Quick Contact

Are you missing valuable credit information on those you deal with?

Find out what information is available. Just complete the form below and we will contact you.




Re-Type Code:

Refer Potential Members

Why should I submit potential members to NACM?

Are you tired of dealing with
credit reference requests?

Direct the requesting company info to NACM. As a member they will have access to our reports. You will get fewer credit reference requests and their information will be added to your NACM reports.

Connect With Us

< back to News
Sep 01 2014
Birthday Surprises are Great - Credit Surprises Aren't
Shane Norman, CCE, Wheeler Machinery

Several years ago, I relearned an important lesson - Surprises in the Credit field are generally bad news.


One of my staff came in one morning to inform me that a mine site had been shut down overnight. Evidently, the employees were surprised as well when they arrived at work that morning to find the gates locked. Immediately, I looked up the account and found an outstanding high six figure balance most of which was current. We had just finished several large complete engine rebuilds and had already delivered them. The sound in my head was similar to someone sitting on a whoopee cushion. As I relayed the information to my CFO, I felt extremely lacking.


I decided that I needed to adopt a new mantra - No surprises!


So I went to work to sort out what I needed to do in order to eliminate surprises. I settled on the following action plans to get me closer to that ideal:

* Timely review of account credit limits

       -Larger lines get an annual or semiannual review

       -Mid-sized every other year

       -Small lines every 3rd year

* Making credit limits meaningful (stick) versus an arbitrary "guidelines" number

       -Get executive level buy-in with updated written policy and procedures

       -Training sales and billing departments

       - Hold people accountable

* Obtain the tools needed to see what I wasn't seeing

       - Effectively utilize my account monitoring already in place

       - Subscribe to credit risk monitoring for public company bond, risk ratings, and financial statement strength

* Proactively manage constantly changing account balances and credit limits with timely alerts to the receivables and sales staffs

       - Accounts heading towards problems (aging)

       - Accounts that are problems (aging)

       - Accounts that are nearing credit limits

       - Accounts that have exceeded credit limits


Some credit shops are more sophisticated than others and this type of process is inherent to the organization and incorporated into the culture and systems already. Mine wasn't. It took several years to put these points into place with success, but we did. It is all about managing expectations; if we expect there could be trouble or likely will be trouble - we can plan accordingly. If we don't plan or manage our expectations - then surprises happen. I can't say that I haven't been surprised since this date (a bit too ideal), but I can say that implementing the measures listed above greatly improved our ability to proactively manage our risk and expectations. If you have any questions or more details, feel free to contact me.

Print a copy of this article and bring it to the September ICEL meeting to claim your sweet reward for reading the CreditWise Newsletter!