NEWSLETTER - Credit Institute of Canada

DECEMBER 2010 NEWSLETTER
THE CREDIT INSTITUTE OF CANADA – EDMONTON CHAPTER Box 49044, Strathcona Ind. RPO, Edmonton, AB T6E 6H4 Phone: 780‐944‐4645 A MESSAGE FROM THE PRESIDENT By Lynn Brown, CCP IN THIS ISSUE Presidents Message ……….......... Page 1 National Directors Report …..... Page 2 Treasurers Report ……………...… Page 3 Seminar Report ……………………. Page 4 CCP Challenge Exam …………….. Page 6 National Conference Info ……… Page 7 Membership & Student Coordinator Reports ……………………………….. Page 8 Marketing & Bylaws/Legislation Reports ……………………………… Page 10 Graduation Report ……………… Page 12 2009 Graduation Photos …….. Page 13 Awards Committee & Newsletter Report ……………………………….. Page 16 Managing Credit Article ……… Page 18 Year End Report …………………. Page 20 2010 Graduation Photos …..… Page 21 Welcome to our newly revamped edition of the Edmonton Chapter December 2010 Edition. It is hard to believe that Christmas is only a few days away and if you are like me, the shopping still needs to be done!! Since taking the role of the Chapter’s President, I am continually reminded of how awesome it is to be a part of the credit community. I am looking forward to going to the 2011 National Conference being held in Ottawa this coming June and I hope to see many of you there! This past year has been one of growth in our membership as well as our board. We have been busy with new Marketing efforts as well as preparing for some upcoming Seminars and Events for our members and the business community. With this in mind, we are planning our next seminar to be held March 25th, which is called “Civil Claims Made Easy”. Watch for more details to come but it will prove to be very informative and exciting! If you have your 2011 calendar, keep in mind that you are invited to our Annual General Meeting April 13th at the Edmonton Petroleum Club starting at 5:30 pm, our Annual Golf Tournament in conjunction with the Credit Association of Edmonton on May 27th at The Ranch Golf Course, starting at 2pm as well as a CIC event at Northlands for the horse races in September. These are all great events to meet others in the credit and business community. Our Fall schedule concluded with the Graduation & Award Ceremony being held at the Mayfield Inn on November 17th. Our Grads and Award winners were treated with a first class evening. Many thanks to our sponsors as your continued support make this all possible. Congratulations to our most recent CCP graduates who are Amanda Bodnar, Melanie Swain and Sherry LeNeve. We also congratulate Travis McBrayne, Jennifer Paclebm Carey Sorken and Elaine Kluchka for achieving their Credit Specialist Certificates. In closing, on behalf of the Edmonton Chapter Board of Directors, I wish you and your families a very Merry Christmas and look forward to your continued support and involvement in 2011. Providing education for credit and financial professionals since 1928 2010 BOARD OF DIRECTORS AND COMMITTEES President: BROWN, Lynn CCP [email protected] Past President: SMITH, Kathryn CCP [email protected] 1st Vice President: HOPKYNS, Dave ACI [email protected] Treasurer: VESTBY, Patricia CCP [email protected] Secretary: PERRY, Beth CCP bperry@flint‐energy.com National Director: SWEKLA, Dana CCP, B.COMM. CCP/ACI Review, Graduation [email protected] Awards/Seminars: SEDANI, Raj [email protected] By‐Laws & Legislation: SNIDERMAN, Howard LLB [email protected] Liaison/Golf: HOPKYNS, David ACI [email protected] Marketing/Publicity: LOHNER, Brad [email protected] Job Referrals: ORMAN, Jim ACI [email protected] Memberships/Seminars: BROGLY, Linda CCP [email protected] Social Events: WONG, Stephen [email protected] Student Coordinator: YAREMKO, Tracy CCP [email protected] Newsletter: KONEICKO, Krys CCP [email protected] CLICK THE PICTURE BELOW TO VIEW PATRICIA’S YOU TUBE DEBUT NATIONAL DIRECTORS REPORT
