NACM Oregon Business Credit Journal
In This Issue Documenting Unsecured Credit Sales ..................................... 1 Member Profile....................... 2 Chair’s Message...................... 4 President’s Message................ 4 NACM Certification Program..... 5 New Designee’s and Lifetime CCE ............................................. 5 Certification Success............... 6 Education............................... 8 Credit Learning Center............ 9 International Corner................ 10 NACM-Oregon Foundation....... 11 Kudos.................................... 12 Contacts................................. 19
Newsletter May/June 2013
The Importance of Documenting Unsecured Credit Sales from the Litigation Perspective David Mannion, Esq., Blakeley & Blakeley, LLP Selling goods on credit is inherently risky business. In essence, unsecured creditors are handing over their product and saying: “pay me later; I’ll take your word for it.” Indeed, the word “credit” is derived from the Latin “Credo,” meaning “I trust you.” Vulnerable as they may be though, unsecured creditors can still take certain simple steps that may go a long way towards mitigating the damage when they’ve trusted the wrong person. Apart from having a personal guaranty, maintaining proper documents is at the top of that list. I. Documents that should be maintained by Unsecured Creditors. The most important documents to maintain for every shipment of goods are invoices and proofs of delivery (for both the goods and the invoices). The proofs of delivery – whether they are bills of lading, FedEx tracking receipts, or something else – should be signed or acknowledged by a representative of the debtor. A bill of lading signed by a third-party carrier will not suffice. In addition, all invoices should be emailed to the debtor and read-receipts and delivery-receipts for those emails should be requested using the “options” function in Microsoft Outlook. Email receipts should be saved, together with the corresponding invoices and proofs of delivery. In fact, insofar as practicable, the vast majority of your communications with a debtor should be conducted through email. When dealing with a large corporate customer, always copy a director or senior manager on important emails. ...continue on page 15
Four Mistakes Credit Professionals Make When Getting More Involved in Exporting Effective practices in exporting involve much more than simply assessing the risk of new customers and slapping an international address on a shipping label or invoices. So much of your process with foreign customers has to be adapted, which
is often worth the trouble since more than 70% of the world’s buying power comes from outside of the United States. Knowing the culture through spending time there, reaching out to contacts in such new regions, and hiring local consultants can go a long ...continue on page 13
Page 1
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon Business Credit Journal
Newsletter May/June 2013
Member Profile Pendleton Woolen Mills
I
by Jake Faris
n the mid 19th century a weaver named Thomas Kay, who began his career at age nine near Leeds, England, was working in America and could see potential in Oregon’s ample wool and running water supply. In 1863, at age twenty-six Kay made the four-month trek to Oregon to open a woolen mill in Brownsville, just south of the new state capital. Kay mentored his eldest daughter, Fannie, in the business and in 1876 she married C.P. Bishop, a Salem retail merchant. The marriage of industry and retail quickly produced fruit. The state’s largest mill, employing fifty workers and state-of-the-art technology, was opened by the Bishops and Kays in Salem on March 13, 1890. The mill— now called the Mission Mill Museum—still stands today as a working piece of history. Across the state in Pendleton—prime wool
Page 2
ranching country—a wool scouring plant grew into Pendleton Woolen Mills, which famously produced “blankets” patterned after the local tribes’ beadwork and basket designs. Business was booming. By 1900, Pendleton blankets could be seen in Pullman rail cars, hotels, and even Klondike expeditions. In 1909, the Pendleton mill was going bust right along with the economy. The community approached the Bishops in Salem. Fannie and C.P.’s sons, Clarence, Roy, and Chauncey, carefully considered the option and decided the close proximity of the mill to wool producers would be a good business move. That same year the Bishops invested in a new mill in Pendleton and history was made. A strong thread woven throughout the Pendleton history has been the Kay/ Bishop’s family leadership. C.M. Bishop, Jr. (Mort) and Broughton Bishop (Brot)
7931 NE Halsey, Suite 200
Portland, Oregon 97213
C.M. Bishop III (Mort), President
became co-executives after their father, Clarence. John and Charles Bishop are currently company vice presidents, and Peter Bishop is manager of the Catalog/ Internet Division. Company President, C.M. Bishop III (Mort), began working at age five by opening his grandfather’s mail at the Portland headquarters. While Mort Bishop attended Cornell, he spent his summer breaks working for the company— including a “dream” job at Pendleton’s Disneyland store. After college he worked at department store retailers before returning as a merchandiser in
Tel 503.257.0802
Pendleton’s Women’s Wear Division. Mentoring the next generation is an ongoing Pendleton tradition. “My father was really a great mentor for me here,” says Bishop. “He’d call me Buck. ‘Buck, I had to work for my father, too. I know how it feels working for your father.’” Bishop became company President in 1999 and looks forward to a day when he will be working with his daughter, Elizabeth, and son, Mac (“CMBIV”). Mort’s nephew, E.K. MacColl III, is the first of the sixth generation at the company and leads the sales area in the Men’s Division. The company recently welcomed Mark Korros as Pendleton’s new CEO, and their first CEO from outside the Bishop family. Korros comes from Filson and has a background in apparel retail. “[Korros] brings a lot of new ideas,” says Bishop. “It will be exciting to see how some of these new ideas will come to fruition over then next few years.” With a footprint in Portland, Washougal, and Pendleton, the company
Fax 503.257.0247
continued on page 3
www.nacmoregon.org
NACM Oregon Business Credit Journal
Newsletter May/June 2013
Member Profile—Pendleton, continued from page 2 could be considered “local” yet their products have international appeal. Their famous Indian Blankets are both practical and yet each pattern is frameable (and sought after by both collectors and artists like Dale Chihuly). Their Portland store at 220 NW Broadway features the “home” line that the blankets inspired. Pendleton’s clothing line—which is sold both wholesale and directly to consumers—is featured at their Pendleton Shop at 4th & SW Salmon. To both celebrate their 150-year anniversary and to embrace the emerging contemporary style, Pendleton is releasing The Portland Collection. With each piece sewn in the United States, the collection is described as “a fresh perspective of iconic textiles as seen through the eyes of talented young creatives who call Portland home.” At the same time they are expanding into South Korea, Canada, and Europe, Bishop explains their priority is to keep it local. “It’s still very important to be close to the consumer. We do a lot of R&D right here in our home store.” Bishop likes to take advantage of the stores’ close proximity and regularly
Page 3
7931 NE Halsey, Suite 200
checks in with sales associates. “I like to find out what’s selling and why,” says Bishop. “Computer reports can tell you what is selling and not selling, but they can’t tell you why.” In many ways this 150-yearold Oregon company has come to represent many of the aspects that make Oregon itself unique. From locations at the mouth of the Willamette Valley to the foothills of the Blue Mountains, the company spans our state’s geography. Pendleton’s classic style—and its derivatives—appeal to both Northeast Portland “creatives” and Northeast Oregon ranchers alike. It is Pendleton’s focus on tradition and quality while simultaneously looking toward the potential of the future that represents our state’s best quality: our pioneering spirit.
