NACM Oregon Business Credit Journal June 2014 Issue

Business Credit JournalMay 2014

7931 NE Halsey, Suite 103 Portland, Oregon 97213 Tel 503.257.0802 Fax 503.257.0247 www.nacmoregon.org

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In This Issue

Now I am the Beneficiary – looking at Counter Party Credit Risk ............................ 1

International Corner ............... 2

President’s Message ............... 3

Questions from the Forum ...... 4

Credit Card use in the Business-to-Business World ................. 5

National Summary of Domestic Trade Receivables .................. 6

10 Ways to Help You Stay on Track & Manage Your Time Better ........................... 8

A Special Meeting - Woodstock for Capitalists ........................ 10

Tips & Tricks .......................... 11

The Experian Vision Conference ............................ 12

Annual Meeting Photos ........... 13

15 Guidelines to Avoid CareerLimiting Mistakes ................... 15

Ways to Run Afoul ofMechanic's Lien Filings ........... 16

Now I am the Beneficiary – looking at Counter Party Credit Risk

continued on page 7

In my career path - I spent the better part of 25 years at U.S. Bank being the go to officer constructing and issuing wide varieties of letters of credit for many diverse purposes. The greatest skill I developed was to craft standby letters of credit issued on behalf of bank clients.

Standby letters of credit were created and issued for a plethora of financial promises that ranged from the redemption value of concert tickets to the liquidation of a large business in the beer brewing industry. Several growth areas for financial assurance were fulfilled when organizations entered into Industrial Revenue Bonds – and the financial backing for the interest payments and bond retirement were created with irrevocable standby letters of credit. In those days of utilization of bank lines of credit to provide bank clients with assurance engagements that their vendors and suppliers would have payment for delivered products – we crafted standby letters of credit that embodied trade discounts and extended invoice terms. Our bank client was able to get discounts and extended invoice terms because the seller of the goods or services had the strength of U.S. Bank behind the buyer in the event payment did not occur per contract.

Now 13 years later, I have moved position of employment in my career path and now have the credit position where I can ask contracting companies to issue a standby letter of credit in favor of our company. I now have the ability to accept or reject the proposals that finalize deals with financial guarantees behind them.

When the counter party in a commercial transaction now needs to provide assurance that they will pay their statement/invoice – the decision is broadened to include the “who” the counter party is – and if they are not strong enough on their own, the use of a standby letter of credit is requested. The standby letter of credit enables our contracting party to have their bank step up and to be the strength for the financial decision.

The steps to get to a standby letter of credit often go in a series of offerings:

First offered for financial assurance is the company or corporate guaranty. The decision to accept a guaranty is based on the credit analysis of the offering guarantor. If the counter party in the commercial transaction does not have strength in financial statements, the corporate guaranty does not afford much more support. Often the counter party has closely held financial information and they do not open their kimono to share the numbers.

Second offered can be an affiliate or parent guaranty. Again the financial picture of the offering guarantor needs to be discovered. The chance that a rating agency like Moody’s or Standard & Poors has rated the parent may exist and the credit worthiness analyzed and rated. The majority of larger corporate guarantys are rated by the long term rating. For the most part a minimum of Baa is acceptable for proper assurance.

Third – If the corporate or parent rated guaranty is not available or up to the bench mark for your credit decision, the standby letter of credit is a good solution. The strength and availability for drawing on a standby letter of credit is tied to the strength of the issuing bank. As I shared with the NACM National Steel Group several years, ago with a standby letter of credit – size of the bank does matter.

Strength of the standby letter of credit is rated by the total assets of the issuing bank and additionally their credit rating by the rating agencies. If you are offered a nationally

By Dave Erickson, CCE

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International Corner

Alice Knight is Vice President of Finance & Administration for Paper Products Marketing, Inc. Ms. Knight has more than 48 year's 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.

by Alice Knight, RGCP

Last month I shared with you some of the highlights from ICTF’s Global Professionals Symposium. Here is a recap of the balance of the presentations.

Monday afternoon started with a presentation by Russell D’Souza, VP Global Transaction Services, Hanesbrands (Hbi) on Best-in-Class Worldwide Finance Transformation and Working Capital Management. Russ started by quoting Albert Einstein “problems cannot be solved at the same level of thinking with which we created them” to stress the need for new thinking and transformation. A successful transformation depends heavily on customer collaboration and feedback. Objectives for Hbi included cost reduction, the creation of more value for Hbi, a focus on effectiveness, increased efficiency and control and the establishment of leading practices for an operating framework for shared services.

Monday concluded with an open forum moderated by Buddy Baker, VP Fifth Third Bank based on current greatest challenges from the morning speed networking session.