By Dana Swekla, CCP, B. Comm Our next National Board Meeting (conference call) will be held in Toronto January 20 & 21st of 2011. CIC Conference in Ottawa: June 15‐17, 2011 is gearing up. Justin Trudeau is the keynote speaker. Ads are included in the Program Books which have been sent to Chapters to hand out. Peter Finlay has implemented a task force to brainstorm and flesh out some key strategies for the future of the CIC, including a “knowledge centre” making the CIC the one‐stop‐shop for Credit related tools/info/reference material along with expanded education. Per our last NEC conference call (December 2nd) we have 20 students registered for our new CIC Credit Law course! There has been some interest in a “self study” component only (1 registered) and National Office is reviewing final price at which to sell the textbooks only (estimated to be $120‐$150). The MIS course development continues with involvement with Vince Davies (U of A) along with Nawshad’s help & review with the focus group made up of past students who excelled in the MIS course, and are now currently working in Credit Management capacities. The bulk of the course material is already in place. Follow up will focus on the course Assignments. Unfortunately, there has been little interest shown in the Challenge Exam offering. Several inquiries but no one has actually registered to write the exam. Merry Christmas! Providing education for credit and financial professionals since 1928 2 | P a g e 2010 GRADUATES­ NATIONAL POST HEADLINE The CIC Edmonton Chapter will be placing an advertisement in the National Post for our recent Graduates. Keep an eye out in news stands for the issue, or email Lynn for a copy: [email protected]
2010 AGM TREASURER’S REPORT
By Jim Orman, ACI I am pleased to present the preliminary financial statements for the year ending March 31, 2010. (These statements are internally prepared. The final statements will be published in the next issue of the Edmonton Chapter Newsletter) PROFIT/LOSS‐ The Chapter experienced a loss of $2,451.82 for the year ending March 31, 2010, compared to a profit of $3,094.83 for 2008/2009. INCOME‐ Income for 2009‐2010 decreased by approximately $13,986, in comparison with the 2008‐2009 year. Some of the significant differences are: a) Seminar income generated $5,518 less this year b) Income from the golf tournament is expressed as a net profit figure ($447) due to joint effort with the CAE. c) Marketing rebate from National office had not been received as of March 31, 2010. EXPENSES‐ Total expenses were $8,440 less than 2008‐2009. The following were some of the more significant differences from 2008‐2009. a) Seminar expenses were down by about $1,500 (Expenses for seminars are proportionate to the number of seminars, so that when Income increases, Expenses increase). b) Graduation Expense decreased by $1,326. c) Student Education decreased by $1,198. d) Marketing Expense decreased by $900. e) No golf expense‐ see above. The final Financial Statements should appear in the next newsletter. Providing education for credit and financial professionals since 1928 3 | P a g e 2010 AGM TREASURER’S REPORT … CONTINUED UPCOMING SEMINAR: FRIDAY, MARCH 25TH, 2011 “Small Claims Court‐ Made Easy” Watch for more information coming soon! 2010 APR SEMINAR REPORT By Lynn Brown, CCP 2011 AGM: WEDNESDAY, APRIL 13TH, 2011 EDMONTON PETROLEUM CLUB 11110‐ 108 STREET NW, EDMONTON, AB T5G 2T2 5:30 ‐ 7:00 PM (APPETIZERS SERVED) This year has been a slow year for Seminars, in early 2009 we put on a Credit Basic’s seminar in conjunction with the Alberta Construction Association for their members. We had approximately 26 people attend and all were not members of the Credit Institute of Canada. The feedback from the survey the ACA submitted was very positive and they advised that they would be interested in doing another seminar for their members in the future. With this “joint venture” we will be approaching other associations to see if there would be some interest in providing seminar topics to their members solely to try and reach out to companies and individuals that may not be aware of the CIC and what we can provide them with regards to education and membership. We are working closely with our Marketing committee to look for different ways to reach the community as well as topics of interest. Again, we are always open to suggestions from our membership, only you can tell us what you want to see! Providing education for credit and financial professionals since 1928 4 | P a g e METROPOLITAN CREDIT ADJUSTERS LTD
Metropolitan’s Niche in the Business World A leading provider of collection services, primarily focused on bad debt recovery on the basis of no collection – no charge. For fast effective recovery Call us today METROPOLITAN CREDIT ADJUSTERS LTD. David Hopkyns, ACI Phone: (780) 420‐2380 Email: [email protected] Providing education for credit and financial professionals since 1928 5 | P a g e CCP CHALLENGE EXAM New Opportunity for Senior Credit Professionals Financial management professionals with at least 15 years' experience in credit including 10 or more years in management are encouraged to take an equivalency examination in order to be recognized as a CCP­Certified Credit Professional. Being recognized as a Certified Credit Professional bestows prestige and rewards prestige and rewards upon recipients who find themselves in the upper echelon of financial management. If you've got the experience but not the designation, don't you owe it to yourself to test your knowledge and get the accreditation you deserve? Download Challenge Exam Registration Form online. Criteria for Writing the Challenge Exam •
