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April/May 2020
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Please keep checking our NACM Southwest website for all COVID-19 Resources and Updates for our members.

The More You Know

  • 6/14/2020 CBA,CBF and CCE Exam at the 2020 Credit Congress in Las Vegas. Application deadline: 4/17/2020

  • 7/27/2020 CBA,CBF and CCE Exam Location:TBD Application Deadline: 5/29/2020

  • 11/9/2020 CBA,CBF and CCE Exam Location: TBD Application Deadline: 9/4/2020


Financial Statement Analysis - Upcoming Course - May 2020
·          Dates: May 17-21, 2020
·          Cost is $799 - includes tuition, textbook, breakfast & lunch daily. 

Houston - Business Credit Principles - Upcoming Course TBD
·          Dates: Every Saturday - TBD
·          Cost is $849 - includes Tuition, Textbook, Breakfast Daily

Dallas - Business Credit Principles - Upcoming Course August 2020
·          Dates: August 2-6
·          Cost is $849 - includes Tuition, Textbook, Breakfast and Lunch Daily
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A Seller’s Guide to Letters of Credit
If there’s one thing credit managers learn quickly after agreeing to extend credit, it’s how their department is going to get paid. Payment options from least to most risky include cash in advance, letter of credit (LC), documentary collection and open account. Although LCs hold less risk, American Export Training Institute President Chip Thomas, CICP, said the level of risk increases when creditors don’t know the process.
Over the course of his 22-year banking career and 43 years in international trade, Thomas said he’s seen the trials and tribulations credit managers encounter with LCs in addition to their numerous benefits. Thomas discussed what every exporter needs to know when using LCs during an FCIB webinar, where he described them as “the granddaddy of all payment methods.” According to the International Chamber of Commerce (ICC), 41% of ICC’s trade volumes is through LCs.
“Many companies get involved in the world of letters of credit, not because they want to, but because letters of credit are brought to them,” Thomas said. “It’s too late when you get it to figure out what it is. You need to figure out what it is before it’s sent to you.”
LCs are designed to be a very quick, painless payment tool, he explained, with four key participants: the beneficiary, the advising bank, the issuing bank and the applicant. The beneficiary and applicant are generally the seller and buyer, respectively. The applicant requests an issuing bank to issue/create an LC, which is then sent to the advising bank that authenticates it and makes sure it’s a legitimate deal before sending it to the beneficiary. It becomes a credit tool for banks as it allows the buyer to finance their purchase from the bank.
An LC is many things—a payment method, a written payment arrangement, a payment contract—but it is not a payment guarantee. Thomas said LCs assure payment to the beneficiary if performed correctly, i.e., they must present complying documents to the banks after shipment. Complying documents adhere to terms and conditions specifically written into the LC.
“Before an LC is ever created, [the beneficiary] has to negotiate [their] deal,” Thomas said. “You may have contract people in your organization to work on contract language with buyers. It could be a sales contract or a simple purchase order.”
The deal is comprised of the following points: 1. Logistics (INCOTERMS/pricing); 2. Documentation (keep it simple); 3. Dates (issue, expiry, shipment); 4. Correspondent banking (advising vs. negotiating vs. confirming); and 5. Payment structure (where, when and by whom?).
If the contract doesn’t include these elements, he said, the seller is going to have a tough time getting paid. Because the contract always comes first, the seller must negotiate the agreement with the buyer to determine how they’ll get paid.
Thomas said it is also important to note the structure of every LC, beginning with irrevocability and ending with confirmation. Sellers commonly believe these will protect them; however, it does not because it allows buyers to control the other characteristics: the Issue Date and Expiry Date/Expiry
Location; Issuing Bank/Advising Bank; Importer/Exporter; Value/Currency; Description of Goods/Services; Required Documents (commercial invoice, packing list, certificates and bills of lading); Payment Terms; INCOTERMS; Port-to-Port Information (Dispatch to Destination); UCP 600, specifically Articles 4 and 5; who pays LC Fees; Latest Ship Date; Presentation Date/Period; whether Partial Shipments and/or Transshipments are allowed; and Paying, Drawee and Reimbursing Banks.
“How can the exporter benefit from an LC when it negotiates and controls only two of the 20 key elements of an LC? You can’t!” Thomas said. “It’s going to be a disaster. You’re not getting any protection at all because you’re not going to be able to control anything else. And if you can’t control it, how are you going to get paid?”
An LC isn’t just an object, Thomas added. There are components to it that have to be understood and synced with the other elements of the seller’s deal.
—Andrew Michaels, editorial associate
NACM Southwest Scholarship Fund
The NACM Southwest Education Fund is designed for ALL NACM Southwest members who contribute to the fund. It provides a great opportunity to help keep the costs affordable for the educational seminars and events that your association offers.
With your contribution, you and your company, as well as your fellow credit professionals, help provide the opportunity for low cost educational events that help elevate the level of the credit profession and professional.
The next time you receive your invoice, please consider the voluntary education fund contribution. The beneficiary of the fund may be you and your company!
Any questions regarding the Education Program please contact Tony Clark NACM Southwest 972/518-0019.