Tuesday started with an update on the global economy by Dr. Hans Belcsak, President Rundt’s Intelligence. Dr. Belcsak presented five current Global Hot Spots.

Hot Spot #1 Russia. This included a brief history of Russia’s interaction with the West, Vladimir Putin’s goals, expansion into Crimea and possible expansion into Moldova and the Balkins. The West, both Europe and the US are ill prepared to counter any expansion.

Hot Spot #2 – Iran. Dr. Belcsak noted that President Rouhani is not a moderate and that Khameni has the

final word on policy. Reported inflation is 32% but other estimates are 50% - 60%. Sanctions were biting but now many companies are flocking to do business in Iran.

Hot Spot #3 – Syria. This is a battle field between Sunni and Shia factions for control of an area caliphate.

Hot Spot #4 – China. China is aggressively expanding its claimed air control space and water control space. It is investing heavily in military spending, has launched its first aircraft carrier, and is increasing its control over transaction with Hong Kong and Taiwan. China recently recorded its first bond default.

Hot Spot #5 – Al Qaeda. The war on terror has metastasized but the goals remain the same- drive the infidel out of the Middle East, defeat them globally, and establish a caliphate run under Shariah Law.

Tuesday concluded with a panel, moderated by David Conaway, Partner, Shumaker, Loop and Kendricks on Effective Security Instruments for Trade Creditors Selling to Latin America. Panelists included Patricia Medeiros, Legal Counsel Syngenta Brazil; Omar Guerrero Rodriquez, Partner Barrera Siqueiros and Torres Landa, Mexico; and Rafael Castillo-Triana CEO FTAA Consulting, Inc. and The Alta Group, Latin American Region, Florida. Attendees were asked to consider their risk approach – do they avoid risk or do they embrace risk and search for ways to mitigate the effects? Possible rewards of embracing risk include increased sales, profits, shorter DSO and fewer credit losses. The panel noted that many Latin American countries are updating and strengthening their bankruptcy laws. In depth due diligence, good documentation and knowledge of

the legal system and exchange policies are still essential. Interest rates and currency fluctuations are common across this area. Patricia discussed Syngenta’s participation in agribusiness securities, a very specialized area. Omar gave an update on the economic and political climate in Mexico including “hot” industries (auto, oil, finance and legal) and “down” industries (construction and tourism). Rafael detailed recent improvements in the rule of law in various countries including security interest law, efficiency of the courts and insolvency protections. The legal climate is definitely improving but companies still need to exercise care. The most effective technique is still good due diligence and customer/country analysis before the sale.

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Message from the PresidentGetting paid for your attorney fees in a legal collection matter. We recently had a topic raised in a class regarding ORS 20.082, which addresses attorney fees for small contract claims (less than $10,000). The law specifies that small account contracts that do not include a provision for attorney fees may collect such fees if the debtor receives a twenty-day notice; that is, a demand for payment is made at least twenty days prior to the filing of a formal complaint. This provision has several exceptions for unique circumstances, including action against the maker of a dishonored check. Of course, the easiest way to avoid the twenty-day requirement is to provide for attorney’s fees in the terms and conditions section of your credit

application. If you have not done this, be sure to double-check with your attorney regarding your rights and the actions necessary under this statute.

Getting your certification. What do you know about the national designation process? Marilyn Rea, CCE, will welcome you to a luncheon on August 14 at the NACM Oregon classroom. She will review the “roadmap” and the requirements for the different levels of designation (CBA, CBF, CCE).

National designation classes. Already planning to earn a national designation . . . one of your 2015 resolutions? NACM Oregon will offer Basic Accounting this Fall, Business Credit Principles in early 2015, followed by Financial Analysis later in 2015. The actual scheduling will be driven by designation test dates and the availability of instructors.

Do you know a company or credit manager who would benefit from NACM Oregon’s training or services and who may not be a member? Please consider providing a referral to us – let your Account Executive or Customer Service know – and we’ll provide this prospective member information about NACM Oregon and our programs, products, and services. Thank you!

Rod Wheeland, CCE, CAE Direct: 971.230.1158 [email protected]

© New York Collection, Charles Barsotti. All Rights Reserved.

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mailto:rwheeland%40nacmoregon.org?subject=



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Questions from the Forum

Hi Jason,This comes up often in our industry group settings. When a company is "inactive" with the Secretary of State Office, what does that mean for the creditor that is still selling them? If the debtor doesn't pay and it becomes a legal matter will this change anything? Basically, is there anything the creditor should be considering when dealing with an inactive business?

Thank you!

