. Now months into the Coronavirus pandemic, credit professionals are learning that working remotely is not only possible, but also beneficial in numerous ways.

According to multiple NACM surveys conducted since the onset of the outbreak, the majority of respondents agreed that working remotely wasn’t common in the credit department prior to this year. In March, nearly 73% of more than 540 respondents said their departments were working remotely since the pandemic began—a significant increase from the 13% who said they worked remotely frequently or any time they wanted prior to that time. Several credit professionals from around the country said remote work is ongoing but remains a learning process.

CECO, Inc., Credit and Collections Manager Alaina Worden, CBF, said working anywhere outside the office was rare prior to COVID-19, only happening a handful of times each year. In fact, she was against working remotely over fears of being unable to monitor the department’s progress. Some tasks remain a challenge, such as completing month-end close reports and KPI’s, but Worden acknowledged that she has come to see many advantages.

“I am more engaged with my team. We have become a stronger, closer team as we work through this adversity that is set before us,” she said, adding that some credit-related tasks have become easier, including reviewing and modifying credit policies and procedures, working on streamlining, and enhancing department roles to be as efficient as possible.

With less interruptions and a heightened focus, Worden said she has more discussions with the sales team in a meeting environment rather than one-off conversations, creating a positive change in the relationship between credit and sales.

As the North American director of credit management for Amer Sports Americas, Paul Amante, CCE, CICP, said “the nuts and bolts of credit and collection management are easily executed” with his computer and cell phone. Amante said he has experienced no difference in completing credit analyses, e.g., pulling reports, scoring accounts, making credit decisions on new or existing customers, when working remotely versus working in the office. Making collection calls is generally not a problem either, unless distractions from family arise. Tasks are neither easier nor more difficult, he noted, with only a few exceptions such as paper check processing and bank deposits.

“For checks sent to our office, instead of our lockbox where most payments go, we are sending one of our clerks into the office once per week with the single focus being to process mail and make a bank deposit,” Amante said. “She is also taking care of any clerical work that needs to be done and then trying to get out of the office as quickly as possible.”

Crawford Electric Supply Company, Inc. Credit Manager Anne Scarcella, CCE, CCRA, said it isn’t necessarily the tasks that are difficult to complete as a remote worker, but more so having the discipline to step away from the desk at the end of the workday. Having worked remotely about 20% of the time prior to the pandemic, Scarcella said she was already equipped with everything she needed to perform

her job 100% outside of the traditional office setting. However, what’s missing is the face-to-face interaction she once had with her credit and sales teams, an element that can’t be replaced by programs like Zoom or Microsoft teams.

“I do miss the ability to walk over to sales and have a conversation with them regarding a customer or a problem,” Scarcella said. “But I think remote work is the new normal. We have to do whatever is necessary to be able to effectively manage our teams and tasks. I think organizational skills and self-discipline are paramount I being successful working remotely.”

—Andrew Michaels, editorial associate