2013 C redit C ongress & E xposition Join us at the Rio Hotel, Las Vegas, May 19-22, 2013, for the year’s largest gathering of business credit professionals in the country. It’s not too late to register!
d Jake Faris is a business technology consultant and sometimes-freelance writer who lives in the Portland area with his wife Charity and their two kids Harper and Xavier.
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon Business Credit Journal
Newsletter May/June 2013
Message from the Chairman
Message from the President
I am so very honored to
Spring has finally arrived! I
find it hard not to think of being outside, on the golf course, in the boat, at the ocean. I hope you too are enjoying it!
serve as your Chair on the Board of Directors for NACM Oregon this next year. Thank you all for your support and please if you have any questions or concerns you can email mjohnson@tectrucks.com and I will be sure and respond. Credit Congress takes place starting May 19 in Las Vegas. If you are attending, I hope to see you there. If not, you really need to get this on your “to do list.” Credit Congress is a great opportunity to learn and make connections. I have had the privilege to attend three previous Credit Congresses and I have gotten something out of each and every one. I am sure that this year will be just as valuable. We had a wonderful time at the annual meeting this year. Two excellent speakers were on the agenda, David Osburn and Kerry Tychuck. David Osburn lead a great class in “Negotiation Skills for the Credit Manager.” He made learning fun. I have had the pleasure of attending classes presented by Mr. Osburn previously and he does an excellent job. Our speaker at lunch, Kerry Tymchuk, Executive Director of the Oregon Historical Society was entertaining and very informative. It was a treat to hear from both these great speakers. Thanks to all of you who attended. Over the next few months, it is my hope to meet as many of you as possible and just say thank you for the support that you have shown NACM Oregon over the years. We are nothing without our membership.
If you haven’t already registered for the May 16 Career Planning 101, I urge you to do so today as space is limited. We are pleased to have Stacey Lane, a professional coach, present to NACM members. More information is included in this issue. The Credit Congress will be held in Las Vegas later this month. If you are attending, the NACM Oregon team looks forward to greeting you! If not, watch the BCJ for pictures and materials collected at the Expo and the education sessions. I hope you’ll think about putting this in your budget next year. As you may know, the NACM Oregon Foundation provides scholarship support for this event. More information is available on the NACM Oregon website. Have you used the 25 credit reports included in your membership? Need some help? Contact your Account Executive or Customer Service (971-230-1220), and one of the representatives will be glad to walk you through the process and the report. Best wishes for an enjoyable and prosperous 2013!
Rod Wheeland, CCE, CAE Direct: 971.230.1158 rwheeland@nacmoregon.org
Marsha Johnson, CCE TEC Equipment, Inc. mjohnson@tectrucks.com
Page 4
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon Business Credit Journal
Newsletter May/June 2013
NACM Certification Program If you are interested in pursuing a professional designation you should be aware of the designation registration and application fees.
Kathy Grimm, CCE
The registration fee, to open a file in your name, is $175—members; $275—nonmembers and is non-refundable. The application fees for each exam are as follows: Credit Business Associate (CBA) exam is $225—member; $325—nonmember. Credit Business Fellow (CBF) exam is $275—member; $425—nonmember. Certified Credit Executive (CCE) exam is $375—member; $525—nonmember. These fees cover each individual designation process. Should you fail to complete the process by not taking the exam within one year of your written approval, you will need to reapply. The application fee is not divisible; no part will be refunded should you not complete the process. To download the complete PDF Version of NACM’s Professional Certification Program brochure click here. The CBA, CBF, and CCE exams will be given at your local Affiliated Association office on the dates listed below: Exam Date: May 19, 2013 Credit Congress, Las Vegas, NV Exam Date: July 29, 2013 Deadline: June 3, 2013 Exam Date: November 4, 2013
Lifetime Certified Credit Executive
Recertification Congratulations are in order for Yvonne Prinslow, Hampton Lumber Sales, who was recertified for her CCE designation.
Congratulations to Kathy Grimm, Pacific Machinery & Tool Steel Co., in becoming a Lifetime Certified Credit Executive. Those of us who hold the CCE designation recognize the significant effort in time and funding that is required to retain certification. Now, Kathy is able to successfully avoid submitting a form and paying fees every three years! Again, congratulations on earning your Lifetime CCE designation.
CBA Also, congratulations to Ryan James, Euler Hermes, who successfully completed the CBA exam.
CICP And, congratulations to Mark Teeter, Esco Corporation, recent recipient of the CICP designation. NACM Oregon recognizes their accomplishments and applauds their success.
