News, Information and Commentary
October 2018
HISTORY REPEATS ITSELF
A few thoughts from
Jon Flora, President & CEO
I had a great high school history teacher. He would sit up on a bookcase and, with arms waving, lecture from on high about our Founding Fathers, the Westward expansion, and innocent until proven guilty. His enthusiastic lectures instilled in me a lifelong passion for American history that has carried over to my professional life.
Case in point: We’re seeing repeats of what happened before the Great Recession, DotCom Bust, and previous economic downturns.

Leading up to the 2007 financial crisis, our economy was chugging along quite nicely. Business was good; everyone’s customers were paying on time. Many of our NACM customers got comfortable and quit pulling credit reports. They also sat on their A/R longer. Best practices were set aside until… { insert Armageddon music }.

When the economy took a fast and nasty fall, our customers started pulling reports again in a big way. And, then they hurriedly increased their use of our Collections Department. While we were able to help a lot, we couldn’t overcome the fact that many debtor companies just couldn’t pay their bills. Too much time had passed with too much leeway provided.

This pattern has pretty much led every downturn and, now, we’re seeing signs that it’s happening again. I have spoken with a few of my counterparts across the nation and they’re seeing similar signs. Members and customers are pulling fewer reports and sitting on debt longer than normal. Best practices are again being set aside because business is good and companies want to save a little money by cutting back in these areas.

As British Prime Minister Winston Churchill said at the outset of World War II, “Those that fail to learn from history are doomed to repeat it.”

This is not a message of doom. It is, however, a reminder to ensure that your company is continually following best practices. If you consistently follow proven methods, like always pulling credit reports and turning accounts over to our Collections Department before too much time has passed, you will usually stay ahead of the game. When the next downturn comes – even if it’s small – you will weather the storm better than those who choose a more relaxed path.

We are watching forecasts and see some questions on the horizon. Stay disciplined and take full advantage of the credit tools available. Let us help you avoid the repeat of history.

In other news, please check out our Surcharging story. We promised a report on our first month's experience with Surcharging and are sharing the high points with you.

Also, check out the Educational offerings coming up. Some of them require planning on your part and we don't want you to miss them.

I hope your autumn is off to a good start and your favorite football team has at least won a game!

Best regards,  
SURCHARGING REPORT
SURCHARGING UPDATE
First month review


On September 1st, NACM BCS began surcharging for the use of credit cards. The primary reason was so we could help educate you on the process. Our partners at UTA and Worldpay have done a great job getting us ready and, like us, learned a few things. As promised, here's a report on what we've learned in the first weeks:
 
1. When given the option between a credit card surcharge and paying by check or ACH, a number of our customers have chosen the latter. One smart fellow initially made this choice over a 90 cent surcharge and then figured out the cost associated with writing and mailing a check. He backtracked a bit and has chosen ACH.

2. We have a member using our Collections service in England. One of their debtors chose to pay by credit card. Surcharging cannot happen for international transactions.

3. We have been surprised by how many debtors pay their collections bill with a debit card - which can't be surcharged .

4. A number of our members have called for help to set up surcharging programs for their companies. Frequently heard: "This is something we've wanted to do for a long time." At the same time, a few of these same customers have made it clear they don't want to pay NACM's surcharge!

We're glad to help develop a program for their use and, although mildly entertained by their reaction to our charge, this is the reason we have no-cost options for paying your NACM invoice.

If you're thinking about adopting a surcharging program, you will likely be faced with similar questions. G ive us a call so we can help you avoid some pitfalls.
MANY CARD HOLDERS STILL USE CASH FOR SMALL PURCHASES


Believe it or not, 45 percent of consumers who own rewards credit cards say cash is still king for purchases under $10, according to a new CreditCards.com poll. Debit cards (30 percent) come in second, while credit cards (23 percent) take a distant third place as the payment method of choice for buying inexpensive items. 