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Min. 15 years working in credit and/or collections. Min. 10 years in a management role. Sponsored by a CCP who is in good standing or by the candidate's current employer who agrees to verify the candidate's job experience. Sponsors must be prepared to vouch for candidate's ethics and professional standards. Relevant post secondary education: successful completion of the equivalent CCP level courses in: Financial Accounting, Finance, and Canadian Business Law, offered by a recognized post secondary institution. (If taken outside Canada, a letter of equivalency from a registered Canadian body authorized to administer equivalencies should be provided). Knowledge Areas Assessed Section B (30%) pick 3 out of 5 questions:
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Financial Statement Analysis (30%) Bankruptcy and Insolvency / CCAA (10%) Legal Remedies (10%) PPSA (10%) Credit management/credit policy development (10%) •
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International Credit (10%) Construction Credit (10%) Leasing (10%) Piercing the corporate veil (10%) Credit Fraud/money laundering (10%) Four‐hour, closed book exam. Passing grade: 70%. Registration Fee: $550 + GST/HST, including study guide and sample exam. QUESTIONS? Contact us at [email protected] or 1‐888‐447‐3324. Scheduled Examination Date Monday November 22, 2010 Monday March 7, 2010 Please check back for updates on examination dates. Providing education for credit and financial professionals since 1928 6 | P a g e UPCOMING EVENTS SAVE THE DATE:
JUNE 14‐17, 2011
National Credit Conference
The CIC National Credit Conference is an excellent and cost effective opportunity to keep up to date with industry changes, best practices, and management skills that could save your company money and make you stand out as an expert in delivering profits through effective credit management. CCP and ACI members earn 50 Professional Development Points (PDP) for attending the full conference. To learn more or to register for the conference, please visit: http://www.creditedu.org/EVENTS/conference.htm
PRELIMINARY SCHEDULE: CONFERENCE HIGHLIGHTS
Opening Keynote Address by Justin Trudeau, MP
Since our conference this year takes place in the nation's capital; we thought it was only fitting that our opening keynote speaker be a national figure, someone all our members across the country can identify with. The combination of Trudeau's charisma and inspirational message leaves audiences educated, entertained and ready to make a difference for their country. What a great way to start a national conference! Updates on the Canadian Economy by Peter Hall, Vice­President and Chief Economist Export Development Canada (EDC) Peter Hall is responsible for overseeing economic and political risk analysis at EDC and the company's information centre. He has over 20 years of experience in domestic and international economic analysis and forecasting. Prior to joining EDC, Mr. Hall directed the economic forecasting activities of the Conference Board of Canada. Panel discussion and workshop Mr. Hall's address will be followed by a panel discussion and workshop on the topic: Economic Recovery — are we there yet? A panel of industry experts will be led by Doug Anderson, ACI, and President of Credit Risk Solutions. The workshop that follows will provide formal networking opportunities for participants in similar industries to share their strategies and best practices. Providing education for credit and financial professionals since 1928 7 | P a g e REPORTS MEMBERSHIP REPORT By Linda Brogly, CCP The Edmonton chapter had seven students enroll in the CCP program last year. So far there are two new students enrolled for 2010. Membership has averaged at 110 members for the year and we will be working closely with the Marketing committee to find ways to increase our membership for our chapter. Thank you, Linda