Deadline: September 9, 2013
Page 5
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon Business Credit Journal
Newsletter May/June 2013
Key to Success by Jake Faris
In 1913, a local entrepreneur named Charles “C.F.” Swigert founded Electric Steel Foundry in Northwest Portland at 24th Ave and Vaughn St. Swigert was not a stranger to industrial startups. The Morrison, Burnside, Ross Island, Oregon City, and St. Johns bridges were some of the spans Swigert was responsible for while working for the Pacific Bridge Company in the late 19th century. His experience with infrastructure led him to found a trolley company that connected Portland’s northeast neighborhoods. The trolley company inspired Swigert to finance a steel and bronze company to make trolley parts. By the time Electric Steel opened its doors, Swigert had sold his interests in earlier endeavors and was concentrating on making his new company a success. A key piece of that success was provided by an imported electrical melting furnace— the first in use west of the Mississippi—that was more efficient than traditional coke or coal furnaces. In thirteen years, Electric Steel went from a “job shop”—where they produced limited runs of steel parts— to a factory that manufactured their own patented products. Concentrating
Page 6
7931 NE Halsey, Suite 200
on the local logging industry, the company’s first proprietary product was the Baron’s chocker hook. This became a standard for the industry. Now using the ESCO trademark, Swigert’s company began pouring a new steel alloy better suited for high-impact applications. With the new alloy the company successfully expanded into the earthmoving industry, where it has been a market leader ever since. A century after ESCO’s founding the company’s network of twenty-seven manufacturing facilities spans twenty-eight countries across the globe. Yet ESCO still calls its original
Portland, Oregon 97213
Tel 503.257.0802
location in Portland, Oregon, home. Philip Angelechio is one of the nearly 5,000 employees and ESCO’s Corporate Credit Manager. Though he now holds both CCE and ICCE credentials, as he puts it, “I don’t know anyone who ever planned on working in credit.” In fact, in the 1980s when Angelechio enlisted in the US Marine Corps he was pursuing a very different career path. That career ended with an injury and an honorable discharge on September 12th, 1989. Starting over was hard. As Angelechio recalls, “Not all of my skills translated to the private ...continue on page 7
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon Business Credit Journal
Newsletter May/June 2013
Key to Success, continued from page 6 sector.” So Angelechio took advantage of the educational opportunities for veterans. He started taking classes at PCC with a degree in Finance Law as his final objective. Along the way he took a basic credit course, which changed everything. Angelechio, who describes himself as “a control freak who enjoys engaging in extreme problem solving”— both traits he picked up in the Marines—discovered he enjoyed the class work. The two instructors, Marjorie Dyrnes and Elese Claussen, were both Certified Credit Executives and must have seen potential in Philip. After the course wrapped up he was offered a job at their company, CrediTemps. As his experience with credit grew he took more NACM classes in and out of college. He graduated from Warner Pacific with a Bachelor of Science in Business and by 1991 had his first “Credit Manager” title. But it was just the beginning. Two job offers followed Angelechio’s CBA certification in 1996. The corresponding bump in
Page 7
salary got his attention. In 1998, he began substituting for Dyrnes and Claussen at PCC. During NACM’s 2001 Credit Congress Philip sat for his CCE and…passed! “It changed everything,” says Angelechio. “One: I noticed more respect from folks in the credit industry. Two: salaries have increased because companies are learning to appreciate our skills.” He continues, “Credit management was once considered a profession, then it was considered only a necessity, but now it’s being considered a profession again.” At thirty-four, Angelechio became the youngest corporate credit manager at Oregon Steel Mills. “I wouldn’t have got through the door without accreditation,” he says. After working at Oregon Steel for ten years, Philip was looking for a position that he could put his International Certified Credit Executive credentials to work. ESCO was looking for just such an individual. When Angelechio joined ESCO a year and a half ago no one on his team was certified. One of his team
7931 NE Halsey, Suite 200
Portland, Oregon 97213
has recently passed the CICP exam. Another hopes to sit for their CBA later this year. As a leader Philip can now see that there is more to holding an NACM credential. “Along the way I found out I really like teaching others,” says Angelechio. “You realize that you have something to share back to people that are where you used to be. That’s incredibly rewarding and probably the most enjoyable aspect of accreditation.”
help.” “A lot of what we do is based off of history: the history of money, companies, and industry,” he says. “There are certain things that never change when you’re learning about credit, but a lot of it changes constantly. You have to adapt. You have a benefit to give other people when you teach them what you learned.”
The willingness to share, teach, and serve the next generation of credit professionals is a trait he’s noticed before. “Every CCE I’ve talked to is willing to share,” Angelechio says. “If you’re an expert on what you do, why wouldn’t you want your legacy to be that you helped others get a leg up on their career?”
Jake Faris is a business technology consultant and sometimes-freelance writer who lives in the Portland area with his wife Charity and their two kids Harper and Xavier.
When another CCE shares an experience “I listen very close,” he says. “There’s no question that a CCE I’ve talked to has had an experience that I haven’t had.” And Angelechio has noticed a complementary trend. “People who are learning to go to CCEs for
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
Upcoming Events Career Planning Session—Thursday, May 16, 2013, 7:30-8:30 a.m., NACM Oregon Classroom
** Registration for this Complimentary session is limited to the first 24 applicants. ** Career planning isn’t something you SHOULD do, its something you MUST do. How
do you know when its time to move up, move around, or move out professionally? No matter where you are career-wise, there are a few simple steps you can take now that will help you take control of your career. Join us for breakfast and discover what will help you stand out, get noticed, and help you advance your career. Facilitated by Stacey Lane, a certified career coach and personal brand strategist, this session will open the door to discovering, communicating, and marketing your personal brand.