Check out the poll data in this story from CrediCard.com. Just click below:



YOUR PARTNERS IN PAYMENT PROCESSING - CHECKS, ACH, CREDIT CARDS, SURCHARGING
BUILD YOUR PROFESSIONAL SOCIAL MEDIA
NETWORK TODAY
CALL FOR MEMBER INVOLVEMENT
JOIN NACM IN YOUR STATE CAPITAL

Whether you live in Western Washington, Alaska or Hawaii, Legislative sessions will begin in January. Most of our policy work has historically focused on Washington but this year we want to be ready to lend a hand to our member businesses no matter where you are operating. The tone of the times suggests any number of things could happen politically and NACM BCS wants to be ready to represent our customer interests.

In order be effective in this role, we need a few members willing to serve on Legislative Committees for each state. This typically means staying aware of what lawmakers are considering that might impact commercial credit or business in general. When there's something important to our profession, NACM goes into action which mostly means calling on elected officials or engaging in member letter writing campaigns. This involvement will give you an up-close view of how our political system works which can be interesting.

If you would like to dip your toe in political waters and help the credit profession, please drop an email to:

We expect the state legislatures may be busy this year, so let's get prepared ahead of time to support the commercial credit world. Thanks for your consideration!
BUSINESS NEWS
time_for_taxes.jpg
WASHINGTON B&O TAX ANNUAL RECONCILIATION DUE OCTOBER 31
Businesses subject to the Washington State Business and Occupation (B&O) tax and that reported apportionable income—service and other or royalties, for example—in 2017 are required to submit an Annual Reconciliation of Apportionable Income by October 31, 2018


HAWAII'S GROWTH DOWN, BUT NOT OUT
UHERO Economic Update

Hawaii’s expansion has slowed along several dimensions. Volcanic activity and flooding have dealt a setback to tourism. The construction sector has continued to drop back from its 2016 peak, and job growth has slowed to a near-stop. Still, the fundamentals look favorable. Global tourism continues to power forward, and there remains a healthy pipeline of construction work. And, Hawaii continues to enjoy its lowest unemployment in many years.

Click below for the University of Hawaii report:

BARGED FUEL TO ALASKA OIL FIELDS REPLACES TRUCKS

Involves NACM Member Crowley

For the first time in decades, a transportation company delivered a bulk shipment of diesel fuel to the Prudhoe Bay oil fields by sea, reopening a route that could reduce the risk of dangerous fuel truck rollovers along Alaska highways.

The unusual Aug. 30 barge delivery of 2 million gallons of fuel replaces 200 trips by truck

THE WINDERMERE ECONOMIST

As Chief Economist for Windermere, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. He specializes in residential market analysis, commercial and industrial market analysis, financial analysis, and land use and regional economics.

His monthly review offers interesting insights to our current economy. Click below for more:

U.S. ECONOMIC AND CREDIT TRENDS OUTLOOK


Equifax deputy chief economist, Gunnar Blix delivers insights that can help drive strategic growth at your organization. During this webinar, Gunnar will discuss:
  1. U.S. Macroeconomic Overview
  2. U.S. Consumer Credit Trends
  3. Special Report: Trends in Online Lending

Click below to hear the webinar:

CREDIT REPORTING
SMALL BUSINESS CREDIT PERFORMANCE REMAINS STRONG

According to Moody's Analytics economists, the overall outlook for small-business credit is positive. Outstanding balances rose in the second quarter, as did the average balance per business. Delinquency rates continued the downward trend they have maintained through the expansion, and default rates stabilized at the level they reached last quarter. Continuing strength in the economy will keep small-business credit performance strong through the end of the current expansion, if not longer. 
Rising rates and destabilizing trade policy are potential sources of trouble up ahead, but thus far they haven’t slowed down small-business credit growth. If trade tensions escalate far enough, they could affect the labor market and incomes. The bouts of volatility in financial markets this summer are attributable to trade actions that could be aggravated by the imposition of additional tariffs or other actions limiting trade. 
Small-business owners who use personal sources to finance their businesses could be disinclined to invest if markets are unsettled. Additionally, if employers begin laying off workers under an aggravated trade scenario, this could dampen the positive labor market outcomes, which are starting to result in faster rising wages, thereby reducing demand from consumers.
More likely than not, trade will remain a small fish in the pool of risks to credit, but it’s a risk that bears watching, especially given heightened trade tensions.
BUSINESS CREDIT FOR THE TRUCKING INDUSTRY - PART ONE


Trucking companies face numerous business challenges, especially small and medium-sized companies.