Brogly, CCP Membership Chair STUDENT COORDINATOR REPORT BY: TRACY YAREMKO, CCP The Edmonton chapter had seven students enroll in the CCP program last year. So far there are two new students enrolled for 2010. Unfortunately, enrolment in the spring session of the CR1 course at NAIT was inadequate forcing the class to be cancelled. In 2009 I invigilated one exam at NAIT. Holly Stewart invigilated the rest at her office. National has updated the website for courses equivalencies/transfer credits. Now anyone can check courses at a variety of Educational Institutions across the country. National has also introduced online review sessions prior to exams. The review sessions are interactive (with audio) and lead by a qualified instructor. However, there must be a minimum amount of participants in order for the review session to go ahead. There is also a fee for each session. Thank you, Tracy Yaremko, CCP Student Coordinator Providing education for credit and financial professionals since 1928 8 | P a g e Providing education for credit and financial professionals since 1928 9 | P a g e MARKETING REPORT BY: BRAD LOHNER The Edmonton Chapter will be participating in teleconference marketing materials with National and other Chapters to better coordinate and share best practices. Other initiatives include: •
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Test and measure all advertising for best return on investment. Using a promo code to track each ad and source. Solicit Chapter members to provide testimonials as to what the CCP has done for them in their careers. Testimonials to be used on all marketing material and Chapter website. Work with the newsletter editor to get the newsletter online through Constant Contact. This way we can track email bounces, monitor articles of interest and do periodic surveys. Reached out to several professional associations. Educated them about the CIC with a view to letting their membership know about us and consider a CCP for professional development. Obtained the marketing functions/checklist for the 2013 conference. Develop a marketing manual and checklists for use by the subsequent volunteers to ensure consistency and shorten learning curves. More information will be available once the teleconference has been completed. BYLAWS & LEGISLATION REPORT BY: HOWARD SNIDERMAN, LLB It is my pleasure and honour to have been the chair the Bylaws & Legislation Committee for the chapter fiscal year, which commenced on April 1, 2009. The Committee is one of 7 Standing Committees of the chapter pursuant to the chapter Bylaws. As a lawyer (not a credit professional) I fall into the “Affiliate” membership category – one who is “interested in credit education; wishes to be a member of the chapter; and has paid the applicable fees”. Chapter Bylaws: I completed a review of the existing chapter Bylaws in 2006 and confirmed to the board that there were no concerns on my part that this time relative to errors or omissions in those Bylaws. I am informed that they are standard form Bylaws used in most (if not all) CIC chapters across the country. There were no proposals to change the chapter Bylaws during the past year nor is there any coming forward for review, discussion or vote at the AGM. Legislation: Bill C‐12 is Federal legislation entitled An Act to Amend the Bankruptcy & Insolvency Act. It was passed by Parliament and received Royal Assent on December 12, 2007. It adds a few amendments (i.e. Consumer proposals can be made for addregate debts up to $250,000 – the former limit was $75,000) in addition to Providing education for credit and financial professionals since 1928 10 | P a g e UPCOMING EVENT­ GOLF TOURNAMENT 2011 GOLF TOURNAMENT: FRIDAY, MAY 27TH, 2011 THE RANCH GOLF & COUNTRY CLUB 52516 RANGE ROAD 262, ACHESON, AB T7X 5A2 SHOTGUN START‐ 2:00 PM …..CONTINUED BYLAWS & LEGISLATION REPORT BY: HOWARD SNIDERMAN, LLB those contained in former Bill C‐55 (now C.47) which was passed by Parliament back in 2005 and which contains major changes to insolvency legislation (i.e. the Wage Earner Protection Program). Although both pieces of legislation had been passed by Parliament and given Royal Assent, only certain portions had in fact been proclaimed in force prior to this past year. Specifically, provisions relating to Student Loans and RRSP’s came into force along with the new Wage Earner Protection Program Act in July 2008. I assisted with a seminar for Credit Institute members in November, 2008 to outline effects of insolvency