November 2, 2023

NACM’s Credit Managers’ Index (CMI) fell 1.4 points to 51.2 in October. The CMI remains just barely in expansion territory above 50 and its lowest levels seen outside of a recession, said NACM Economist Amy Crews Cutts, Ph.D., CBE.

“Respondents continue to note the financial stress of their customers, asking for term extensions, falling behind on payments and asking for more credit than is warranted, which leads me to think we will see some downward revisions to the private domestic investment numbers in subsequent third quarter GDP estimates,” Cutts said.

The index of favorable factors fell 2.7 points to 55.9, led by a 6.1-point drop in sales. The sales factor index has been the most volatile in 2023 and is down 9.3 points from its recent high of 62.0 in June. “The sales factor index, while still in expansion territory, is greatly diminished from where it was in 2021,” Cutts explained.

Unfavorable factors fell for the fifth consecutive month in October, this time dropping 0.6 to 48.1. Dollar amount beyond terms led with a decline of 4.9 points to 45.6, its lowest level since April 2020. Accounts placed for collection deteriorated by 1.8 points to 45.6, its lowest level since February and the 17th consecutive month that the index has recorded a value below 50.

“While a few respondents have noted that recent months have been very good, the overwhelming concern cited this month is deterioration in customer cash management,” Cutts said. “Whether they are asking for more time to pay, or just ignoring invoices until they get sent to collections, respondents noted that stress is rising in their accounts receivables portfolios.”

What CMI respondents are saying

• “Our collections and past due receivables are roughly the same as last month but there is some slipping of payments and we are getting stretched more now than before, especially with smaller to medium sized companies.”
• “There are more requests for extended terms or delays in payments. Credit collection efforts are taking up more and more time in terms of the overall credit responsibilities.”
• “We are seeing the impact of deflation on some of our product lines. For example, the cost of vinyl gloves, carry-out containers and packaging is down steeply from last year. Units processed are up, but sales are lower (still up from prior year).”
• “More accounts are going past due for longer than 30 days.”
• “Small businesses are requesting greater credit lines than are supported.”
• “We are having issues with customers paying us that make pressure vessels like campers and boats.”
• “We are experiencing more credit card fraud in the past few months than prior.”
• “We deal with the AG/fishing industries, so this is the natural slow down for new orders, but there has been an unusual increase in AR collections.”
• “Supply chain backlogs are starting to ease.”
• “August was our best month in the history of the company and so that is the reason for the September sales drop off.”

Why should you participate in the CMI?

Complete the CMI every month for the next 12 months and automatically be entered into a drawing to win a gift card worth between $100-$250 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 October 2023 report. CMI archives also may be viewed on NACM’s website.

Every journey to success begins with education. Whether you aspire to secure a significant promotion, a raise or greater respect in the credit industry, it's crucial to demonstrate your dedication to your profession. NACM’s Professional Certification Program is a way for credit managers to elevate their careers and showcase their expertise. An independent study of NACM members revealed those who hold certifications average 6% higher salaries than those who do not, and many credit managers hold more than one certification.

Certifications also provide credit professionals with immediate industry recognition, which can open doors to new people and professional opportunities. Through shared learning in the Professional Certification Program, credit managers can develop important and lasting professional and personal relationships.

“What makes our program stand out is the strong network you build,” said Tracey Lerminiaux, director of education services at NACM National (Columbia, MD). “It's all about connections, mentorship and ongoing support. We're not just helping you earn a designation—we're helping you build a thriving credit career.”

Credit Business Associate (CBA)

The Professional Certification Program provides specific credit knowledge beyond what a collegiate degree can provide. It is a way for credit managers to showcase excellence and mastery for different disciplines in their field. For example, the CBA is an academic-based designation, which entails the mastery of three business credit-related disciplines: Basic Financial Accounting, Financial Statement Analysis 1 and Business Credit Principles.

It’s not just the subject matter that is specific, but the on-the-job experience that is often included in the course material. “The instructors are actually in the credit industry,” said Kevin Stinner, CCE, CCRA, credit manager at JR Simplot, Inc. (Loveland, CO), whose direct manager encouraged him in his designation journey for his CBA—eventually leading to his CCE. “So, when you have a question, they are speaking from a position of experience, not from a position of theory as what you get in a university.”

