October 12, 2023

Today’s workplace has up to four different generations all working together. Take a look around your office. You’ll most likely see a mix of Baby Boomers (1946-1964), Gen X’ers (1965-1980), Millennials (1981-1996) and Gen Z’ers (1997-2012). The dynamics among different generations often give rise to perceptions, misconceptions and even the occasional workplace stigma. But if leveraged strategically, each generation can learn from each other and add value to the credit team.

Caroline Perkins, CCE, credit manager at Mickey Thompson Performance Tires & Wheels (Stow, OH), has been at her job for 36 years. “Whether you’re towards the end of your career, in the middle or just starting out, I think it’s important to value whoever you’re working with and respect them,” Perkins said. “I’ve been through a lot of different scenarios, but we have younger people who have joined our team in the last few years who provide value also. It’s key to have an open mind and respect what the younger generation brings to the table and vice versa.”

The seasoned wisdom of baby boomers, the innovative spirit of millennials and the tech-savvy agility of Gen Z all come together to create an extraordinary credit department. Learn how each generation can work together in harmony.

1. Understand Differences, Not Stereotypes

Embracing the differences of generations is crucial for a team to be successful. But it is equally important to acknowledge that not all stigmas associated with generational groups are accurate or fair. Stereotypes and labels can be limiting, and individuals often find them reductive and unrepresentative of their multifaceted abilities. Generalizations and inaccurate assumptions about age and experience have a negative effect in the workplace. For example, not every Millennial or Gen Z’er prefers to email over a phone call, and some Baby Boomers like to text.

Different generations provide different perspectives in the workplace. Older credit professionals can teach younger workers about how to handle setbacks or mistakes because they have lived through it already themselves. Brittany Yvon, CBA, CICP, credit manager at OMG, Inc. (Agawam, MA) refers to herself as a Millennial. “I manage two Baby Boomers, so there’s definitely a big age gap,” she said. “They have a lot more experience in the workplace than I do, so we’re always bouncing ideas off of each other in a collaborative way. I offer one viewpoint and then they’ll both say something from their perspective and that comes from a place of years of more experience and wisdom.”

Growing up in the era of technology has not only allowed younger generations to teach older generations how to become more tech-savvy, but also challenges traditional workplace values and culture. Working from home with Zoom meetings and digitalized credit applications are a couple of examples of the value of technology widely accepted by younger generations.

2. Master Different Communication Styles

Everyone’s communication style is different. Some employees prefer to share urgent topics in written forms through email or Teams chat, while others like face-to-face meetings or phone calls. Whichever communication style you prefer, you have to give and take. You must take the time to understand how each team member likes to communicate.

“As a remote worker, my favorite form of communication, as someone that rarely interacts directly with customers, would probably be Teams, Zoom or similar online meetings,” said Leon Zhang, credit operations manager at SRS Distribution Inc. (McKinney, TX) “In fact, phone calls are my least favorite type of communication. Perhaps a part of that is what I grew up with, interacting with friends through social media and apps.”

Just starting in his career, Zhang said he is always ready to learn something new. As a part of Gen Z, whose job focuses on innovation, he understands there is a great deal of work ethics and methods honed through years of experience before him. “These experiences and insights are the core and backbone of innovation,” Zhang added. “Likewise, the hope is as the younger generation, we are able to provide a fresh perspective and help meld those years of knowledge with the ever-evolving technology available.”

3. Know What Motivates Each Other

Each generation also values different aspects of work. Baby Boomers are traditionally known for valuing job security whereas the younger generation places value on having a work-life balance. “I think it’s good to have a fresh perspective for those of us in the older generation who were taught you come into work, put your head down and it doesn’t matter how hard it is to balance what you have going on outside of work,” said Erin Stammer, vice president of credit at PNW Railcars (Portland, OR). “Gen Z has also certainly leveraged the changes that came about in the pandemic. As an older generation, I think we’re pushing back for some sort of consistency and a lot of that is viewed as being fair across the board. With the younger generation being more about inclusivity and diversity, they are able to understand that.”

Some professionals say younger generations are typically motivated by money and opportunity growth in their career. “In my opinion, monetary compensation and benefits will always be king for the younger generation; however, we are still a lot more interested in fulfillment, work-life balance, culture and development opportunities,” said Zhang. “Especially with the availability of remote work, there has been a general shift to personal well-being.”