legislation reform and those new provisions that had been proclaimed in force. This past year, the balance of the reforms and amendments came into force upon their proclamation on September 18, 2009. Key among the new provisions are those relating to “Transfers at Undervalue”; Preferences; an expansion of the time to recover unpaid supplies sold to a bankrupt; rights of a Trustee to assign & disclaim contracts; and a wholesale number of changes to the way in which Companies Creditors Arrangements Act (CCAA) proceedings are to be conducted as well as changes to the rights and obligations of the debtor, creditors, and Monitor in the CCAA process. Providing education for credit and financial professionals since 1928 11 | P a g e It will be useful for the Credit Institute to hold another seminar for its members on these reforms and amendments in the coming year. This past year I also participated as an instructor in a seminar for the Credit Institute on “Credit Basics” jointly held with the Alberta Construction Association and another seminar on “Credit Basics” will be upcoming on April 21, 2010. It has been a pleasure to work with the CIC‐Edmonton Chapter Board and I look forward to continuing as chair of this committee in the coming year. Respectfully submitted, Howie Sniderman, Chairman – Standing Committee on Bylaws and Legislation SOCIAL EVENT: SEPTEMBER 2011 HORSE RACES FURTHER DETAILS TO BE POSTED SOON. GRADUATION REPORT By Dana Swekla, CCP, B. Comm Our 2009 Graduation, Awards & Alumni night was held on November 26th at the Mayfield Inn. We honored 2 CCP graduates, 1 Credit basic graduate, 1 Credit Specialist, and 1 Honorary Lifetime Member. In addition, we proudly gave out 6 Chapter awards and 2 National awards. The ceremony was followed by the musical presentation of “The Super Groovy 70’s” at the dinner theatre with 43 in attendance. This event is always a collaborative one but this year it was even more so as our Graduation Chair, Linda Taylor, found she unable to take charge due to illness. Linda still provided her guidance and solid direction and thank goodness is feeling well again. An extra thanks to all of you involved who helped bring this event together! Photos of this year’s graduates and award recipients, included in this newsletter, are courtesy of Gavin Graham. Thank you, Dana Swekla, CCP Providing education for credit and financial professionals since 1928 12 | P a g e EDMONTON CHAPTER EXECUTIVE AND BOARD MEMBERS 2009­2010 A WORD TO OUR AWARD SPONSORS Credit Institute of Canada – Edmonton Chapter would like to acknowledge the following Companies and Associations for their kind generosity. Their support of the Chapter Awards was a major contributor to the success of the Graduation Ceremony and is deeply appreciated. Credit Association of Edmonton Credit Institute of Canada Chapters Commercial Credit Adjusters D & B Canada Equifax Canada Metropolitan Credit Adjusters Ltd. Priority Credit Sterling Credit Western Forum of Credit & Financial Executives Association Providing education for credit and financial professionals since 1928 13 | P a g e EDMONTON CHAPTER GRADUATION 2009 MAYFIELD INN Highest Mark in Advanced Credit Management
Jian Ping Cai
Highest Mark in Law
Victoria Makaya
Highest Mark in Communication
Jeff Cleave
Sterling Credit Award
Jian Ping Cai
National Award – Advanced Credit Management
Jian Ping Cai
Providing education for credit and financial professionals since 1928 14 | P a g e EDMONTON CHAPTER GRADUATION 2009 MAYFIELD INN Presentation of Credit Basic Certificate
Amanda Reimer
Credit Specialist
Amanda Bodnar
Presentation of CCP Graduation Diploma
Accepted by Kathryn Smith on behalf of
Les D. Campbell, CCP
Presentation of CCP Graduate Diploma
Jian Ping Cai, CCP
Presentation of Lifetime (Honorary) Diploma
Janice M. Grant
Providing education for credit and financial professionals since 1928 15 | P a g e REPORTS AWARDS COMMITTEE REPORT
