Question #1: How well does Z-score apply to the IT Industry? What are the best standard guidelines or industry standards that I can use most efficiently in measuring the creditworthiness of customers?
Answer from Michael Dennis: In my opinion simple or static formulas or models of any kind are unlikely to be the best way to predict the expected behavior of any debtor company in the short term or long term. Answer from Jerry@Marshall: Tough spot. I agree with Michael on all the scoring models, etc. Normally, though, my final decision is based on the good old credit reference from other vendors to the applicant.
Question #2: Does anyone have a set of collection procedures suitable for training a new collector?
Answer from Michael Dennis: Here are some of the collection procedures I would give (and have given) to collectors their first day on the job…
Answer from Jerry@Marshall: I'd just like to expand on a couple of Michael's very good points…
The quotes above are snippets of postings to the anscers Credit Community Bulletin Board, and a few visitors who frequent the Community have described the two above respondents as the Siskel and Ebert of credit. Their repartee is reminiscent of (although far more reverent than) the now famous “discussions” of movie reviewers Roger Ebert and the late Gene Siskel, whose humble beginnings in public television quickly launched them into the national spotlight and added “two thumbs up” to our popular culture. Befitting the modern era, the aforementioned credit professionals began their discussions not on television, but online at the anscers Community bulletin board. And while they may not be headed straight for popular culture, they have developed a loyal following among anscers Community members.
Community members know them as Michael Dennis (his real name) and Jerry@Marshall (Jerry Schwartz), and they are collectively responsible for nearly half of the 800 plus total posts to the Community board. They have been so active, in fact, that many casual visitors have come to expect fast responses from each megaposter. Fast, and comprehensive. Many of their responses to Community questions run in the hundreds of words, ranging in topics from selling to Indian casinos, to UCC’s, to priority vendors in Bankruptcy cases. One Community member even asked about standard payment terms for her customers in Tunisia. Michael and Jerry were right there with helpful information that could help her find the answer.
What made Siskel and Ebert’s relationship work so well was the professional respect that each had for the other. Michael attributes that same professional respect to the success of his and Jerry’s interactive dialogues. “There is an unspoken rule,” says Michael. “Sometimes we see things differently, but we express a difference of opinion or a different perspective rather than step on each other.” In fact, Jerry says, “Most of the time, Michael is right on.” Both credit professionals have been “chatting” back and forth since the Community opened in October 2001, but ironically, have never had the pleasure of meeting face to face.
What do these two guys do when they are not posting their professional knowledge and experiences to the Community? For those of you who only know Michael and Jerry through interactions in cyberspace, we thought it might be fun to get a glimpse of these two credit professionals in real life. Here are their stories told in their own words.
Michael Dennis fell into credit management right after graduating from college. “At the time, I was in the management training program for a large bank and realized that branch level employees didn't get paid enough to put up with the long hours, the risk of robbery, and the abuse from customers. I started my career with Earle Jorgensen Steel Company, moved to Orange County and accepted a position with American Hospital Supply Company and later with a division of Black and Decker. I then accepted another management position with a division of McKesson Corporation, and finally seven years ago I ended up working for Zomaya Group Inc. Along the way, I wrote three books on credit management, and was a contributing editor for two more books on the same subject. Somehow, my wife and I managed to raise two children - one is now in college and the other in graduate school, I managed to complete my M.B.A., and for the last 13 years I have worked part time for CMA as an instructor in the CAP and ACAP programs - and more recently as an instructor in CMA's on line Webinar distance learning program.”
Actually, Michael helped CMA launch its unique Webinar educational program, and has to date given over 50 live cyber presentations on topics such as Bulldog Collection Techniques, Financial Statement Analysis, Essentials of Credit Management, and Bankruptcy. Michael will be giving several presentations in person at the upcoming Western Region Credit Conference in Anaheim, including “Bulldog Collection Techniques” and “How to Market Your Credit Department to Upper Management” (for a complete list conference programs, go to the Western Region Credit Conference Web site
www.wrcc.biz). Michael also publishes a monthly newsletter and has written many articles on credit and collections topics which can be accessed at his Web site
www.coveringcredit.com.
Jerry Schwartz has been a CMA member for about 25 years, and before he got into credit management, he joined the Navy to avoid being drafted into the Army. “I figured in the Navy, I’d be safe. Wrong. In 1967 I shipped out on the U.S.S. Forestall, at that time the 4
th largest aircraft carrier in the world. July 27, we had a major fire off the coast of North Viet Nam. 29 aircraft were destroyed, 139 men died, and 9 holes were blown in the fight deck by exploding airplanes and bombs. Although I was listed as ‘missing and considered dead’ for about 10 hours, the only injury I suffered was a bruised knee.” However, on his second trip to Viet Nam, a swimming accident at Cam Rhan Bay, about 200 miles north of Saigon, landed him in the hospital with a broken neck. “The smack on the head that caused that, and the following time in various military hospitals as a quadriplegic, accounts for my current insanity, which accounts for my career in Credit. Nearly eight months later, I was able to walk out of the hospital and go home.”
In 1969, Jerry moved to the San Fernando Valley, where he worked as a D.J. at a Country/Western radio station in Lancaster, a T.V. repairman, then finally settled in with a consumer finance company where his wife was working, making consumer loans and learning about credit and collections. “It was while I was working for Vivitar Cameras in Santa Monica that Harry Fagan introduced me to CMA/NACM. Some of our ‘old-timers’ might remember Harry. He was very active and wrote numerous articles for the old monthly credit magazine that CMA published. For the last 3 years, I’ve been the first professional Credit Manager at Marshall Electronics. My wife and I live in Granada Hills with our two lovely girls, Neika, 11, and Natasha, 4. Occasionally, I can be found at a Karaoke club (usually no more than once a week).” By the way, his two lovely girls are pure-bred Siberian Huskies.
Michael and Jerry both say that they really enjoy sharing their experiences with others in the anscers Community. They have also learned a lot from the almost 400 (and growing) registered members who participate in the Community, and they encourage all credit professionals to join in their online discussions about this very specialized profession.
Registration with the anscers Community takes only a moment, and it’s free.
Click here to register.
To view some of classic posts from the past, click on the links below:
International Payment TermsFinding DSO by Industry Collection Procedures Setting Credit Policies Credit Evaluation Indian Casinos Chapter 11 Priority Vendor Corporate Guarantee
