Concern, vigilance and relationships. (2003 Best Article Award).(Rain Bird International)

Seneca said: "life is neither a good nor an evil, but simply the scene of good and evil." What I learned from my experience as a credit professional is that credit is also "neither a good nor an evil, but simply the scene of good and evil." Indeed, there is a beauty and a beast in every step in every decision taken by the credit professional. Hence, it is the role of the credit professional to bring out the good and accentuate the beautiful while protecting against the beast and mitigating the risks and the evil. Credit professionals recognize that every credit decision seeking a return encompasses a certain measure of risk; every benefit includes a cost. Therefore, we ask, what can credit professionals do to achieve the needed balance? First, there is a need to avoid overconfidence and complacency. Even when things appear to be stable, prosperous, bright and calm, the clouds of instability and insolvency can suddenly appear, causing gloom and financial collapse. Second, there is a need for constant vigilance and perpetual alertness and caution. Third, there is a need to keep close, cooperative and open relationships with every customer.

Let me share with you how applying these fundamentals permitted Rain Bird International (RBI) to deal successfully with a complex and sophisticated business environment--Latin America. Showing concern and humility, caution and vigilance, and working towards a close cooperative relationship can make Latin America a place of great opportunities and financial rewards. To reap the rewards, we need an intense focus on relationships. Relationships in a credit transaction can mean the difference between getting paid and not getting paid--between making a profit or taking a loss.

Argentina: it was the close, courteous and cooperative relationship with our Argentine distributors that allowed us to get paid within 45 days of the financial collapse that started unraveling in December 2001. In the beginning of December 2001, one of our distributors contacted his bank in Buenos Aires. He was informed that if he needed to pay his bills to foreign vendors, he had to change his terms from Open Account to Sight Draft and forward the documents to his account officer at the bank. Immediately, he called me and instructed me that we needed to follow his instructions "to the letter." We did, and we were paid in full. Next, we contacted all of our customers and informed them of what was happening. Due to our good and strong relationships, all agreed to accommodate us and change their terms, permitting us to get paid in full.

Chile: though it represents one of the most stable countries in Latin America, Chilean ...