By Raj Sedani The vision of the Credit Institute of Canada is ‘to be professionals dedicated to excellence in Credit Management’. An integral part of this is to support and recognize outstanding academic achievements in the CCP program, the Certified Credit Professional. This past years Edmonton Chapter awards ceremony was an enthusiastic evening, held at the Mayfield Hotel & Dinner Theatre, on November 26, 2009. The recognition of the graduates, credit specialist, and award winners, is an important milestone of accomplishment in their career road to success. During this ceremony, we were pleased to recognize 2 Certified Credit Professionals, 1 Credit Specialist, 1 Credit Basic Award, 2 National Awards, 5 Awards in highest academic achievement, and 1 Lifetime (Honorary) Diploma to Janice M. Grant, CCP. In this regard, we wish to extend our sincere gratitude to the following sponsors for our awards and graduation festivities: NEWSLETTER BY: KRYS KONIECKO, CCP This last year has been challenging at getting the newsletter out to all our valued members. There was a change in editor midway through the year, which caused some unforeseen delays. However, I look forward to the 2010 editions. • Credit Association of Edmonton • Credit Institute of Canada Chapters • Commercial Credit Adjusters We have reformatted the newsletter using • D & B Canada National’s templates and I believe the new • Equifax Canada format is more exciting, informative, and fun. In • Metropolitan Credit Adjusters Ltd. addition, we’re looking at having four editions • Priority Credit (quarterly) rather than the previous three. • Sterling Credit We’re also considering e‐mailing our • Western Forum of Credit & Financial Executives newsletters to those members who have e‐mail, Association reserving print format for those who are not connected. We thank you for your support of our vision and goals, and look forward to your continuing endorsement of our We are always on the lookout for submissions aspirations. from our membership, so if you have an article, credit joke, or story you would like to share with your fellow chapter members, feel free to send Regards, your submission to my attention at Raj Sedani [email protected] or [email protected]. Chair, Awards Committee Providing education for credit and financial professionals since 1928 16 | P a g e MEMBER VALUES: Credit Institute of Canada members maintain a 360‐
degree perspective in protecting Canadian businesses in today’s changing global environment by providing the most value to our stakeholders. Our Members: ™ Uphold the highest ethical standards ™ Act with honesty and integrity ™ Demonstrate professionalism and trust ™ Maintain stability and discipline ™ Represent accountability and compliance ™ Provide foresight, resourcefulness, skill, and intuition ™ Embrace and encourage learning and continuous education …..CONTINUED NEWSLETTER BY: KRYS KONIECKO, CCP If you are looking to promote or expand your business, the CIC‐
Edmonton Chapter offers advertising space in our Newsletter. Current advertising costs are listed below. Full Page (inside front or last page) ……….. $300.00 Full Page ……………………………………………… $250.00 ½ Page ………………………………………………… $125.00 Business Card ………………………………………. $50.00 The 2010 Newsletters are expected to be released in the following months: April 2010, July 2010, October 2010, and January 2011. Krys Koniecko, CCP CIC‐ Edmonton Chapter Newsletters The Credit Association along with The Credit Institute of Canada, Edmonton Chapter had its 2nd combined Texas scramble golf tournament, which for the first time, was held in the afternoon, on Friday June 4th, 2010 at The Ranch Golf and Country Club. A great time was had by all, with the best weather, excellent golfing, amazing food, and of course, great prizes for everyone. Thank you again to all our sponsors, golf committee volunteers, and The Ranch Golf and Country Club! We look forward to next year’s combined tournament. David H. Hopkyns, ACI Chair Golf Committee Providing education for credit and financial professionals since 1928 17 | P a g e Managing Credit: Is your Credit Policy Profitable? Puru Grover, Manager, Business Education: Dun & Bradstreet Credit is an indispensable catalyst in
financing the movement of commerce. Its
roots go fairly deep in time and are
definitely as old as the concept of trade
itself. As early as 1300 BC the
Babylonians were lending on the basis of
getting a charge on security or collateral.
Credit touches us in various ways. To
some it could be a mere caress or a tickle,
to others it could be a brush, to some a
graze and for others a crash or a collision.
To demonstrate the importance of credit,
according to Industry Canada sources the
Small Business Loans Act (SBLA), a
program that serves start-up and smaller
firms, has succeeded in lending more than
$ 20 Billion to over 50,000 Small and
Medium sized Enterprises (SMEs) in Canada, since its inception in 1961. The loans have helped in creating
approximately four new jobs per loan. Today SMEs have become an integral part of the Canadian economy.