We have a customer who prepaid for a deal, but their company is in receivership. Should I have any concerns about the money being called back like it could be in a bankruptcy situation?

Can you also explain what it means when a company is in "receivership" and what that means for us doing business with them as a prepay customer of ours?

Kathy L.NACM Oregon:

Member:

Question 2

Expert:

Expert:

A company can still technically operate even if inactive. Likewise, you can sue and collect from an inactive company. From the customer's standpoint, it raises questions as to whether or not the principals of the company can be held personally liable for a debt if it is not paid. Corporate formalities are being disregarded so there may be another source to collect from if debts are not paid. Creditors should also consider whether this company is facing solvency issues since it has not maintained an active status. This raises initial concerns over payment and whether any credit should be extended under the circumstances.

A receiver is appointed by state or federal court to operate, manage and/or liquidate a company for the benefit of all parties. Without knowing the purposes of this particular receivership, I do not know how the prepayment will be treated. If the receiver is continuing to operate the business, then the work should be completed. However, if the receiver is liquidating the company, you may be stuck with an unsecured claim. You should contact the receiver or the attorney representing the receiver for more information. You may want to request a copy of the order appointing receiver to review the purpose of the receivership. Again, without having this information, I unfortunately cannot provide more insight.

Welcome to a new section of the BCJ-Questions from the Forum. We will list questions and answers we think others can learn from or frequently asked questions. Have a question for other members or experts. Log on to the NACM Oregon Portal. Click here to go to the website.

Jason Ayres, AttorneyFarleigh Wada Witt

Jason's practice focuses primarily on commercial collections and litigation, bankruptcy matters and enforcement of creditors' rights where he protects clients' interests, rights and remedies both inside and outside court proceedings. He regularly represents equipment leasing companies and other commercial lenders in litigation and bankruptcy matters to protect their collateral and maximize their recovery, and is an active member of the Equipment Leasing and Finance Association (ELFA) and the Lease Enforcement Attorney Network (LEAN).

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http://www.nacmoregon.org



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Credit Card Use in the Business-to-Business World

Do you like your credit card rewards program? For the majority of us, the primary reason we use our credit card as a form of payment is the rewards program. It is not because we cannot pay the bill with a check, or from our bank portal, or from the merchants webpage…we simply want the rewards. Of course, in the business to business (B2B) process, customers’ logic is no different.

When we consider the various payment technologies in the market place today – cash, checks, ACH, wire transfers, EDI, credit cards – we must come to the realization that credit cards are the only payment technology that your customers can be incentivized for using. Today, in the retail market, credit card use typically exceeds 90% of a merchants total revenue. However, in the B2B marketplace, they only represent about 3-5% of all receivables. Due to the extremely high levels of use in the retail market, we must realize that the “green grass” for the card networks is in our backyards. VISA, Master Card, Discover, and AMEX are all seeking greater market share, and there is very little way for them to successfully hit their sales goals without penetrating the B2B markets. Let’s not forget that they are now public companies that need to show a nice return for stockholders. Therefore, the card networks are aggressively pursuing your customers with new incentives for the B2B merchants. B2B rewards are most often ‘kickbacks’ of some percentage of dollars paid with purchasing, corporate, commercial, or business cards. Federal Reserve data shows that card usage is up growing almost 14% each year and our statistics supports these numbers.

Perhaps you have received many more inquiries from customers -- or perhaps the bank that issued them their credit card – wanting to pay with a credit card number. Both VISA and MasterCard have released new Accounts Payable programs that generate a great deal of efficiency for AP departments. Perhaps more importantly, because of the “rewards,” these programs permit the monthly AP process to become a revenue stream for your customer. Thus, the battle continues to rage between your customer’s AP department and your AR department. And we all know, AP represents the customer and the customer is “always right”. Therefore, merchants are often forced to accept cards when they certainly would prefer not to because of the price.

A little good news: the interchange rates associated with these AP programs can be quite favorable when compared to traditional B2B rates. Additionally, when payments are generated out of the Credit Card AP programs, merchants will receive the remittance information and the transactions are very secure. Lastly, no special data input is necessary (We will speak further about this in future articles).

As the card networks seek more transactional volume in the B2B market, it is more important than ever that we learn more about the dynamics of processing. The card networks do not help you reduce your price by implementing best practices or giving you “do overs” when you overpay on processing. It is incumbent upon us to learn, implement, and put into practice the best possible solutions.

If the card networks are successful and hit their sales goals, imagine what your costs will be if they double their volume. Amazingly, they hope to hit 10-times the volume in the next decade. Are you ready? They are.