Stacey’s clients describe her as supportive, savvy, authentic, enterprising, connected, and fun. She works with people who want to find success with ease. For the fortunate few who know what they want to do but aren’t sure how or where to start, she partners with them to create and implement a plan. But mostly, Stacey works with individuals who are struggling to figure out what they should do, or are frustrated with their career direction (or lack of it!). Stacey’s private practice is based in Portland, Oregon, and her clients live in all parts of the country. She received her professional coaching
certification in 2003 through the Coaches’ Training Institute in San Rafael, California. Stacey has been a featured speaker for a number of professional organizations on careerrelated topics. For career planning tips, visit www.staceylane.net/blog. .1 CEU To register, contact Shawna Kelly at 971.230.1202 or skelly@nacmoregon.org or go to www.nacmoregon.org/events.
Business Credit Principles—July 17 - September 17, 2013, 1-4:30 p.m., NACM Oregon Classroom Instructors: Rod Wheeland, CCE, CAE, President, NACM Oregon and Michael Bena, CCE
Course Objective: To provide the student with a comprehensive overview of the principles of business credit management.
Text: NACM, Principles of Business Credit (6th Edition, 2009)
Outcomes: Upon successful completion of this course, the student will understand the role of credit in the economy and in the financial management of the company, effective trade credit policies and procedures, the legal environment of credit, terms of sale, negotiable instruments, the Uniform Commercial Code, the credit application, credit investigations and resources, credit enhancements, credit decisioning, resolving disputes and deductions, collection programs, out-of-court settlements, and bankruptcy.
Fee: $295—members, does not include text. $495—nonmembers, does not include text. Scholarships: May be available through the NACM-Oregon Foundation or your CFDD chapter. Register: contact Shawna Kelly at 971.230.1202 or skelly@nacmoregon.org or go to www.nacmoregon.org/events.
Financial Statement Analysis I—October 1 - December 3, 2013, 1-4:30 p.m., NACM Oregon Classroom Course Objective: An introductory course in financial analysis, this class provides the student with an overview of the basic financial statements, quality issues in using these reports, and analysis of these statements for the purpose of making trade credit decisions.
Instructors: Rod Wheeland, CCE, CAE, President, NACM Oregon and Michael Bena, CCE
Outcomes: Upon successful completion of this course, the student will understand the audit process, the basic financial statements, the audit letter and footnotes, various techniques used in analysis of the financial statements, including common-sizing, ratios addressing liquidity, operational performance, and leverage, and cash flow analysis, and the use of these techniques in credit decisioning.
Fee: $295—members, does not include text. $495—nonmembers, does not include text.
Text: Lyn M. Fraser and Aileen Ormiston, Understanding Financial Statements, 9th Edition, Prentice-Hall Publishing Company, 2010
Scholarships: May be available through the NACM-Oregon Foundation or your CFDD chapter. Register: contact Shawna Kelly at 971.230.1202 or skelly@nacmoregon.org or go to www.nacmoregon.org/events.
Special Offer for Facebookers and Tweeters! One complimentary registration will be provided at every NACM Oregon member activity, including all classes, for an individual who will memorialize these events with live tweets and Facebook posts. To apply for this special opportunity, please email rwheeland@nacmoregon.org.
Page 8
NACM Oregon Business Credit Journal
The NACM Credit Learning Center (CLC) is an online learning venue, created to bring 24/7 access to educational sessions for today’s busy business credit professional. What is the NACM Credit Learning Center? The Credit Learning Center brings targeted, quality education to your desktop from the name and brand you’ve trusted for more than a century - NACM. Carefully selected, expert instructors present 60-minute audio/visual presentations on a wide array of topics. You choose what learning module you want to take, and when, and view it on your computer at your convenience. You may also work toward completion of a course or specialty certificate. The Learning Center will continue to expand as more modules are created and added. How Do I Make a Purchase? The purchaser and the learner should be the same person - modules are purchased by, and sold to, individuals. The purchaser’s name must correspond to the user’s name. Companies wishing to purchase modules on behalf of multiple users should coordinate its purchase through the NACM Education Department. You can purchase a module today, and view it at any time – as your schedule permits. To learn more about the Credit Learning Center please visit http://www. nacm.org/credit-learning-center.html and click on the links.
Page 9
7931 NE Halsey, Suite 200
Newsletter May/June 2013
n r ing a e L Ce t i d nt e r e C r
Upcoming Webinars and Teleconference Education webinars are $69.95 for individual modules. Your purchase allows you two viewings of the presentation. (W) = Webinar; (T) = Teleconference Defending Preference Claims
June 10 3-4:30 p.m. (T/90 Min. -ET) Financial Statements, Trends, Payment Terms and Red Flags in International Credit Risk June 12 11 a.m-Noon (T/W 60 Min. - ET) Combating Money Laundering: How Well Are You Managing Your Company’s Risk? June 13 10-11 a.m. (T/W 60 Min. - ET)
Financing International Sales utilizing Forfaiting June 18 10-11 a.m. (T/W 60 Min. - ET) Credit Liquidity Solutions: Receivable Put Overview & Expansion June 19 10-11 a.m. (T/W 60 Min. - ET) Best Practice: Collection Techniques in the U.S. July 19 10-11 a.m. (T/W 60 Min. - ET)
Don’t forget to take advantage of your two complimentary webinars which is included in your Full Membership Package. To view the Event Calendar go to http://www.nacm.org/event-calendar.html.