In the wake of a tumultuous economy and consistent interest rate hikes, more companies are under significant financial distress, struggling to pay debts and survive. This has given rise to “zombie companies”—businesses that are able to continue operating but are essentially insolvent and no longer profitable. Zombie companies serve as a chilling reminder of the complexities and challenges lurking within the economic landscape.

“A zombie company means they're dipping into their cash reserves despite having some strength in revenues,” said NACM Economist Amy Crews Cutts, Ph.D., CBE. “So, it's not a length of time, it's relative to how much they have in assets. A zombie company could be going through its assets very quickly with their chances of surviving diminishing by the day.”

According to CEPR, zombie firms accounted for 10% of all listed firms in 2021. But the percentage of companies in the U.S. considered a zombie company grew to 13% in 2022, according to Goldman Sachs. “What is special about the current environment is that zombification has been increasing over time, particularly since the global crisis and the COVID-19 pandemic,” reads the article. “In perfectly competitive markets, unproductive and unviable zombie firms would exit the market, allowing healthy firms to operate more efficiently, while promoting the entry of new productive firms. But, as the literature has documented, misaligned incentives on the part of lenders (banks, investors, or governments) allow zombie firms to avoid immediate default.”

Stimulus checks and relief funding during the pandemic kept many failing businesses afloat for longer periods, but now that safety net is gone, said Jeff Weber, director of credit at Uline (Pleasant Prairie, WI). “With consumers being more cautious in their discretionary spending, higher interest rates as a result of the Fed and banks or investors tightening up their lending standards, it’s created an environment for these zombie companies to now fail.”

Although the definition of a zombie company changes depending on who you’re talking to, its consequence remain the same—zombie companies slow economic growth, drain resources available for healthy companies and prevent investors from pursuing better opportunities elsewhere.

Signs You Have a Zombie Customer

Small publicly listed firms: These companies have lower return on assets, hold less cash and have lower investment opportunities than their non-zombie counterparts. “For private firms, the average zombie firm is comparable in size, but is less profitable and holds less cash than other firms. With the exception of asset size for private firms, the p-values of equality of medians for zombie and non-zombie firms indicate that these differences are not only economically large but also statistically significant,” reads a report by the Federal Reserve.

Interest-coverage ratio of 1 or less: Companies in that range generate only enough cash flow to pay the interest on the debt and are unable to reduce the principal amount. Therefore, they do not have excess cash or capacity and are stagnant, which means they are too weak to invest or grow. Or if their earnings before interest, taxes, depreciation and amortization (EBITDA) are less than their interest expense.

Slower payments or extending terms: If a customer is not able to service its debt, they will not be paying on time and will start asking for longer credit terms than previously arranged.

Withholding information: Companies that aren’t willing to share financials or refuse an account review may be hiding financial distress. “This could mean they are having financial difficulties and not sharing information for fear that if they show you, you won’t do business with them,” Cutts said.

Sudden acquisition of companies: If a company is acquiring a lot of other companies, they'll try to push off the debt on the acquired company instead of carrying it on their own books, said Esther Hale, ICCE, senior analyst and treasury-global credit at Phillips 66 Company (Bartlesville, OK). “A lot of zombie companies look to private equity companies for funds that don’t always have the company’s best interest in mind and may be looking to have an opportunity to take it over and keep the good parts and get rid of the dead weight. I had one recently that did that and took on too much debt. They are not bankrupt yet, but I worry about how much longer they can survive.”

What Creditors Can Do to Mitigate Risk

One of the ways credit professionals can mitigate risk with zombie customers is consistent financial statement review, especially for high-risk industries and customers, Weber said. “As well as monitoring liquidity, leverage and coverage ratios. For retailers, monitoring same store sales and how it is trending.”

The growing threat of zombie customers underscores the importance of ongoing credit checks, even for existing customers. Cutts advises that trade creditors use business information companies to their advantage when onboarding new customers. “You can do an account review directly with your client, but you can also do an account review behind the scenes with data providers that would indicate whether liens have been filed against the company, whether lawsuits have been filed against the company or there's been a management shakeup because that can also affect the reputation of the company,” she said.