Rudet FountainVP Channel MarketingUnited TranzActions(404) 386-9586 Direct Line(678) 829-0794 Direct [email protected]

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Results 1st Quarter 2014DSO slightly increased from the prior quarter to 38.70 from 38.00. A year ago the measure was 40.10. Best Possible DSO increased to 30.33, as compared to 30.00 last quarter and 32.60 a year ago. Average Days Delinquency is the same as last quarter 4.50, as compared to 4.67 a year ago. The percent reported over 90 days past due increased to 0.40 as compared to last quarter at 0.25, as compared to 0.35 a year ago.

Medians for 27 different industries are included in this summary. If any SIC code has less than three responses, it will not appear in the report. So to get more participation in your industry, please mention the survey to your colleagues, and pass along the link for them to participate.

Please contact Customer Service or your Account Executive for a copy.

To those of you that provided data we thank you again for your participation.

National Summary of Domestic Trade Receivables

We are happy to provide you with the 1st qtr. 2014 National Summary of Domestic Trade Receivables (DSO) results. Remember, if any SIC code has less than 3 responses, it will not appear in the report. So to get more participation in your industry, please mention the survey to your colleagues, and in July, when we survey the 2nd quarter NSDTR, pass along the link for them to participate. Now that you've done the NSDTR, if you really want to see how you're doing, you'll want to participate in CRF's comprehensive benchmarking survey. You can do that at: http://www.crfonline.org/surveys/benchmarking/benchmarking.asp Get the $1,500 report FREE! Thank you again for your participation.

Below is a link to Experian/ Moody's Analytics Small Business Credit Index Report. We think it is important enough we wanted to add the report to the BCJ but thought a direct link to the PDF would be easier to read. There is some great information in here about recent performance, shifting industry patterns, and much more.

www.nacmoregon.org

http://www.crfonline.org/surveys/benchmarking/benchmarking.asp

https://www.nacmoregon.org/files/experian-moodys-analytics-small-business-credit-index-q1-2014.pdf



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chartered bank standby letter of credit, more than likely the financial information is readily available on the web and ratings listed within a moments trace on the web. Federal Reserve and the FDIC have capital ratios that require banks to have adequate capital and retained earnings to back their financial promises. In that a standby letter of credit is the bank’s promise to pay they have to allocate capital to back them up.

A standby letter of credit is to be irrevocable, have a stated dollar amount; a specific document or documents that are to be presented to the issuing bank for payment and the standby letter of credit has an expiry date. Additionally, the issuing bank needs to disclose the location of where to demand payment and what laws and usage is to govern. Those are the bare bone requirements of the standby letter of credit. Each financial deal necessitates a fine tuning of the beneficiary and counter party needs and demands.

As a negotiating point to have a standby letter of credit as your assurance of payment – it is not issued or offered into the transaction without a cost. As an issuing bank is required to have adequate capital behind their issued standby letter of credit – they are charging their client [now the applicant] for use of capital and credit. It can be anticipated that charges on per annum basis run from

1.5% to 2.5% of the face amount of the letter of credit. Your counter party may be asking for a discount or a charge share to carry the cost of the standby letter of credit. The charges are not cheap, so don’t readily agree to pay charges!

My closing comment – do not accept the first standby letter of credit offered as your financial assurance. Ask to be the editor and commenter before the credit is issued. If you are not sure where or who the issue bank is – have your bank check out the other bank as to stature and soundness.

Dave Erickson, CCEDirector of Credit Northwest Natural Gas Company Chairman of NACM Oregon Foundation, Past Chairman of NACM Oregon and participates in the NACM Oregon International Trade Group and the NACM National International Utilities Group

© New York Collection, Matthew Diffee. All Rights Reserved.

Now I am the Beneficiary – looking at Counter Party Credit RiskContinued from cover

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We all have times in our day when we fail to be productive. Our time disappears and have no idea where it went. If you are like most people perhaps you feel the same way. We begin to feel overloaded and deadlines are looming.

Maybe your days are full of distractions and you go from one interruption to the other; a co-worker needing something from you, or maybe there are hiccups in a credit application.

There is always one more thing stopping you from getting through the things in your to-do list for the day or week. Here are 10 ways to help you stay on track and manage your time better.

1. Keep a Proper To-Do List

Do you ever have days where you feel like you are missing something? If so, a to-do list is probably something else you are missing, or at least an effective one. A long, vague to-do list can be very overwhelming.

The best thing to do is to start with prioritizing them in order of importance.

It is easy when making a to-do list to simply write out the big projects on your list as one item, but be careful to not be vague. For instance, you may have started with “Collections” as an item on your to-do list for the week. When writing one word to-do list it is easy to become off track and forget a task that is involved.