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon Business Credit Journal
Newsletter May/June 2013
International Corner, by Alice Knight, RGCP Most of us are well-versed in
financial statement analysis and the various ratios that are used to evaluate the financial strength of a company. Many years ago, my college statistics professor announced “you can prove anything with statistics!” He went on to emphasize the importance of knowing what the numbers actually represent. This is still true today and especially true in international business. Many times we take numbers at face value which sometimes results in unpleasant surprises. “Know your customer” is especially important in the world of international trade where you are dealing in a different legal and cultural environment. In my experience the best way to “know your customer” is through personal visits. Once a relationship has been established much can be accomplished via phone or email but that initial contact is critical. During a customer visit is the perfect time to investigate what the numbers really represent. Here are a few questions to consider. Accounts Receivable How many active accounts do they have? What is the average sale value? What are the normal terms? What is the customer concentration? (1-5 customers equal more than 70%?) Do they have government accounts? (In some countries this is good, in others this is a challenge) Are they domestic or export? If export to what countries?
Page 10
7931 NE Halsey, Suite 200
Are there I/C or Related Party receivables? What is the general aging of receivables? Often answers to one question will lead to other related questions. Several customers in Latin America routinely send me quarterly or semi-annual updates that include detailed schedules of A/R and A/P. For them it is a simple dump of their file, for me it is a treasure trove of information. Inventory What is the average inventory turn? What are the components? What is the normal cycle time from raw material-WIP-finished goods-sale? Are finished goods customer specific or generally industry usable? What is the average time between order and receipt of goods? How are damaged goods recorded? How are returned goods recorded? I once visited a plant where inventory had been growing. They insisted that they were gearing up for a big order. While walking through the warehouse, I noticed a large area with printed boxes on skids seemingly ready to ship. I casually asked a warehousemen when they were scheduled to ship and he immediately said “No, these are returns from a large cancelled order.” Further inquiries revealed that they had been put back into inventory at their original value. Since they were already printed for a specific customer the actual value was scrap value. Walking through a warehouse is also a great way to see who your competitors are!
Portland, Oregon 97213
Tel 503.257.0802
Special Items Does the company have any special government tax breaks or incentives? If so, what is the effective time span? Ask about I/C and Related Party transactions of all kinds. Ask about dividends paid or payable. If they are part of a Group or Related Parties get a clear understanding of the relationships, where the assets actually are and who controls them. The more you understand what the numbers represent the easier it is to realistically evaluate the credit risk. It also pin points outside events that could potentially affect your customer. Numbers can be fascinating and frustrating. The more you understand them the more effective you will be.
Alice Knight is Vice President of Finance & Administration for Paper Products Marketing, Inc. Ms. Knight has more than 48 years' of experience in International Finance and is an active member of ICTF and NACM. She has served as Co-chair, Panel Member, and Presenter at Annual Global Conferences, and as President of ICTF Forest Products Group.
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon Business Credit Journal
Newsletter May/June 2013
NACM-Oregon Foundation Scholarships The NACM-Oregon Foundation grants scholarships to credit professionals for continuing education, professional designations, and conference expenses. To apply for scholarship funds, or for more information, contact Lourdes (Lou) Rice, NOF Scholarship Committee Chair, Pacific Metal Company at 503.454.1051 or lrice@pacificmetal.com. The categories are as follows. CFDD National Conference— September 19-20, 2013, Albuquerque Marriott, Albuquerque, New Mexico Four (4), $500 scholarships. Deadline: July 31, 2013 Phylliss Clark Scholarships Two (2), $500 scholarships. Applicants must be a CFDD member of the respective chapter and a first-time attendee to the CFDD National Conference. Each CFDD Chapter—Portland and Salem/Albany is allowed one scholarship funding. Deadline: July 31, 2013 Phylliss Clark Memorial Fund The Phylliss Clark Memorial Fund was established in honor of the well-known and respected manager of the NACM Oregon education/communications department, who died in an auto accident Memorial Day weekend in 1993. Because of Phylliss Clark’s strong interest in and commitment to education, and her dedicated service to NACM and CFDD, it was determined that a fitting memorial would be to establish an endowment in her name, the earnings of which would be used to promote education of deserving credit professionals. Each year, earnings from the endowment are distributed as scholarships to selected members of the two Oregon-area Credit & Financial Development Division (CFDD) chapters to offset registration and attendance costs to the CFDD National Conference. In selecting these yearly scholarship recipients, special recognition is given to first-time attendees of the conference. Professional Certification Fees To establish your file with NACM National; reimbursement of exams fees after a passing grade; recertifications (NOF pays for 50% of the fee)—$1,000 total; and
Submit applications to: Lourdes (Lou) A. Rice NOF Scholarship Chair Pacific Metal Co. 10700 SW Manhasset Dr. Tualatin, Oregon 97062 p: 503.454.1051
503.454.1065
$1,000 total for seminars and classes related to certifications. Western Regional Conference October 16-18, 2013, Golden Nugget Resort & Casino, Las Vegas, Nevada Four (4), $500 scholarships
lrice@pacificmetal.com
Deadline: August 31, 2013 To apply— To apply for scholarship funds, or for more information, contact Lourdes (Lou) Rice, NOF Scholarship Committee Board Director, Pacific Metal Company at 503.454.1051 or lrice@pacificmetal.com.
Page 11
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon Business Credit Journal
Newsletter May/June 2013
Port of Portland Wins Award The Environmental Protection Agency has bestowed best practices honors on several Oregon companies, agencies, and institutions.
Kendall Sun Kendall formerly Customer Services Representative, has been promoted to the Account Executive position servicing east Portland as well as the Salem, Eugene, Roseburg, Medford, and central Oregon territories. Congratulations on your promotion, Kendall. I’m sure members will enjoy working with you.
Frank Bernard
Page 12
Congratulations to NACM Oregon member firm, The Port of Portland, who captured honors in the “Top Local Governments” division. Portland is currently generating nearly 14 million kWh of clean renewable power through on-site solar, biogas, micro wind, and micro hydro resources. The awards were issued as part of EPA’s Green Power Partnership, through which 1,400-plus organizations buy more than 27 billion kWh of green power annually. That’s enough to mitigate carbon emitted by the electricity use of more than 2.8 million homes.