Firms with fewer than 50 employees each were responsible for 81% of the new jobs in Canada in 1996-1997.
Credit helps in production, distribution, selling, consumption and expansion. It helps smoothen the rough
curve of seasonality of a seasonal business. It increases the immediate buying power of a consumer. But
where there is good there may also be bad and ugly. Credit could mean a collapse due to Overbuying,
Overexpansion or Overselling.
Probably the single most important factor is the maintenance of proper cash flow in operating a successful
franchise. Cash flow problems can be avoided by making sure that you administer and manage credit with
financial prudence and get paid promptly for goods or services rendered. Accounts Receivables, which can
be broadly defined as uncollected sales, are one of the largest assets of a business, amounting to
approximately 15% to 20% of the total assets of a typical manufacturing business. An uncontrolled growth in
sales could result in an uncontrolled management of account receivables.
What is the mission of a person with credit responsibility? What is the function of credit and credit
management? To answer these questions I will refer to an article written by Michell Woods-Howell, wherein is
mentioned the mission statement of Microsoft's Credit department. - 'To maximize the protection of Accounts
receivable while supporting Microsoft's effort to expand sales and increase market share throughout the
world, to evaluate accounts receivable worldwide risk and to make sure we have appropriate reserves in
place.'
It just goes to corroborate the fact that no matter how big or small is the size of business operation,
companies are focusing increasingly on managing and collecting their receivables efficiently and effectively,
thus maximizing their cash inflows.
Credit is temporary capital and the objective of credit is to lend with the purpose of increasing profits and
sales. A sound credit policy in business is the blue print to managing by measurement and benchmarks. The
question then arises is 'What is a Credit Policy and how does one write a Credit Policy for their specific nature
of business operations?
Writing an effective Credit Policy begins with an understanding of the financial exposure that you or your
business can endure and the amount of your working capital that you would be willing to risk, or call it 'invest'
in your customers.
Revolutionary developments in the computer and communications fields have forced companies to increase
speed and become relevant. Markets are becoming global and economic activity across nations is becoming
increasingly integrated. Competition can come from the face of a computer screen with the competitor sitting
in a different time zone. About the only thing in business that is a constant, is change. As the world
transforms at an unprecedented pace so have to the components that propel its engines. Thus a credit policy
that is written without an understanding of the market and ample room for change in it and the one that is not
Providing education for credit and financial professionals since 1928 18 | P a g e frequently revisited could become obsolete in matter of days. With the information-age revolution, knowledgebased activities are becoming increasingly important for existence. Hence, enhancing skill-sets and
knowledge is an intangible component of a credit policy.
I am of the firm belief that 'what gets measured gets managed'. Therefore as a matter of policy one should
manage by measuring results. Every time a deal goes bad, review the things that were done incorrectly in
either setting up of the account, monitoring or collecting it. Measure Days Sales Outstanding (DSO), aging
receivables, and bad debts as a percentage of sales. Keep a tab on your liquidity by reviewing liquidity ratios
like the current or working capital ratio. Also keep a pulse on your inventory turnover. This will tell you if your
efficiency is increasing, decreasing or the same over different time periods. Profits are a combined function of
liquidity and efficiency. You can use the same logic when assessing your customer.
Using quality information can help scores in managing risk. Collecting relevant information requires a well
thought-out Credit Application. It should seek permission from your customers to conduct credit investigation
from credit bureaus, trade and bank references for the purpose of granting credit. A Credit Application is a
document that not only collects information but is also an 'Application for a Loan ' that the applicant fills. Make
sure that your Credit Application reflects the sentiments that you are serious about the amount that you will
be extending in the form of cash or kind.