Write down the big items that need accomplished, then break it down into actionable tasks. Writing down actionable tasks that are more specific will help you to not miss a step or an account in the process.

2. Prioritizing Tasks

The sales team just walked in with another credit application crisis they need your help with right now, but you are in the middle of dealing with another project, and have ten emails waiting for you. You know you just need a little more time,

but you are losing focus because of this emergency waiting for you.

It can be hard to prioritize your to-do list when you are faced with tasks that need your attention right away, or think needs your attention.

When you have a to-do list full of similar tasks try grouping them together.

Maybe you have two collection accounts to deal with (or you can just send them over to NACM Oregon and check that one off your list), three credit application, and a few hours of administrative paper work to accomplish. Batch these tasks together; different task can demand different types of thinking. So sticking with one item can help you stay in the zone instead of switching back and forth.

3. Find Your Groove

We have all heard the term, “use your time wisely.” This doesn’t just mean to focus on your to-do list or to stop procrastinating. It also means we have certain times during the day our energy picks up and we feel more productive, or we have low energy time, possibly after lunch when it is harder to focus.

Knowing how you function during the day can help you schedule your tasks. Find the time when you are more low energy to check your emails and return phone calls. When you are at your peak energy level schedule the task that needs your full attention.

4. Don’t Let Procrastination Reign

Procrastinating is easy to do; put off what could be done now for something more exciting or easier and say we will do it later. When we procrastinate our to-do list just keeps growing and then something else comes up and before we know it we are behind and deadlines are looming. The last thing needed is to have procrastination rule the day.

The key to overcoming procrastination is to just start! Start anywhere, but start, once you are working on the task at hand before you know it you have started to flow and are done before you know it. Often the reason you have procrastinated on the task in the first place is because it seemed overwhelming.

Creating the to-do list that was mentioned previously will help with this, creating those actionable steps that help you layout your to-do list step by step.

10 Ways to Help You Stay on Track & Manage Your Time Bettercreated by Amanda Garrick, BCJ Editor

continued on page 9

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5. Multitasking is a No No

Trying to multi-task can do more harm than good, we all think we can do it, but in reality trying to do more than one thing at a time isn’t possible. It can actually take longer to complete both tasks because you are trying to do them at the same time. Plus the probability of error is higher because your concentration is split. If you are on the phone, focus on the phone call and the information you need for the phone call, then move on to answering the emails that are coming in. You will get them done faster, retain more information, and create a better work product.

6. Let it Go

It is easy to say “Yes” to everything when people ask you to do something at work. This can lead to being too busy and having projects piling up. Learning to say no to the extras will help you clear your plate of the things that are not necessary, the last thing you need to is to be stressed out at work.

Maybe you are a person that doesn’t like to let go of your to do list. Maybe you insist in doing it all yourself or have to micromanage others who are assisting you. To you, no one can do it like you can. Taking on too much and not letting others assist you can mean you are not making the most of your time; your projects could be rushed or incomplete.

This could be the perfect time to train someone; taking a few minutes now could lead to extra time to work on more important projects. When others ask if there is anything they can help with, learn to say “Yes” when you know you can pass small tasks off little by little.

7. Manage Distractions

We all have distractions throughout our day. Technology being a big factor, we hear buzz, ding, and ring followed by emails popping up. You may even be tempted to check your Twitter, LinkedIn, or Facebook feeds during your day. An article from the New York Times; “Brain, Interrupted,” says that a typical office worker gets 11 minutes between each interruption, while it takes an average of 25 minutes to return to the original task after an interruption. This time adds up and before you know it, 2 hours of your day have been lost.

Our distractions can come from all directions especially when we have lost focus already. With constant emails, co-workers needing your time or clients calling it is hard to get back on track and back into the flow of work.

To get on track and minimize distractions it is important to put your cell phone away and put it on silent or turn on the do not disturb function, if you are worried about missing something. Minimize your email window and give yourself a time to check it after you get done with a task. When a client calls, unless it is urgent, prioritize it on your to-do list. This will help you to concentrate, even with the many distractions you are faced with.

8. Breaks are Great

Most people are guilty of this one. We are so busy that we don’t take breaks. It can be even harder when you see others around you not taking a break so you feel guilty taking one yourself. The fact is that it is impossible to be able to focus and create our best work without taking some time to rest our brains. We all need some time to recharge.

When you take a break, you are not wasting time, if anything you are making yourself more valuable and effective during work hours. We all have that time in the day when our minds start to wander. This is the perfect time to take a break and recharge your batteries.