Certified Credit and Risk Analyst (CCRA)

The CCRA designation signals mastery in the analysis and interpretation of financial statements and the ability to make informed credit risk assessments. The prerequisites for this certification are: Basic Financial Accounting, Financial Statement Analysis 1 and Financial Statement Analysis 2: Credit and Risk Assessment. The CCRA is an advanced financial designation that can stand alone apart from your journey to the CCE.

Anthony Mitchell, Jr., CBF, CCRA, credit manager at Nutrien Ag Solutions, Inc. (Pittsford, NY) says his CCRA designation validates his 30 years of experience in credit. "There were a couple new skills that I picked up and I learned how I can do certain tasks differently, like my write-ups,” he said. “This was based on the material provided by the instructor and what we were given as our case studies for the final exam."

Credit Business Fellow (CBF)

Credit professionals are in a constant state of learning. After earning each designation, trade creditors are not only building their credit knowledge but refining their skills so that they can better adapt to any changes that come their way. Rebekah Hartley, CBF, CCRA, assistant credit manager at Helena Agri-Enterprises, LLC (Collierville, TN) recently earned her CBF, an academic and participation-based designation which illustrates that achievers are knowledgeable about and have contributed to the field of business credit by first having earned the CBA designation as well as having completed additional course work.

The designation’s focus on business and credit law has helped Hartley and her company during volatile economic climates. “When I started in this industry just three years ago, I never thought I would be getting a glimpse into the life of a lawyer, but the CBF designation has shined a light on how much that is the case."

Certified Credit Executive (CCE)

The CCE is NACM’s highest designation and is widely respected in the credit industry. CCE holders average 9% higher salaries than those without certification. CCEs are required to recertify every three years, further signifying their commitment to continuing education, self-improvement and the advancement of the business credit profession.

Getting certified in the credit industry isn't just about paper qualifications—it's about credibility. The knowledge and skills gained provide credit professionals with the confidence and the ability to advance in different aspects of their career. Earning the CCE designation, an executive-level designation with a focus on accounting, finance, domestic and international credit concepts, management and law was a rewarding accomplishment for Scott Woitas, CCE, CICP, senior manager credit and collections at Donaldson Co Inc. (Minneapolis, MN). “It gave me a better understanding of the subject matter, especially through the case study examples,” he said. “Now, I look forward to learning more as I tackle different roles for my company and that is very exciting for me.”

Certified International Credit Professional (CICP)

More and more credit professionals are based in or working with customers overseas. To keep up with the ever-changing landscape of global trade, credit professionals must sharpen their international credit and risk management skills, especially as the C-suite turns to the credit team for guidance on global trade. Credit managers have the knowledge to help their businesses thrive in an increasingly connected and modern global economy.

FCIB’s International Credit & Risk Management (ICRM) course is a 13-week course with a focus on global and credit risk management, available to entry-level and senior-level professionals. By passing the final exam, credit professionals can earn their CICP designation, signaling a mastery on credit management and risk analysis.

"Earning my CICP not only elevated my credit skills but gave me insight into country and currency risk,” Woitas said. “The best part was getting to interact with some of the students, both U.S. and overseas. I shared my experience with my boss, who took the CICP exam years ago, and he was amazed."

International Certified Credit Executive (ICCE)

CICP holders are also eligible to earn the ICCE designation, an executive-level designation created for international credit and risk analysis professionals who are ready to make an impact on the world stage by excelling beyond their CICP designation. ICCE holders are expected to participate in their associations by serving on committees, completing surveys and mentoring other credit professionals. They are encouraged to improve their leadership skills by serving as a panelist or speaker.

Colleges and universities don’t offer adequate education to prepare credit professionals for the rigors of the role, said Esther Hale, ICCE, senior analyst and treasury-global credit at Phillips 66 Company (Bartlesville, OK). “Attending the classes associated with certification provides a comprehensive education credit professionals are unable to access elsewhere.”

“The ICCE designation and international credit management in general through the Finance, Credit & International Business Association (FCIB) embraces the complexity of international trade along with credit and risk management essentials,” said Timothy Bastian, ICCE, senior director of corporate risk at Western Oilfields Supply Company dba Rain for Rent (Bakersfield, CA).

