On guard for deadbeats Credit: The National Association of Credit Managers celebrates its 100th anniversary this year, a tribute to its members' ability to save companies from poor credit risks.

July 01, 1996|By Bill Atkinson | Bill Atkinson,SUN STAFF

It was at William J. Von Hagel's first meeting as a member of the Chesapeake chapter of the National Association of Credit Management that he picked up the tip that not only saved him some personal grief, but also spared his company a potential $500,000 loss.

Von Hagel, who was then reviewing credit for a bank in Baltimore, was deliberating over a loan to a heating and plumbing contractor when he was told that the company had a history of paying late.

"I was on the middle of the fence with making this loan recommendation to the loan committee. Then I knew what side I was on," said Von Hagel, who today heads management contract administration for Hunt Valley-based PHH Vehicle Management Services. "It was the straw that broke the camel's back."

Weeks after he turned down the request, the company filed for bankruptcy, said Von Hagel, now chairman of the Chesapeake Chapter Inc.

Von Hagel and other members of the Chesapeake chapter are quick to offer such testimonials on how the Hunt Valley-based organization has helped keep them from losing millions through bad credit decisions.

This year the chapter celebrates its 100th birthday and members say it is a resource they hope thrives for another century.

"What we do has a very substantial effect on how businesses operate," said Jeff Braunstein, president of the Chesapeake chapter's parent group, the National Association of Credit Management of the middle Atlantic.

The association has about 1,200 members in Maryland, New Jersey, eastern Pennsylvania and Delaware, and it is one NACM chapter among about 50 across the nation.

Members are credit managers, whose job is to make sure their companies are paid back after extending money or goods and services. They work for companies that include Black & Decker, Arundel Corp. and University Press of America.

The association offers continuing education seminars on such topics as letters of credit, ethics in credit management, and interpreting Securities and Exchange Commission reports.

It also provides collection services for companies that have customers who don't pay their bills, and offers a database on businesses across the country.

Members can tap into the database to find out if a company has filed for bankruptcy, pays its bills late, or is involved in lawsuits.

Members pay $300 in dues each year and are charged for using the database services. "It is chump change," said Robert T. Kean, credit manager with Arundel Corp., a Sparks-based stone and concrete products supplier.

"It has paid for my membership for 100 years," added Kenneth W. Miller, credit manager with Black & Decker. "I went to one meeting and saved $30,000."

Kean says the benefits are worth every penny, and the most important part of belonging is simply meeting with other credit managers and sharing information.

The association has bylaws forbidding members to discuss rumors involving companies. But they can exchange public information, such as tax liens, lawsuits and bankruptcies.

ZTC Credit managers aren't always the most popular people within a company. They can squelch deals that seem like sure winners to salespeople.

"We are almost like a traffic cop in many instances," Kean said. "The most difficult part of the job is looking at a long-term relationship and deciding that it has to be modified or terminated."

Kean and the other credit managers say many companies have cut back on maintaining strong credit departments and are rolling the dice in favor of sales.

"There has been a tremendous change in the corporate philosophy in terms of credit management," Braunstein said. Companies "have gone too far over to the sales side."

That's why Braunstein says it's important that NACM exists -- to make sure the flow of money and goods doesn't drain away in bankruptcy proceedings and bad checks.

In that regard, the Chesapeake chapter has changed little in mission and philosophy since its founding in 1896. It merged with the New Jersey NACM last year to cut overhead.

To drum up more members, the Chesapeake chapter will begin marketing its services to thousands of companies in the four-state area later this month, Braunstein said, and open its own Web site on the Internet.

"We have a big push on membership," Braunstein said. "We are a good deal. We are a invaluable resource."

Pub Date: 7/01/96

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