PAUL KRAUSE

Paul loves to swim and golf and has Bora Bora on his travel bucket list. He’s currently binge watching Castle and The Rookie and just finished reading Cold by John Gardner. He loves pizza and would pick it to be the food he would eat every day if he could! Which explains that the one item he says he can’t live without is his treadmill! 😊

If you’d like to learn more about this group and receive an invitation to be a guest at an upcoming meeting, please reach out to Tony Clark – Tony@nacmsw.com

I was recently thumbing through the monthly newsletter from The Greater Oklahoma City Chamber of Commerce. An article titled Benefits of Networking for Entrepreneurs caught my eye. As I read the article, I concluded that the title of the article was a bit misleading. Networking is not just useful for entrepreneurs!  We should all be taking advantage of the opportunities to know people in our profession and to expand our network into other professions.  As a company, as an employee of a company, it's important to participate in community meetings, and social events and even such chamber-hosted events like grand openings and fundraisers.  

Oftentimes, we convince ourselves that we are just too busy to attend these types of functions. When in fact, squeezing in the time to meet people who can help us, and in turn, who we might be able to help is tremendously rewarding. Keep in mind that seeing the results of networking is rarely instantaneous but in the long term, those we meet now can be an incredible resource for us later. While networking, we discover individuals who have expertise and knowledge, people who provide us with motivation, confidence, and sometimes even lifelong friendships. As you build on your life experiences and create a network, keep in mind that it is a process. While you are networking, remember that you are being networked by other people. 

         Are you using your NACM network? Are you taking advantage of the opportunities to network in your profession as well as attorneys, bankers, and credit industry service providers whose experience and, maybe products and services, might provide a benefit for you, your department, and your company? Here are some NACM opportunities to network:

·      Participate in your local, regional, or national industry credit group. What an opportunity to meet people who are doing the same job you are doing for the same customers!

·      Get to the All-South Credit Conference or Credit Congress. Take advantage of expert training, explore new products and services in the expo hall, engage with your colleagues and return to the office inspired and motivated.

·      Consider participating in a local CFDD Chapter. This NACM organization was instrumental in motivating me to complete my CBA and CICP designations. Surround yourself with people who will open your eyes to new opportunities and possibilities.

·      NACM sponsored webinars, seminars, social events…the list goes on and on. Be part of the action! Don’t sit on the sideline and expect good things to happen. The education and network you will build are tremendous. As an example, due to some company restructuring I found myself in the unenviable position of being unemployed. Do you know who reached out to me and asked me to consider being a part of their team? The instructor from the class I took five years previously! It’s that network. It worked!  

Key performance indicators (KPIs) can help credit departments measure the effectiveness of their processes. While creditors may differ on how they apply metrics, here are five KPIs that can help paint a clear picture of how their credit department is performing.

DSO is a popular metric that shows the average number of days customer loans are past due from the time the invoice was created. However, DSO does not solely reflect the performance of the credit department because it encompasses a more global view of your company’s effectiveness, according to Thomas Reuters.

This index can provide a precise view of how the company is handling debts. By comparing the amount of debt collected over a given time frame with the number of receivables that were still outstanding, creditors can set a firm target to increase their collections during the next time period. CEI may be confused with DSO at times, however, when DSO numbers go down, the CEI should increase, per Thomas Reuters.

This KPI shows the average profit being generated from each account you’re collecting from. It is calculated by dividing your company’s gross profit over a specific period of time, and dividing that by the total number of delinquent accounts managed during that period, Thomas Reuters said. Monitoring this metric can allow creditors to better understand how changes directly impact their bottom line.

Measuring how many customers are promising to pay provides the percentage of calls made that ended with said promise from the debtor, per Thomas Reuters. A bonus KPI that can be analyzed in conjunction with PTP is right party contacts rate (RPC). This measures the ratio of outbound calls that were made to the correct entity in which you are seeking payment. Ensuring you are contacting the correct entity is step one in the collection process; and establishing a promise to pay from that entity can significantly increase the rate at which you collect.

This KPI is pretty cut and dry because it measures the rate at which you collect on outstanding accounts. Getting this number as close to 100% as possible is the goal for any credit manager because it ensures the credit department is maximizing the amount of cash flow going into the company.

1.    Accept the order

2.    Reject the order; or

3.    Accept the order conditionally upon obtaining security to ensure collection, (such as security agreements, mechanic’s lien rights and personal guarantees).

 

·      Decisions on the extension of credit;

·      Managing relationships with difficult customers;

·      Information gained through your network of peers and educational accomplishments;

·      Fraud detection; and

·      Collection of receivables

Credit Managers:   GO FORTH!!