From skilled labor shortages to cash flow problems to intense regulations. Small business trucking companies often struggle the most and are being pushed out of the industry by larger entities.  

Learn how business credit can help these companies succeed in part one of this series.

Click below for D&B's look at this issue:





COLLECTIONS
We have a winner in our
Collections Contest
For the last couple of months, we have been encouraging members and customers to try our Collections program. Whether you are a first-timer or a returning user, we've asked you to give us a try. And, many of you have! For that, we say THANKS!

Everyone who responded was entered into a drawing for an Amazon Alexa. And, the winner is...

BMC Building Materials
Bryan Manley

Congratulations, Bryan and thank you for your support. We look forward to collecting on your behalf.

The response to this contest has been both fun and rewarding for several of our customers. If you missed out, keep an eye on this newsletter for another similar contest to come soon.

In the meantime, if you need help with your collections , give us a call at 800-423-5710.
EDUCATION
LAST CHANCE TO REGISTER FOR THE NACM WESTERN REGION CREDIT CONFERENCE

This year's NACM Western Region Credit Conference is coming up in a just a couple of weeks.

Don't miss this opportunity to hear great presentations, learn interesting things, and meet new people.

Join NACM counterparts from around the west in Salt Lake City, October 10-12.

To register, please click on the button below.
Stress stressful stressed businessman sleep tension laptop
ONLINE WEBINAR: NOV. 7, 2018
FREE TO MEMBERS

"MANAGING STRESS IN THE CREDIT DEPARTMENT"

Frazzled, floundering and frustrated when dealing with Credit Department Stress? Join our Presenter Robert Shultz to come away with strategies for managing the day-to-day stress with which busy credit professionals are faced. 

12:00 - 1:00 PST
11:00-12:00 AST
10:00-11:00 HST
1:00-2:00 MST
ALASKA HOLIDAY FORUM

TUESDAY, DECEMBER 4TH
EMBASSY SUITES, ANCHORAGE

Join us in Anchorage for our annual Alaska Holiday Forum featuring outstanding presentations on credit topics and Alaska business. And, of course, the social networking with professional colleagues is always a good time. Details to follow but be sure to save the date . See you on December 4th!

CAREER PLANNING
THREE NEW OPPORTUNITIES!

Check back often. New postings all the time

Consider highlighting products or services, sales or promotions, personal bios, and more. Use images that complement your message, and link your images to supporting resources. Click below:

big-ben-sm.jpg

IS YOUR RETIREMENT CLOCK WINDING DOWN? TIME TO ACT!

Just 18 percent of workers believe they will fully retire and live comfortably.

Consider highlighting products or services, sales or promotions, personal bios, and more. Use images that complement your message, and link your images to supporting resources.


EVENTS & EDUCATION CALENDAR
Industry Trade Groups
Puget Sound Area

October 9

11:30 a.m. Transportation - Duke's Chowder House

October 11

11:30 a.m. Floor - Duke's Chowder House

October 16

11:30 a.m. HVAC - Duke's Chowder House

October 17

11:30 a.m. Tacoma Construction - Johnny's Dock
11:30 a.m. Food - Duke's Chowder House

October 18

11:30 a.m. Wiring - Duke's Chowder House
11:30 a.m. Eastside Construction - 13 Coins Bellevue


Honolulu

October 16

11:30 a.m. Hawaii Hospitality - Hilton Waikiki Beach Hotel

October 17

11:30 a.m. Hawaii Food - Waikiki Yacht Club

October 19

11:30 a.m. Hawaii Building - Waikiki Yacht Club


Anchorage

October 17

12:00 p.m. Alaska Suppliers and Food - TBD

Upcoming Professional Programs
Serving the Commercial Credit profession since 1899
NACM Western Washington Alaska Hawaii | 800-423-5710
P.O. Box 3665 - Seattle, WA 98124 | www.nacmbcs.org

All Rights Reserved