It can be hard to take a break in the middle of a task, so try adding “Take a Break” to your to-do list, or set an alarm. Taking a break can consist of just getting up from your desk to get a cup of coffee, or go for a walk around the block or parking lot. It is also important to take time for your lunch, we all need to eat.

9. Make it Personal

Having personal goals at work and in your career are perfect ways to help manage your time. Goals help guide you through your day. Think of them as a big to-do list. Do you want to move departments or advance your education? Have you been thinking about taking classes to get your CBA or CBF designation? Now is a perfect time to look into the future and see where you want to be in a year or even 5 years. Set both short-term and long-term personal goals.

10. Enjoy

The last one is to find joy in your job. We can play at work too. We get so caught up in the day to day tasks and our busy schedules that we forget to enjoy what we do. A majority of your day is spent at your job, so why not find ways to enjoy it more.

10 Ways to Help You Stay on Track & Manage Your Time Bettercontinued from page 8

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The Berkshire Hathaway annual meeting of the shareholders always takes place the first weekend in May. Chairman Warren Buffett refers to this three day event as "Woodstock for Capitalists." And although I've been a shareholder for a couple of decades, this was the first annual meeting I've attended.

As you may know, Berkshire Hathaway (BH) owns a number of companies almost everyone recognizes, including Ben Bridge Jewelers, Burlington Northern Santa Fe Railway, Dairy Queen, Fruit of the Loom, Geico, Justin Brands, Johns Manville, See's Candy, and our very own Oregon company, Pacificorp. And, it holds significant minority positions in American Express, Coca Cola, and Anheuser-Busch. Last year it purchased Heinz.

With $225b in assets, $182b in annual revenues, and 335,000 employees, Berkshire Hathaway is the ninth largest corporation in the world and a major economic force in the United States and the world .

The Chairman, Warren Buffett, the second richest man in the US, has $65 billion in assets. He introduced the BH Board of Directors, which includes Bill Gates, the richest man in the US, with about $75 billion in assets.

This three day gathering traditionally begins on Friday with a variety of events. Omaha welcomes 38,000 registrants - I expect this is easily the largest such meeting in the country - and the annual shareholders meeting takes place on Saturday. Having sat through several such meetings for public companies over the years, I'd say they are consistently boring, and they seldom provide any substantive information or even anything vaguely interesting. In contrast, the BH meeting is anything but dull. I found it so entertaining and informative I plan to attend consistently in the future.

The all day Saturday meeting starts by getting in line outside the Century Link Center about 6:30am in preparation for the 7:15 opening and the rush for seats, only a small number of which are reserved for the Board and special guests in the first row in front of the stage. The meeting starts promptly at 8:30am with a series of movies specially made for the meeting. These movies involve many of the BH companies and characters, like the Geico lizard , the Geico camel , and the fruit characters from Fruit of the Loom . My favorite movie short was the one of Chairman Warren Buffett singing "I Did It My Way" with Tony Bennett. When the meeting was called to order at 9am, Buffett introduced Bennett, who was sitting in the front row with the Board. It brought the house down!

From 9am to 3:30pm, Chairman Buffett (who's 83, on the right below) and Vice Chairman Charlie Munger (who's 90), answered some sixty questions posed in person from a panel of journalists, a panel of financial analysts, and shareholders

in the audience. They claimed no advance knowledge of the questions, and they were cordial, candid, and humorous in their responses. Late in the afternoon, after a short break, the official shareholders meeting took place.

During the extended Q&A session, Buffett and Munger offered their opinions and a number of insights into this business they've run for 48 years:

Buffett says they've built the company for strategic value, and they tend to ignore short-term impacts and results. When asked what they look for and emphasize, he said they focus on integrity, experience, and a learning culture. They're not interested in doing business with companies that do not have those attributes. And their companies always hire for attitude, recognizing the importance of technical expertise, but beginning with the right attitudes and personal discipline, without which expertise doesn't really matter. Munger, who really is the straight man of this duo, sat quietly through Buffett's long answer and then said they've been involved in "ignorance reduction" for the last five decades. When the laughter of the more than 20,000 people in the arena (and many thousands at remote sights around Omaha) died down, he explained that they've learned a great deal about business, much of it through experience - and not all good experience - along the way. He observed that they really didn't know enough to run the first few companies they acquired and through the practice of "ignorance reduction" they learned how to make them successful.