What Is Lost Can Be Found: Personalizing Credit Relationships
The passage of time fuels the never-ending cycle of new hires and retirees flowing in and out of the workforce. Those who are bringing their careers to a close often leave behind knowledge and experience, while the newly employed build upon their predecessors’ legacy to develop fresh ideas for the position. With the latest cycle currently underway in the credit industry, longtime credit managers are expressing concerns about the change and/or loss of personalization in business-to-business (B2B) credit and why it’s crucial their successors carry on this quality.
For the sake of this article, I will use TechTarget’s definition of “personalization,” which is “a means of meeting the customer’s needs more effectively and efficiently, making interactions faster and easier and, consequently, increasing customer satisfaction and the likelihood of repeat visits.”
Just before the start of the New Year, Forbes shared five B2B marketing trends anticipated in 2020 with a focus on millennials in the profession. The article cited a survey from marketing service Merit that found more than 70% of millennials are involved in buying decisions. Technology plays a heavy role in millennials decision-making process, the majority basing their decisions on information from search engines and websites. Another study from software company Salesforce states that 72% of buyers expect personalized communication from B2B companies; otherwise, they’ll find someone else who will. 
“First impressions matter as much as ever in B2B markets,” The Harvard Business Review reported in 2018.
Much of this information is particularly useful for companies’ sales teams; however, the shift in personalization also requires credit managers to adapt. At Rosen Materials of Nevada, Credit Manager Sandy McConnell said personalizing credit relationships is not quite what it once was when she started in the industry more than 50 years ago; for example, the way credit managers and customers communicate. Certified mail, phone calls and customer visits are still relevant, she said, but today, it is becoming more apparent younger generations rely more on sending emails and/or texts.
“In this day and age, most of my customers, particularly on the East Coast, prefer texting because a lot of them are just small companies and I’m dealing directly with the owner. They’re out in the field and don’t have time for a phone call,” McConnell said. “They always check their texts and that provides me with a paper trail.”
When she joined the credit industry in 1963, McConnell said, she quickly learned customers like to know their credit managers care about them and understand their problems. She soon began personalizing relationships with customers by showing care, passion, empathy and sympathy—elements that don’t easily translate via phone, text and email. According to McConnell, using those forms of communication can lead to a loss of personal touch.
“I try to get to know a little about what they like and don’t like as far as their personal life because when you make that call, you’ve got a prompt rather than saying, ‘Hey, you owe me money. When are you going to pay?’” she said. “I still like to meet customers face-to-face, as I’m a firm believer in visiting customers even when things are good.”
Credit professional Barbara House said personalization is growing stronger at Qwest Air Parts in Memphis, Tennessee, where the business is seeing repeat customers who are after the one-on-one
creditor-customer relationship. In addition to emails, texts and face-to-face visits, she said her department also uses automated messaging from the computer system.
“[We utilize] the usual methods, [such as] using first names when possible and learning personal tidbits about your customers,” House said. “It seems my generation likes to talk face-to-face or on the telephone, which develops a quicker understanding of our customer. Messages are returned and returned quicker than with other customers.”
The key, McConnell added, is to personalize while also keeping friendship and business separate.
“To [the younger generation], I think personalization is more like a job and how much they can get paid rather than what they can do for the company to protect cashflow and save customers,” McConnell said. “Not everyone is the same, but my goal for 2020 is to continue what I’ve been doing. I have a lot of new accounts I haven’t touched base with yet, but I intend to personalize them as well and get to know them better. I will let my customers know that if they have problems getting paid, I will definitely jump in and help them.”
—Andrew Michaels, editorial associate
All South Credit Conference
September 20-22, 2020

Sheraton Arlington Hotel

1500 Convention Center Drive, Arlington, TX 76011

Rate: $159 Single/Double

Conference Registration will open in June 2020.