Monitor the Entire Supply Chain -- Both Physical and Financial

"In consideration of the 'changing retail climate,' the survivability in the retail sector is extremely challenged. We're seeing increases in retail store closings almost weekly, over the last 60 to 90 days. As such we are taking extra steps by contacting customers whose invoices are not due and confirming invoice pay status while simultaneously 'chatting' with them about their current business environment with the direct intention of understanding the challenges they are dealing with on a daily or weekly basis within their stores."

- Paul Setteducati, Corporate Credit Manager, Dual Electronics Corp

"This credit department is now involved in substantial additional research on customers to ensure payments for services are forthcoming. When concrete is sold to a subcontractor we find it beneficial to also research the general contractor and owner's ability to pay the sub-contractor. In many cases Joint Check Agreements have become a way of life to further ensure payment. These additional steps are very time consuming and expensive in addition to the mental and physical drain placed on the department staff. Of course, the additional work does not bring additional help but is a means of facilitating cash at an acceptable level."

- Burton E. Kidd, Credit Manager, Alamo Cement Co. & Alamo Concrete Products Ltd.

"There has been a marked increase in the amount of communications with sales to seek or clarify existing customer situations as well as a more careful screening of future projects. In many cases we have to look at the financial implications at a level beyond our immediate customer (the customer's customer) to determine if we could be caught in a domino type of crunch. With the passing of the stimulus package, look for more transit projects to go forward -- these projects as well shipping freight via railroads are considered 'green solutions' to transit congestion problems. However, despite some of these federally funded programs, the impact of the economic slowdown is inescapable as a number of major railroads have begun to put 25 percent or more of their boxcars in storage."

- Allen Vickers, Corporate Credit Manager, A & K Railroad Materials, Inc.

Adjust to the New Playing Field

"We are reviewing other alternatives such as factoring and puts. We already have credit insurance on our top 80 accounts and this has assisted in recovering over $2 million in 2008."

- Jim Hester, Director of Credit, New Balance Athletic Shoes, Inc.

We are "raising awareness with our operational staff that the status quo has just changed!"

- Donna Brooks, Regional Collection Manager, ABM Janitorial Services Mid-Atlantic Inc.

"I am finding myself spending about twice as much time on day to day credit checks/collections/order monitoring, than I was a year ago. I only used to get involved with an account when my staff's efforts were depleted. Customers are pushing out their payments to the limit....seeing how far they [can] go before we threaten to hold orders, which is ultimately up to me in conjunction with the sales department."

- Laura de Prato, Credit Manager, Cabot Creamery Cooperative

"More time/resources [are being] spent in educating the sales team in enforcing company credit requirements."

- Terry Baglieri, Credit and Collections Manager, Scientific Design Company, Inc.

"Customers are simply closing doors and walking away...why not, the government is allowing the BIG BOYS to do it...Keep communication WIDE OPEN with customers and sales. LOTS MORE customer visits, MUCH sooner in the game!"

- Christine Stanbrough, Credit Manager, Guntert Sales Div., Inc.

"We are struggling with increased returned EFT's (ACH payments) and NSF checks. We are also experiencing a lot of credit card disputes, something that we hardly ever dealt with in the past. We are reviewing accounts closely and tightening credit limits. We are also trying to get most of our customers on EFT payments."

- Colleen U. Jones, Credit Manager, Kretek International / Phillips & King International

Batten Down the Hatches

"We are being more aggressive on our collection calls and being more proactive on deduction management in order to improve early payment!"

- Ken Zanolini, F Rodgers Insulation

We are "watching closely for any negative payment trends and monitoring bank lines and availability."

- James Albetta CCE, Director of Credit, Ansell Healthcare Products

"We are selling off our value brands and focusing on paying down debt."

- Kimberly Pierce, Credit and Treasury Manager, Barton Inc.

"We have done an extensive review on customer bank agreements (availability, covenant compliance, and loan maturity dates) to identify accounts needing additional monitoring."

- Credit Director of a major CPG company

Our "team is just keeping an eye on marginal accounts, watching food group postings, reaching out to peers a little quicker, [and] monitoring accounts closer."

- Kristine K. Skupas, Corporate Credit Manager, Schreiber Foods, Inc .

Surviving Staff Cuts

"We are having to reduce staff at a time when collection activities are an even higher priority. This will result in additional strain on the remaining staff. Thus, new ideas and reorganization of the department will be critical."

- James H. Clem, National Credit Manager, Merchants Metals

We have "had to reduce staff and take on additional work. The company is willing to take more risks to increase sales, which are below last year's numbers. We're just doing the best we can do."

- Stephanie Grohs, Credit Manager, Stahls ID Direct

"I believe we will start to see an improvement in late 2009 and [it will take until] into mid 2010 before the economy is strong again. Through a change in business direction, the credit department staffing has been reduced along with the number of customers the company sells. Our goal is to keep close collection activity on the remaining customers and have complete financial information on them."

- Howard Nista, Director Corporate Credit, Clarion Corporation of America

Professional Leadership is Needed

"In one of the training [sessions] I have recently attended, I agree with my trainer when he said that the two basic root [causes that are] often disregarded [despite] the current global financial crunch we are experiencing, are management greed and mismanaged credit. We should 'professionalize' our credit process cycle and make the organization realize how 'critical' we are to its survival."

- Ruby L. Rosales, Manager -- Billing, Collection and Confirmation, Philipinas International Marketing, Inc.

"We have turned into psychologists, priests, and financial planners! Our customers are financially devastated and truly need to talk out their fears and frustrations. This is a truly sad time for all."

- Gayle Scarmardo

"Our credit policy has served us well over the years, in good times and in bad. The economy will throw us the curves, not the lack of credit structure. We are looking closer at every order, customer and process in hopes of taking the "right" risk...but, i like las vegas too, so...it is all a gamble no matter how good you 'think' you are."

- Judy Bennett, Vice President -- Credit, CCC Steel, Inc.

"I think most knowledgeable credit people understand the magnitude of the risk in the world currently. I think this should make us all follow our successful credit polices."

- Laura Frankos, VP, Legal & Credit, TDIndustries, Inc.

Back to Part 1 of Time for the tough to get going...