Industry credit groups are also a useful resource so you can compare customer information with others in the same field of business. “Talk to other vendors that have a common customer and find out whether or not they're late with other customers and vendors,” Jason Torf, Esq., partner at Tucker Ellis LLP (Chicago, IL). “It doesn't necessarily mean that they're not able to service their secured debt, but it should help you find out what's going on and why they're unable to pay on time.”

Credit professionals are the investigators of the financial world. Asking questions will help you figure out where a company stands financially. Hale asks customers how they’re making money or acquiring business. “I also ask if there are multiple businesses and if they are integrating them,” Hale said. “Are they trying to make theirs bigger? Are they growing too fast? The larger the company, the larger the credit limits are extended to customers while the smaller the company, the smaller the credit limits. But no matter the size, knowing your customer will help them meet financial obligations and make sure you receive payment.”

Credit managers have a special skill that no other professional has—the ability to predict the future. But it’s not based on magic.

Credit professionals are involved in nearly every step of the order-to-cash process, which means they have a deep understanding of what is driving business and customer behavior. They are inherently forward-looking, as they are always concerned with the chances of getting paid in the future. It is up to the credit department to share this knowledge.

Since its inception in 2003, NACM’s Credit Managers' Index (CMI) has been a leading indicator in the business cycle. The CMI, a monthly survey completed by credit and collections professionals in the U.S., sounded the alarm for the Great Recession before any other economic indicator. The results reflect the entire cycle of commercial business transactions, providing an accurate, predictive benchmarking tool. “The CMI data will help you make better credit decisions and adds to the greater knowledge database,” said Gary Juliano, CCE, credit manager at ATI Specialty Materials (Monroe, NC).

Here are three reasons why you should be taking five minutes each month to participate:

#1 Timely Economic Forecasting

The CMI provides monthly, real-time results that can indicate the state of the economy up to six months in advance. “The CMI started showing weakness in the four months before the COVID-19 pandemic was declared,” said NACM Economist Amy Crews Cutts, Ph.D., CBE. “Unlike GDP that is revised three times by quarter-end, the CMI results tell you what is changing each month. From a policymaker's perspective or a business strategist's perspective, knowing what is changing in real-time is so much stronger than waiting until it has passed.”

Amy Higgins, CBA, credit manager at Zak Designs, Inc. (Spokane, WA) has taken the CMI survey every month for the last few years to see economic trends month-over-month for her receivables. “I like to compare the CMI results of last month to the current month and look for any red flags in the economy,” she said.

Creditors can use the CMI results to make more informed credit decisions and validate their gut feelings. “We’re usually a month behind the rest of the industry so seeing how other companies are performing helps us know what to expect,” said Cathy Klein, controller at Crystal D (Saint Paul, MN), who has actively participated in the CMI for almost 20 years. “When I see CMI results saying sales or payments are starting to decline, I know we’re going into our slower season. That’s when we ramp up our collection calls to stay ahead of the curve.”

#2 Gain Credibility with Upper Management

For publicly traded companies, the CMI is helpful in indicating macroeconomic conditions, especially when presenting for investor days and earnings announcements. For privately held companies who may be speaking to investors, the CMI could be helpful in demonstrating their company’s performance or outlook through the CMI results. “Overall, I think that credit managers—more than any other person in the company besides the CEO—have the best view of what’s happening in their company and their industry,” Cutts said.

The CMI can be a valuable tool when building a report to present to the C-suite. It also signals to upper management that you can be relied on for information. “The executive team meets weekly, and I present the CMI results to them, so they have an idea of what is going on,” Klein said. “It opens a good discussion about what’s going on in the industry and figuring out strategies to use moving forward. It’s also a good way to compare what we’re seeing versus the entire industry. With my AR department, we use it a lot as a reminder that we might be hitting our slow season where we must ramp up our efforts.”

By participating in the CMI survey, NACM members can gain CCE certification points. “Prior to getting the opportunity to take it, I didn’t know it was out there,” Juliano said. “It wasn’t until I got my CCE certification through NACM that I started using it. Now, it’s a valuable source of information like a credit reference that tells you if a customer is likely to pay or not.”

#3 Add Value to the Credit Profession

The more participation in the CMI, the more accurate the economic forecast will be. By participating in the CMI survey, credit managers add value and credibility to the profession with information only they can provide. “The idea that they have a small impact in the economy in relation to their firm is simply not true,” Cutts said. “Each response can determine the strength of economic activity and complements other economic data used by economists and policymakers. The more participation we have, the stronger the results are that indicate where the economy is headed.”