In May, Frank will celebrate 10 years at NACM. As NACM Oregon’s Help Desk and Systems Administrator, Frank supports the office electronics and its software applications from selection and acquisition to installation of updates, securing, maintaining, explaining how to use efficiently, and he liaisons with programmers.
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon Business Credit Journal
Newsletter May/June 2013
Four Mistakes, continued from page 1 way toward ensuring success instead of a costly learning curve in such a new venture. 1. Time is Important to Them, Too Part of bolstering a new business relationship with an international customer is the practice of sometimes, if not often, doing business on their time. While inconvenient for your staff, making sure your business is available during their normal day is a sacrifice that must be made from time to time. This may require waking at odd hours, or having different people in different places ready to do the same jobs for larger businesses. But one can’t realistically expect them to wait around at the office until 8-10 p.m. for you to wake up in the United States, right? This is especially so if you need their business more than they need your product or service. 2. Frequent Flyer Spending time in places of important growth opportunity is a practice that can go a long way, so long as the margins say it’s worth it. In some areas of the world, it’s really the only way to land a big new customer from far away. There are areas of massive financial potential where phone and email are just not enough, especially when trying to raise the level of trust or when trying to collect payment that might be past due. Spending time in the region is a must for places like the Middle East and Africa.
Page 13
7931 NE Halsey, Suite 200
3. Get to Know the Culture Knowing cultural protocols also is critical: what is considered polite, rude, overly deferential, pushy, and so on go a long way toward establishing a business relationship that is fair to both parties. Often, bringing on consultants that are expats, or even still on the ground in said new area, can be helpful to accelerate that learning curve. Remember, you can’t get back early impressions, and a massive faux pas, even if accidental, isn’t going to help get that sale or collect that debt your business may desperate need. 4. Don’t Be a Sucker It’s another category where it helps to have consultants from or very familiar with the area. Lack of knowledge can lead to abuses, as many businessmen and even government officials can pounce when they sense behavior that is far too deferential. This is particularly notable in parts of Asia and even more so in the Middle East, where western business people often struggle with establishing such a balance and cultural knowledge. Again, this can especially be the case with people linked to governments or regimes. One attorney, as a past FCIB speaker, noted that a number of collectors are confused by the extremely slow-payment habits despite doing business directly with an official or prince. It’s a reoccurring story, and underlines that
Portland, Oregon 97213
Tel 503.257.0802
one can’t overestimate the importance of researching a track record. Track record is almost always much more important than a fancy title. We are here to help you succeed. For more exporting resources available to you, contact NACM Oregon, and be sure to regularly check the educational offerings and resources available through the Finance, Credit and International Business Association (FCIB) at www.fcibglobal.com. Rewritten with permission from NACM National.
Fax 503.257.0247
www.nacmoregon.org
Newsletter
NACM Oregon Business Credit Journal
May/June 2013
American Express Now Accepted NACM Oregon is happy to announce that we now accept American Express credit card payments for payment on our invoices. This is for invoice payments only. We still do not accept American Express for collections claim payments.
© New Yorker Cartoon. Leo Cullum from cartoonbank.com. All Rights Reserved.
CRF News The First Quarter 2013 Edition of the CRF News is available. Inside you will find several timely articles on telecommuting (or working from home), including the results of a recent comprehensive CRF Survey. Other article topics include: • Collection Alternatives • Credit Terms and Antitrust • International Credit Information Sources • Transferring Efforts into Dollars through Collection Productivity To download a pdf version of the CRF News click on this link: http://www.crfonline.org/publications/news.pdf.
Page 14
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon Business Credit Journal
Newsletter May/June 2013
Documenting Unsecured Credit Sales, continued from page 1 The importance of properly documenting credit sales cannot be overstated. This is true in a whole host of litigation scenarios including, for example, the defense of preference actions. However, this article focuses on the prosecution of the garden variety collection lawsuit.
However, regardless of jurisdiction, there is a general attitude that “[s]ummary judgment is a drastic remedy to be used sparingly[.]”2 Thus, “[t]he party who moves for summary judgment has the difficult burden of showing that there is an absence of a genuine issue as to any material fact.”3
II. Pre-Discovery Summary Judgment: What it is, and why you want it in Every Collection Case.
According to the Supreme Court, “at the summary judgment stage the judge’s function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.”4 Federal Courts in New York and elsewhere “resolve all ambiguities, and credit all factual inferences that could rationally be drawn, in favor of the party opposing summary judgment,”5 in this case the debtor.
“Discovery” is the process of obtaining information from the other side in preparation for trial. It can include serving requests for documents, subpoenas, written interrogatories, and depositions.1 Apart from trial, the discovery process in general, and depositions in particular, is the most expensive aspect of litigation. However, where a creditor has properly documented their transactions there may be a shortcut to a final judgment that sidesteps most or all of the discovery process. That shortcut is called “summary judgment.” In Federal Court, summary judgment is governed by Rule 56 of the Federal Rules of Civil Procedure, and similar procedural mechanisms exist in most states. Basically, summary judgment is granted when the evidence is so clear there’s just no point having a trial.
Unless a creditor has kept its documentary ducks in a row, a debtor will frequently be able to conjure the purported “issue of fact” needed to defeat a summary judgment motion. Upon losing summary judgment, a creditor generally has no choice but to settle from a position of relative weakness, or proceed with the costly process of discovery and/or trial.6
1. For a more detailed introduction to the discovery process, consult the article of Johnny White, Esq. Published in Cedit Today. Http://www.Credittoday.Net/ public/compelling_discoveries_a_ primer_in_pretrial_procedure_for_ the_credit_professional.Cfm 2. Tubacex, Inc. V. M/V Capetan Georgis II, 1986 U.S. Dist. Lexis 27127, *1 (S.D.N.Y. 1986) (Citing United States v. Bosurgi, 530 F.2D 1105, 1110 (2d Cir. 1976)). 3. ID.
4. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (U.S. 1986).
5. Cifra v. Gen. Elec. Co., 252 F.3d 205, 216 (2d Cir. 2001) (Citations omitted). 6. It should be noted that where a creditor is suing someone other than its customer, such as the customer’s shareholders or the transferee of a fraudulent conveyance, intensive discovery will be unavoidable. Prosecuting those types of actions is beyond the scope of this article.
III. The Breach of Contract Claim and its Shortcomings when it comes to Summary Judgment. In order to recover a debt through litigation, the unsecured trade creditor ...continue on page 16
Page 15
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon Business Credit Journal
Newsletter May/June 2013
Documenting Unsecured Credit Sales, continued from page 15
7. Harsco Corp. V. Segui, 91 F.3d 337, 348 (2d Cir. 1996).
8. The UCC may also provide a creditor with protections in this scenario. For example, UCC § 2-602(1) requires that goods must be rejected “within a reasonable time after their delivery[.]” If, having had a reasonable opportunity to inspect the goods, the buyer fails to reject them in accordance with UCC § 2-602(1), they are deemed to have been accepted under UCC § 2-606(1) (b). According to UCC § 2-607(1), the effect of acceptance is that the buyer must pay the contract rate for the goods.
will normally be suing for “breach of contact.” To get summary judgment on a breach of contract claim, a creditor must show there is no genuine issue for trial concerning “(1) the existence of an agreement, (2) adequate performance of the contract by the [creditor], (3) breach of contract by the defendant, and (4) damages.”7 Creditors will normally have no problem with the first, third, and fourth requirements. It’s the second requirement that can turn what should be a simple collection action into a litigation nightmare involving protracted discovery and possibly even a trial. After being sued, even the most honorable debtor will, on the advice of counsel, assert that the unpaid goods were defective, delivered late, or that the creditor did not adequately perform the contract for some other reason. However, these claims are often belied by an extremely common fact pattern that occurs before many collection lawsuits are commenced. Especially in the context of a delinquent account, it is not unusual that unpaid shipments will have been delivered over a period of several months or more. By the time a lawsuit is commenced, several more months have usually passed. Typically, during that time period, you will have
Page 16
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
demanded payment and the debtor will simply have ignored you. This fact pattern can have immense legal significance if the creditor has been maintaining a proper documentary record.8 If you have taken the time to communicate with your debtor via email instead of phone – always being cognizant of the fact your emails may ultimately end up in front of a Judge – you may have compelling proof to offer in support of summary judgment. Indeed, any email communication, regardless of its content, can be used as proof that a creditor has adequately performed its contract. For example, it can be a game-changer at summary judgment if a creditor is able to swear in a declaration that: The goods for which the debtor failed to pay were shipped between January and June 2012. During that six-month period, I sent 40 emails to the debtor concerning various issues relating to the account. I received a total of 30 replies ranging from requests for extensions of payment dates, to details of the debtor’s planned vacation in Italy. Never once, throughout this entire time, did the debtor complain about the quantity or quality of the goods. ...continue on page 17
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon Business Credit Journal
Newsletter May/June 2013
Documenting Unsecured Credit Sales, continued from page 16 Of course, the debtor can respond by claiming he complained about quality over the phone. However, it’s implausible that a debtor who genuinely received defective goods would have been responding to emails from a creditor with anything other than complaints at the time the allegedly defective goods were received.
case-law that lets them do whatever they intuitively wanted to do in the first place. Thus, a carefully documented debtor/creditor relationship may be the difference between a Judge awarding pre-discovery summary judgment, and a creditor having to shell out on legal fees to go forward with discovery, depositions, and possibly even a trial.
In the context of summary judgment, “[o]nce the moving party” – in this case the creditor – “meets its initial burden[,]…the burden shifts to the nonmoving party to demonstrate that there exist genuine issues of material fact.”9 “[M]ere conclusory allegations or denials…cannot by themselves create a genuine issue of material fact where none would otherwise exist.”10 Indeed, the debtor “must offer some hard evidence showing that its version of the events is not wholly fanciful.”11
IV. The “Account Stated” Claim and Its Importance for the Unsecured Trade Creditor
The burden these standards place on the debtor are in some tension with the Supreme Court’s admonition that “at the summary judgment stage the judge’s function is not himself to weigh the evidence…but to determine whether there is a genuine issue for trial.”12 How can a Judge characterize a debtor’s claims as “wholly fanciful” without, at least to some degree, weighing the evidence?
Apart from the standard breach of contract claim, there is another claim that may be used to great effect as a means to getting pre-discovery summary judgment. That claim is called “account stated,” and exists in one form or another in most states. The New York Court of Appeals has described an account stated claim as follows:
7931 NE Halsey, Suite 200
10. Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010). 11. Golden Pac. Bancorp v. FDIC, 375 F.3d 196, 200 (2d Cir. 2004) (Citation omitted); see also Nationscredit Commer. Corp. v. Matlock, 2000 U.S. Dist. Lexis 12211, *9 (S.D.N.Y. 2000) (“The nonmoving party…must set forth ‘concrete particulars’ showing that a trial is needed.”) (Quoting R.G. Group, Inc. v. Horn & Hardart Co., 751 F.2d 69, 77 (2d Cir. 1984)). 12. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (U.S. 1986).
“As a general rule, where an account is made up and rendered, he who receives it is bound to examine the same, or to procure someone to examine it for him. If he admits it to be correct it becomes a stated account, and is binding on both parties. If, instead of an express admission of the correctness of the account, the party receiving it keeps the same
However, facts win cases; not law. Most Judges will latch onto any
Page 17
9. Nationscredit Commer. Corp. V. Matlock, 2000 U.S. Dist. Lexis 12211, *9 (S.D.N.Y. 2000) (Citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-587 (U.S. 1986)).