To learn more about NACM’s Professional Certification Program, visit our website or contact Tracey Lerminiaux at This email address is being protected from spambots. You need JavaScript enabled to view it.. You also may be interested in our upcoming Mentors & Milestones program on 5 Things to Kickstart Your Educational Journey. This is your last chance to participate in NACM Connect’s Compensation Survey. The deadline to complete the survey is Nov. 3 and participants will receive the results for FREE.

The U.S. economy remains resilient with robust job growth, steady consumer spending and strong GDP growth of 4.9%—all despite one of the most highly anticipated recessions ever. However, many factors continue to weigh on the economy and have the potential to offset the positives. A recent eNews poll revealed more than two-thirds of credit professionals believe a recession is around the corner if we are not in one already, while only 31% see the chance of a soft landing.

For credit professionals who see a smooth landing, the expectation stems from the ongoing growth in employment and consumer spending. “Unemployment is at a low right now that we have not seen for a while, inflation is seeming to slow down which I think will lead to greater confidence in the economy,” said Scott Dunlap, director of credit and collections at Coleman Oil Co. (Lewiston, ID). “We’re not out of the woods, but the indications are that the economy is improving.”

Andy Davidson, director of credit and accounts receivable at Masonite International Corporation (Tampa, FL) has seen a change in customer payment behavior that leads him to believe a recession is on the horizon. “Previously, customers were quick to pay within a discount period but they are now adhering to the term to hold onto their cash as long as possible.”

Customers in Distress

Although the previous macro-economic factors will affect some customers more than others, it is important to stay informed on the latest economic trends in order to mitigate future risk. According to the eNews poll, 20% of credit professionals surveyed said we are already in a recession.

“Some industries and geographic areas are already experiencing decreased consumer spending due to higher interest rates, surging oil prices along with the damage to domestic oil activities in several regions,” said Tammy Hamre, CBA, corporate credit manager at Cole Papers Inc. (Fargo, ND), who is experiencing increasing payment delays from customers with excellent payment histories. “The number of workforce strikes, crushing student loans and healthcare costs are impacting some industries more than others. But I believe that official recession declarations will happen well after some business sectors and geographical regions have experienced the impacts.”

Many credit professionals are seeing customers either selling or closing shop. “We have way more collection issues now and it is all related to recessionary pressures and inflation,” said Jon Hanson, CCE, CCRA, VP-director of corporate credit at OVOL USA (Carrollton, TX). “It’s a matter of seeing if they can continue to work through those pressures and mitigate that risk.”

Credit professionals are advised to practice due diligence, especially with high-risk customers. “We’ve already seen an increase in bankruptcies in the business community in nearly all segments of business,” said Kenny Wine, CCE, director of credit-South/East at Joseph T Ryerson & Son, Inc. (Little Rock, AR). “We are hearing customers complain about jobs getting pushed back and therefore they can’t pay until they are paid. Customers are asking for extended terms, thereby using the vendor as their bank. Their other option is to draw on their credit revolvers or asset-based lending and pay the bank a much higher interest rate than they have had to pay in the past.”

Overseas Geopolitical Conflict

The ongoing Russian-Ukraine war continues to have long-term effects on the global economy with “volatile and elevated commodity and energy prices, which exacerbated food shortages and stoked inflation in many regions across the world,” reads a press release from the United Nations.

Now, the Israel-Hamas war is likely to have a far-reaching impact as well, although it is too early to determine exactly how that will look. “We are going to wait a few more days to see how things evolve, but right now, it’s business as usual,” said Melvin Ucelo, CCE, CICP, global credit manager at Franklin Electric Co. Inc. (Fort Wayne, IN) during the Global Credit Thought Leaders Discussion. “Every order from Israel is being closely reviewed and decisions are made on a case-by-case basis because everything is evolving so quickly. But as of right now, we have not encountered any issues.” 

Ray Yarborough, CBA, CCRA, CICP, senior accounts receivable manager at Connexity, Inc. (Santa Monica, CA) said his parent company is based in Israel and right now it’s tough to have any communication. “We are having some delays in communication because sirens can go off at any time during a call and we are trying to close our books for Q3,” he said. “Emails are working better right now just because of the sporadic nature of what is happening.” 