The CMI does not take long to fill out and acts as a valuable source of information even if you’re not trying to make economic forecasts. “Even if you have no intention of getting your certifications or are just unsure, just try it,” said Higgins. “Accumulate the roadmap points in case you decide to go after a certification. It’s also just a consistent way to review your business and to reflect the economy.”

Participate in the CMI every month for the next 12 months and automatically be entered to win ONE of FOUR $250 gift cards in 2024. Sign up to receive monthly CMI survey participation alerts. For a complete breakdown of manufacturing and service sector data and graphics, view the September 2023 report. CMI archives also may be viewed on NACM’s website.

The construction industry presents unique challenges for credit professionals due to its complicated nature. For example, credit professionals must assess the risk associated with multiple parties involved in a single project. Cash flows in construction often depend on project milestones and payments, making it challenging to predict when and how payments will be received.

Given these complexities, credit professionals in the construction industry must have a deep understanding of the industry's dynamics to effectively assess and manage credit risk. NACM’s Secured Transaction Services (STS) acts as an extension of your credit team to help manage the nuances of the construction industry.

NACM brings a member-centric customer service aspect by putting members’ needs first. The personal touch behind all services makes STS stand out from competitors. “We are engaged, we are focused and we are an extension of our members’ credit team,” said Jocelyn Vanlandingham, operations manager for STS (Columbia, MD). “Securing rights for our members is a top priority for us, so we handle and review every project as if it were our own.”

Some companies have worked with and used STS for more than a decade, establishing a strong relationship. Ricky Garcia, credit supervisor at Miner, LTD (San Antonio, TX) said his company has worked with STS since 2008 along with their management and staff. “STS works at a high level of consistency, promptness and professionalism,” Garcia said. “I believe this sets them apart from their competitors.”

The genuine passion to help credit professionals easily translates into the services STS provides to its customers. STS is managed by credit professionals, for credit professionals, said Anne Scarcella, CCE, CCRA, credit manager at Crawford Electric Supply Company, Inc. (Houston, TX). “The information is accurate, timely and important,” Scarcella added. “Customer service, reliability and reputation make NACM stand apart. The website portal is also very user-friendly and clear, and STS does a great job in the services they provide because each service is valuable for credit professionals.”

The STS Lien Navigator provides step-by-step time frames for all 50 states, D.C. and the Canadian provinces. The Lien Navigator contains links to statute references, quick list sections and "Speed Bump" warnings—cautioning users of nuances in the law. With a Miller Act section, public bond thresholds and values, and a robust glossary, the Lien Navigator serves as a comprehensive guide accessible 24/7.

Sherry Raposo, corporate credit manager at VSS Emultech (West Sacramento, CA) said STS has many years of experience in the construction field and preparing preliminary notices. NTO services are especially helpful to credit teams who experience high volumes. “The verification process with NACM’s STS is great because we get updates on when to act on jobs via their reminders, providing our customers with releases monthly,” Raposo said. “The NTO service is a one-stop shop and we can do all we need to do with the STS program. Not one job has ever been forgotten or overlooked by STS.”

With more than 100 years of experience, STS strives to fulfill all the needs of credit professionals in the construction industry. In addition to services such as NTO and the Lien Navigator, STS provides a lien and bond claim filing program along with deadline tracking, demand letters, bond payment investigation services, UCC filings and a waiver manager. “Protecting our lien and bond rights to leverage payment and establishing credit on construction projects have been very helpful in our construction credit decision making,” said Garcia. “The services NACM’s STS provides are essential to our credit department and we will continue to access their expertise in the construction industry.”

Because STS believes that they are part of your team, your work is their work. STS pays attention to detail, questions things that don’t look quite right and is always available to work with you so that together, the best credit decision is made. “We are a partnership service provider,” said Chris Ring of NACM’s Secured Transaction Services. “We consult with our member customers on a daily basis to provide best-in-class services and trusted guidance.”

For more information regarding NACM’s Secured Transaction Services, visit our website or contact STS representatives Chris Ring at This email address is being protected from spambots. You need JavaScript enabled to view it. and Jocelyn Vanlandingham at This email address is being protected from spambots. You need JavaScript enabled to view it.. You can also join our Construction Credit Thought Leaders Discussion group to connect and network with others in the industry.