...continue on page 18
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon Business Credit Journal
Newsletter May/June 2013
Documenting Unsecured Credit Sales, continued from page 17
13. Rodkinson v. Haecker, 248 N.Y. 480, 485 (1928) (underlining added). Under California law “[t] here are three essential elements of a claim for account stated: (1) previous transactions between the parties establishing the relationship of debtor and creditor; (2) an agreement between the parties, express or implied, on the amount due from the debtor to the creditor; (3) a promise by the debtor, express or implied, to pay the amount due. The key element in every context is agreement on the final balance due. In the usual situation, it comes about by the creditor rendering a statement of the account to the debtor. If the debtor fails to object to the statement within a reasonable time, the law implies his agreement that the account is correct as rendered.” Starnet Int’l AMC Inc. v. Kafash, 2011 U.S. Dist. LEXIS 25062, *3031 (N.D. Cal. 2011) (applying Californian law, citations and quotations omitted, underlining added). 14. CF. Neuman Distributors, Inc. v. Falak Pharmacy Corp., 289 A.D.2d 310, 311 (2d Dep=t 2001) (holding that summary judgment on claim for account stated was proper where “the plaintiff presented, inter alia, itemized invoices, credit memos, and corresponding signed delivery receipts for the merchandise previously delivered.”)
Page 18
7931 NE Halsey, Suite 200
by him and makes no objection within a reasonable time, his silence will be construed into an acquiescence in its justness, and he will be bound by it as if it were a stated account. An account stated is conclusive upon the parties, unless fraud, mistake, or other equitable considerations are shown, which make it improper to be enforced.”13 The beauty of the account stated claim is that, unlike a breach of contract claim, the creditor doesn’t have to prove that it adequately performed the contract. Instead, it just has to prove that the debtor received its invoices and didn’t object within a reasonable time.14 Unfortunately, many creditors are unable to avail themselves of an account stated claim for the simple reason that they can’t definitively establish that the debtor “received” their invoices. This situation could easily be avoided by emailing invoices to debtors and requesting read-receipts for the emails. In addition, where possible, officers of debtors should be copied on these emails or copies of invoices should be mailed to the debtor’s officers by certified mail with a return receipt requested or by FedEx with a signature required.
to avoid the inevitable defective product allegations that are asserted in response to a breach of contract claim, and obtain pre-discovery summary judgment on their account stated claim instead. Conclusion Prudent credit professionals should maintain a checklist for each customer account indicating whether invoices have been mailed and emailed, whether read-receipts and certified mailing receipts have been received, and whether signed proofs of delivery have been obtained. All these documents should be saved in PDF format so that they can be emailed to counsel on short notice. And where this procedure is not practicable, such as where a creditor ships a large number of separate orders, it should at least be followed for high value shipments or problem accounts. Comprehensive documentary records mean fewer triable issues of fact, and fewer triable issues of fact mean more collections and less litigation. Rewritten with permission. David joined Blakeley & Blakeley LLP, as an associate in 2011 and specializes in commercial and bankruptcy litigation. He can be reached at 212.984.1033 or dmannion@blakeleyllp.com.
If this is done, a creditor may be able
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon Business Credit Journal
Newsletter May/June 2013
Contacts NACM Oregon
Board of Directors Chairman Marsha Johnson, CCE TEC Equipment, Inc. mjohnson@tectrucks.com Vice Chair Pat Swope, CCE, CICP Pacific Seafood Co., Inc. pswope@pacseafood.com Secretary/Treasurer Linda Bishop, CCE, CICP Tektronix, Inc. linda.j.bishop@tek.com Counselor John Hardy Emerson Hardwood Co. jhardy@emersonhardwood.com
Directors Steve Amiel Tektronix, Inc. steven.amiel@tektronix.com Raeann Binau, ICCE, RGCP rae.binau@gmail.com Jacki Bloom, CBA Wright Business Graphics jbloom@wrightbg.com Will Campbell Standard Supply Co. willc@standardsupplyco.com Tony Ceniga Industrial Finishes & Systems t.ceniga@industrialfinishes.com Paula Cooley, CBA American Steel Corp. pcooley@american-steel.com Lori Jones, CCE ljdangermouse@gmail.com Scott Smithhisler US Bank Global Trade Service scott.smithhisler@usbank.com NACM National Director Rick Weisman, CCE Graybar Electric Co., Inc. rick.weisman@graybar.com President Rod Wheeland, CCE, CAE NACM Oregon rwheeland@nacmoregon.org
Page 19
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Customer Service/ Credit Reporting 971.230.1220 services@nacmoregon.org
Industry Groups Richard Browning, CGA 971.230.1188 rbrowning@nacmoregon.org
Data Contribution Shannon Abnal, CGA 971.230.1166 sabnal@nacmoregon.org
Kristen McBride, CGA 971.230.1176 kmcbride@nacmoregon.org
Member Services Kathy Linscott, CGA 971.230.1164 klinscott@nacmoregon Member Services Account Executives Clara Nemeth, CGA 971.230.1144 cnemeth@nacmoregon.org Kendall Sun 971.230.1178 ksun@nacmoregon.org National Account Executive Caroline Anderson, CGA 971.230.1168 canderson@nacmoregon.org
Collection Services Donna Gilmore 971.230.1206 dgilmore@nacmoregon.org Billing Marmie Carpenter 971.230.1146 mcarpenter@nacmoregon.org Meeting Room Rental Shawna Kelly 971.230.1202 skelly@nacmoregon.org Newsletter Editor Barbara Salazar 971.230.1182 bsalazar@nacmoregon.org
Education Shawna Kelly 971.230.1202 skelly@nacmoregon.org
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org