A Special Meeting - Woodstock for Capitalists!By Rodney Wheeland, NACM Oregon President

continued on page 11

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Microsoft Word Tips & TricksMake your workflow faster and easier with these little tips and shortcuts when using Word 2010

• New Document: Ctrl + N

• Open Document: Ctrl + O

• Open recent File: Alt + F, R

• Close Document: Ctrl + W

• Save Document: Ctrl + S

• Save As: F12

• Print Document or Print Preview: Ctrl + P

• Skip between muliple Word Documents: Ctrl + F6

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In response to another question, Munger noted they'd learned a lot while "scrambling out of mistakes." Buffett opined they have learned difficult situations tend to get worse over time and their hesitation in decision making was a contributing factor in some early failures. He suggested today's approach of addressing issues promptly has been beneficial to the company.

In response to a question about how BH finds companies of interest and partners to work with, Buffett and Munger emphasized the importance of integrity, that they've never looked for just "a good deal." Buffett suggested "the way to find a good partner is to be one." He expanded his commentary to other important relationships in business, including customers, suppliers, and employees.

So much of what these two men had to say over five and a half hours relate s to the tasks the NACM Oregon membership faces every day. Credit starts with integrity and the trust placed in the company's customers. The most successful credit people I know certainly value "ignorance reduction," "scrambling out of mistakes," and developing great relationships with customers, peers, and others they rely on.

Obviously, I enjoyed the meeting immensely. I'm looking forward to attending the May 2015 BH annual meeting. It's already on the calendar!

A Special Meeting - Woodstock for Capitalists!continued from page 10

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This May I attended this meeting for the first time. The majority of the 400 participants were representatives of major Experian customers, including banks and other lenders, large corporate entities, and international service providers. A few of us represented major customers who resell or distribute the Experian product lines.

The conference offered a general session each day and more than eighty breakout sessions over the three days. The keynote speakers were President Bill Clinton, Jim Paulsen, and Roger Staubach. While I found value in several of the breakouts and the general sessions, I especially enjoyed Clinton's presentation. He emphasized several themes: interdependence and cooperation; accelerating the positive and reducing the emphasis on the negative; and obstacles to success.

Regarding interdependence and cooperation, he reminded us that fundamentally, business is about relationships of providers and buyers. In today's economy both are driven to cooperate to reduce costs and make the relationship more effective. As you might expect, he also pictured this in terms of other groups, such as government and society.

Regarding acceleration of the positive, he commented to the effect that in all relationships there are positives and negatives. Some of the latter may always be hurdles in the path, but they shouldn't be roadblocks to accomplishment. He suggested parties should focus on that they can agree about and emphasize growth.

Regarding significant obstacles to growth of the American economy , he sees three that are primary: equal access to education, employment, and equal rights; inequality in financial terms; and climate change and destruction of local resources. He believes Americans can find agreement in all three areas, and he noted the Clinton Foundation is especially focused on the latter.

He left us with several suggestions for success. In particular, he emphasized the importance of embracing change, pointing out some of the changes in technology that have impacted all of us, whether at work or at home. He made some jokes about use of social media and the need for the Baby Boomers , like himself, in particular to adapt and adopt.

Much of what he talked about resonated with me. In thinking about NACM, its membership, and their tasks, clearly the world of credit is changing. At the same time, t he fundamental task remains the same - to get paid in a timely fashion. The way we go about managing this has changed a great deal over the last few decades. We have better education and training, greatly expanded information resources, and vastly improved technology at our disposal. Still, as Clinton pointed out, much of what we do relies on the relationships built by individuals . . . customers, staff, vendors, and others with roles to play in the process.

The Experian Vision Conference By Rodney Wheeland, NACM Oregon President

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2014 Annual Meeting

Past Chairs, Tom Hammond & Mike Bena visiting with Rod Wheeland

Past Chair, Joe Fustolo & Lou Rice, Foundation Scholarship Chair

Dave Newman, CBA; Clara Nemeth, CBA; & Jeff Butterfield, CBF

Dr. Chris Kuehl presenting his Economic Outlook

Chairman of the Board, Marsha Johnson presiding over the Annual Meeting

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Marsha thanking Marilyn Rea, CCE & Charlene Gothard, CBA for mentoring the CBA study group

Board member Linda Bishop, CCE, ICCE; Dave Newman, CBA; NACM Oregon Sales Executive Clara Nemeth, CBA; Bill Heintz, CBA; Marsha Johnson, CCE; Marilyn Rea, CCE; Charlene Gothard, CBA

NACM Oregon Sales Executive Caroline Anderson, CGA greeting Tawyna Marsh, CBA

Marsha Johnson, CCE& Lori Jones, CCE

Brett Hanft, CBA & Board member Tawnya Marsh, CBA

Board Member Raeann Binau, CICP, RGCP & Lori Kimball, CBF

Bill Fig from law firm Sussman Shank LLP presenting

Raeann Binau, ICCE, RGCP; Dave Erickson, CCE; & Alice Knight, RGCP

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15 Guidelines to Avoid Career Limiting Mistakes

