NACM North Central Members Share Experiences and Lessons Learned from the Pandemic
Monday, May 25, 2020
NACM North Central recently asked several members to share their experiences and lessons learned from the pandemic. Following are their responses.
What has been your most significant credit management challenge resulting from the pandemic, and how have you dealt with it?
Pam Krank, The Credit Department Inc.:
We’ve been a paperless, cloud-based credit department for 10 years, so we haven’t had any significant challenges working from our homes. For us, it’s tracking all the sudden increases in default risks. We’re watching hundreds of companies now instead of a few dozen for insolvency. COVID-19 is killing the weak businesses first and is pushing many others into higher risk categories. Keeping tabs on all of them is a challenge, and we’ve had to step up our comparison tools to keep CFOs up-to-date on changing landscapes for their credit risks. Our focus is on customers’ cash and cash availability position. If credit departments aren’t tracking cash flow of their customers, they’d better step up or they could suffer large losses in their portfolios.
What credit management tools/resources have you relied on more during the pandemic and why?
Michelle Van Kley, Fey Promo:
We've relied mostly on the daily eFlash alerts to keep us informed on how customers are paying or not paying.
Robin Kirnyczuk, CBF, Pace Analytical:
Not a lot has changed for me due to the pandemic. I know that email is the most important tool I have. I rarely use the phone and haven't in years. I get maybe five calls a month. But if I lost email, I could not work. I send and receive hundreds of emails a day and, with more and more people working from home, I think that is true for most everyone. We would be lost without it.
Linda K. Benson, Graco Inc.:
Information from industry groups has been extremely helpful. It’s more important than ever to know what is happening locally as well as nationally with COVID-19. Other than that, communication has been a key. Suddenly, the group no one knew much about (credit and collections), everyone now relies on and wants to hear from. Communicating to customers, Sales and management is paramount. Customers need our support. Sales needs to know we can help them as well as the customer. Management needs to hear our experiences with customers and collections. We are working physically apart but are working together more than even before.
What is the biggest credit management lesson you’ve learned from the pandemic experience?
Susan Rausch, CCE, Patterson Companies:
When leaders truly lead, they help instill within their employees trust, commitment and pride for a job well done, which leads to loyalty. When an emergency like COVID-19 hits, they can then enjoy 100% confidence that their team is giving them everything they need, especially in a work from home environment. They don’t feel they have to check on every minute because, again, the trust and commitment has already been built. This also allows maximum efficiencies so that management is not spending valuable time micromanaging each employee. In other words, it is wise to build that level of trust and commitment before an emergency, not while in the trenches.
Unfortunately, too many businesses simply “manage” their teams, along with superlative gestures at building team morale solely through office parties, games and treats, with no real depth of team development. When a crisis hits, they then feel a need to micromanage each team member. Unfortunately, this may have the opposite effect, breaking down trust and building animosity among team members.
In cases like this, many companies suddenly realize they do not trust their employees. When developing your teams through true leadership, you help to create environments where employees feel respected and understand that their skill level and experience is recognized. In short, learn to develop that trust through the good times within your organization and it will help prepare you for any eventuality, rewarding you many times over.
Stacie Neufeld, CBA, Donaldson Company Inc.:
I have learned that we can work efficiently and effectively while we work remotely, and I’ve learned to be very attentive to what my customers are saying and what they aren’t saying.
Kenneth M. Rein, Daily Printing Inc.:
We have been trying to stay in front of our customers and take a soft approach. For example, our accounts receivable person is using this message to address any customer that is past terms:
Just checking in with you wondering how your company is faring in these extraordinary times business to business. We here at Daily Printing are open for business and working.
I want to check in regarding the invoice that has now gone past our terms. Please let us know how it is going for you, and any update on any payment would be greatly appreciated.
We thank you, appreciate your past business, and are looking forward to prosperous times in the near future.
We have had great response and right now our over 60/90 is running at 15% which gives us a chance to get through this downturn.
Tina M. Bishop, Indelco Plastics:
The biggest lesson I have learned is patience and accountability. I mention patience because customers are going through a drastic change in business practices. Some companies are facing shut down, while others are facing limited staff, reduced hours and the stress that goes along with daily challenges. Credit is never a black and white scenario, but based on outside-the-box thinking we can learn to assist customers in these challenging times. How can we help customers achieve success and keep afloat while still maintaining customer relationships? What can we do differently to achieve success? These are questions our department faces daily.
Another lesson I have learned is accountability due to the new methods of working from home. How do we hold teams accountable for work they are doing outside of a normal work period? By implementing a weekly update system, this has allowed our team to focus on collections and making connections to customers. They report their findings weekly so that we can stay on top of problematic accounts. I feel the team holds each other accountable for their work as this helps the team as a whole. Making the most of our time while working from home, while we are faced with more disruptions, has been a learning experience for our company. Knowing that each person on the team understands how important their job is to the entire company has made a huge difference. Giving back to the team with rewards, games, fun challenges and other items to break-up the day-to-day struggles has helped us achieve a positive outcome on our work experiences.
Sharon Clancy, Bay State Milling Company:
It is important to become more agile, and quickly analyze and break down portfolio by business sectors to help identify our risk areas and provide metrics. It is also crucial to engage in dialogue with key customers. Emphasize collection efforts with the ability to remain supportive but still able to balance the difficult juggling act between empathy and what is logically best for our business.