Interest Rates

The Federal Reserve raised interest rates at an aggressive pace in 2022 and 2023 to tame scorching inflation. The key rate now sits at 5.4%, a four-decade high. “High interest rates have impacted the construction industry, slowing residential and commercial construction as well as supply chain companies that work for the construction industry,” said Barry Hickman, senior director of credit at Dal-Tile Corporation (Dallas, TX), who believes the U.S. is headed to recession next year. “As that happens, companies will begin to lay off employees, cut costs and shrink their operations. An increase in unemployment will decrease consumer spending at retailers and disrupt the overall economy.”

Labor Strikes

The rise in labor strikes these past few months has slowed production. For example, the United Automobile Workers (UAW) union went on strike for roughly six weeks, halting production at General Motors’ largest U.S. factory and taking a toll on profits. “I think the automotive industry could be the catalyst to push us into recession,” said Amy Cook, CCE, credit manager at McNaughton-McKay Electric Company (Madison Heights, MI). “A big chunk of the economy is the automotive industry so challenges in that sector can potentially slow the economy further but it’s too early to tell.”

The UAW was not the first union to strike this year. Workers from various industries—including railroad workers and writers—showed just how impactful strikes can be on the economy. The longer strikes last, the more difficult it's going to be for those companies to produce their products, build their inventories and service their customers. “At some point, both sides will get together and carve out some longer-term deal,” Hickman said. “But there's a lag when this happens before they're able to resume production. Automobile prices are also rising, adding more pressure and demand on the used car market.”

Customer payment portals have become a seemingly permanent aspect of B2B trade with the growth of the internet and technology. These portals, such as Ariba or System Applications and Products in Data Processing (SAP), make it easier for the customer but often more difficult for the credit department.

“After making a credit decision, we make sure the division that will be selling to the prospective customer is aware that the company is wanting us to use a portal,” said Nate Yagle, vice president of credit at Premier Companies (Seymour, IN). “There is always a cost, whether a fee, labor or time, that is involved with using the portal. The credit department needs to make a decision as to if there is enough volume and revenue from the deal to make it make sense and cents. Our credit department doesn’t actually log in and submit invoices to these portals. It is up the department’s administration team, so ultimately, we leave that decision to them.”

One common challenge between portals and credit managers is the additional manual work that goes into the process because of technical issues. Glitches or compatibility issues with certain devices can hold back the ability for customers to make their payments or update account information. Chelsea Hirn, credit operations manager at KGP Companies (Faribault, MN) said one of the biggest concerns her team comes across is with the technical side of portals. Some portals are not very user-friendly, she explained.

“Certain portals are difficult to navigate in the sense of either taking a long time to load or having to be extremely particular with inputting information. If you’re off by one penny because of a rounding issue, it can jam up hundreds of invoices,” Hirn said. “Sometimes, Ariba won’t even let you input an invoice, it will reject it right away so you can’t get it in and you also cannot backdate invoices.”

In any instance of a technical issues or system glitches, it is important for your IT department to be on standby, especially working with customer portals. “Our IT department is very helpful in retriggering lost information, especially if they’re EDI,” Hirn added. “It is vital that we have stuck close to our IT department and have a great relationship with them because they are fully aware of issues with portals that can potentially happen.”

In addition to having your IT team on standby, it is a good idea to monitor the account and get to know your customers. Know the ins and outs of how different customers have different setups and how the setups coincide with your customers’ preference of receiving their invoices to be overall more effective.

Some credit professionals have turned down customers who have requested to use portals because the cons outweigh the pros. Portals are customizable, which is great for the customer who makes those changes; however, it leaves credit departments with little-to-no control on the process of invoicing.

“If you put this responsibility on your inside sales team or an admin in operations, they don’t care whether an invoice gets paid or not because it doesn’t impact them,” said Anne Scarcella, CCE, CCRA, credit manager at Crawford Electric Supply Company, Inc. (Houston, TX). “We do push back on portals that are very expensive and we negotiate with the customer on who will pay the extra fees that are based on the dollar amount of the contract in advance. Knowing about portals before going in is very important when doing your customer setup process. You must know if this is a customer that requires that kind of handling.”