As a guideline you can write your policy in the following sections. The contents of each section can be written
to best fit the nature of your franchise:
1. The set-up of credit function.
2. Objectives of the credit function
3. Terms and conditions of sale
4. Sales responsibilities with credit issues
5. Billing procedures
6. Obtaining Information on new customers
7. Procedures for opening new accounts
8. Process of assessing the information to arrive at line of credit and credit terms that will be offered
9. Monitoring your investment in your customers
10. Profiling your customers to do strengths, weakness, opportunity and threat analysis.
11. The feedback loop for reporting
12. Allocating resources and responsibilities
13. Defining past-due and bad debts
14. Targets, benchmarks and deadlines for the
credit function
15. Procedure of collecting from delinquent
customers.
16. Analyzing the changing needs of your
markets/customers.
Entering the marketplace by investing in a
franchise can be one of the best ways that an
entrepreneur can launch a successful
business. Franchising in Canada continues to
grow at a significant rate. Franchise sales in
Canada in 1987 were estimated at $61 billion;
and now it is close to 90 billion. The retail trade
alone represents almost two-thirds of that
number. It is expected that sales will increase 10 to 15 percent annually over the next few years. The person
who operates a franchise gets the better of both the worlds - the satisfaction of operating an independent
business, combined with the leverage of working for a large organization.
Ultimately, Credit Management is an art and not a science. It is definitely an 'indefinite'. It gets its design from
a variety of inputs like the creativity, experience philosophies and attitudes of the individuals administering it.
Sometimes a decision based on your 'gut' feeling against all odds could prove to be the best one. But as a
credit adage goes "get the calculations right in a calculated risk" and remember that 'A sale is not complete till
the money is collected.' Good luck with your franchise.
Source: The above article appeared in the "Canadian Business Franchise Directory 2000".
Providing education for credit and financial professionals since 1928 19 | P a g e Closing Report THE CREDIT ASSOCIATION OF EDMONTON 2009 YEAR‐END REPORT
By David H. Hopkyns Prepared for the Credit Institute of Canada, Edmonton Chapter 2010 annual general meeting. 2009 was another positive year for the Credit Association of Edmonton. We had 7 monthly dinner meetings, Golf Tournament and a Christmas lunch, this in keeping with the Credit Associations mandate of continuing education, and information on related credit industry issues, for the public, and for those credit professionals, in the credit industry. The Credit Association along with The Credit Institute of Canada, Edmonton Chapter had its first combined golf tournament, which was held in May. This proved to be quite positive, with 60 golfers attending, and a profit was made for both groups. Our Christmas luncheon once again was very positive and a good time was had by all! The “Mystery Auction” rose over $1,700.00 dollars for the NAIT student’s bursary find. The Credit Associations main focus was on increasing the membership through the 2009‐year, and our web page has proven to be both cost effective and a great tool for marketing. You can check out our web page at www.caedmonton.ca The Credit Association of Edmonton members, and the board of directors, would like to take this opportunity to thank the Credit Institute of Canada, Edmonton Chapter, for all their kind donations and support we have received over the past year. We look forward to continuing this positive and mutually beneficial relationship over the next year. Thank you, David H. Hopkyns, ACI Credit Association of Edmonton Liaison Providing education for credit and financial professionals since 1928 20 | P a g e EDMONTON CHAPTER GRADUATION 2010 MAYFIELD INN Highest Mark in Credit Management 1
Kim Odundo
Credit Specialist Certificate
Jennifer Pacleb
Credit Specialist Certificate
Travis McBrayne
Credit Specialist Certificate
Elaine Kluchka
Credit Specialist Certificate
Carey Sorken
(Picture Unavailable)
Providing education for credit and financial professionals since 1928 21 | P a g e EDMONTON CHAPTER GRADUATION 2010 MAYFIELD INN Receiving a gift from Equifax
Elaine Kluchka
CCP Designation
also, Receiving a gift from Equifax
Amanda Bodnar
Receiving a gift from Equifax
Jennifer Pacleb
Receiving a gift from Equifax
Travis McBrayne
THANK YOU TO ALL OF OUR SPONSORS: Credit Association of Edmonton Commercial Credit Adjusters D & B Canada Metropolitan Credit Adjusters Priority Credit Recovery Western Forum of Credit & Financial Executives Association Special thank you to Patricia Vestby, for taking pictures at the graduation ceremony. Providing education for credit and financial professionals since 1928 22 | P a g e