You can avoid many mistakes by following these guidelines:

1. Admit when you make errors, correct them as quickly as possible, and learn from them.

2. Always complete assignments on time.

3. Arrive early for meetings, or at the very least be on time.

4. Don't be a know-it-all.

5. Don't embarrass your manager in meetings or in writing, and never go behind your manager’s back.

6. Focus on adding value. Doing only what is required is rarely a good long-term job strategy.

7. If you disagree with your boss, before sharing your POV, ask if they want your opinion. If the answer is no, follow the instructions you received unless doing so is illegal, immoral, improper or potentially harmful to you or others.

8. Invest in your continuing professional education.

9. Keep your commitments.

10. Know how much authority and autonomy you have.

11. Make sure your communications are clear and concise.

12. Never complain about your manager at work.

13. Recognize the importance of adapting to and adopting the cultural norms in your workplace.

14. Remember that what others say is not always what they mean. For example, and depending on who is saying it, the phrase: "Please try to complete this assignment as soon as possible" may actually mean “Do it now!”

15. Shore up weaknesses before they hurt your future prospects, or your reputation. For example, consider whether your presentation or public speaking skills need improvement.

Michael Dennis is a business consultant, speaker and risk manager. He is the author of several books including: "The Credit and Collection Handbook." He is also the author of a Free online resource, the Encyclopedia of Credit at: www.encyclopediaofcredit.com. Michael can be reached at 949-584-9685.

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Ways to Run Afoul of Mechanic’s Lien Filings

Ways to Run Afoul of Mechanic’s Lien Filings

In a perfect world, suppliers and contractors would get paid promptly for money owed, but as this fairy tale environment doesn’t exist, mechanic’s liens do, making payment more likely when things go wrong. However, a myriad of possible mistakes are possible with mechanic’s lien filings, and even the smallest can mean your lien rights will vanish when fought in court. The following are a few, but by no means a complete list, of the most frequent ways any eligible subcontractor or materialman can botch a filing and costs their company a lot of money.

Not Getting Enough Job Information Up Front

Waiting until the debtor owner or contractor is late on payment is not the time to collect the job information as this is likely the time they are going to be the least bit helpful in supplying the necessary information. At the outset of supplying labor or materials, it’s important to get the names and addresses of involved parties. If supplying to a subcontractor, it’s critical to find out which general contractor (GC) specifically hired that subcontractor, as there could be multiple GCs working on a large project. On public projects, don’t forget to acquire the bonding information and do some research on who is behind the surety. Do not expect that a municipality will follow up to make sure the GC took out a surety bond. Sometimes GCs don’t do everything they are supposed to, which can be to their peril and yours.

Not Getting Enough or Investigating Information as Job Progresses

A small mistake on a name or address, or the estimation of the first or last furnishing date can, and often has, been used by debtors to invalidate a lien. The smallest details can cause the greatest damage. For example, if a creditor estimates the date of last furnishing in a state like Florida, where the supplier has 45 days to serve a lien notice and the service was made in 46 days, the lien rights will vanish if challenged. NACM’s Secured Transaction Services (STS) cited a case where a supplier lost all lien rights because the address where it delivered goods was slightly different than the address listed in contracts. The work site was literally across the street from the existing, but because the supplies went to a technically incorrect works site address, the supplier lost their lien rights.

Not Getting Delivery Addresses Precise

Similar to the case mentioned above, it is important to deliver materials only to the site where contracts specify the job is being located. Sure, some will try to convince the supplier that they are concerned about shrinkage/theft, but complying only ups the risk of losing lien rights, dramatically so. That’s because a judge can stipulate that any materials not sent to the official job site may not have actually made it there since, once they go into the debtor’s inventory, they’re no longer able to be accurately tracked. STS noted another example where this scenario occurred and, as a result, the supplier’s lien was only able to capture approximately 50 cents on the dollar, as only about half the materials went to the work site.

Not Knowing the Differences between State Statutes

Virtually no two states in the country are the same when it comes to mechanic’s lien statutes. Various small nuances exist that, if not tracked, can and will be used against you. Ignorance is not an excuse when defending lien rights. For example, some states are unpaid balance states, which mean they stipulate that a lien must be filed before the owner pays the GC or primary contractor. If this does not happen, the lien is unlikely to hold up in court. Some states are full price states that allow “double jeopardy.” This is where a supplier is able to file a lien even if the subcontractor it sold to was paid, as long as full payment never made it from the subcontractor to the supplier.

Source: NACM-National

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