Not holding their breath: credit professionals gear up for a rough year.(Survey)

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The final months of 2008 suffered from no shortage of almost daily announcements of depressing or disconcerting statistics, analyses and overwhelmingly expensive solutions to the country's economic woes. News arrived in email subjects, banner headlines and increasingly convoluted three-dimensional TV news graphics, marking the current crisis as the largest one to take place in our interconnected media world as it exists today, and perhaps making some wish for a time back when they just weren't so well-informed.

In October, when many credit professionals sat down at their computers to fill out NACM's monthly question, "Looking forward to 2009, as a credit professional, what are your biggest concerns?" it was the facts of the global economic crisis as much as the unanswered questions that weighed heavily on their minds, with an overwhelming majority (88.1%) of respondents listing "the state and future of the economy" as one of their three foremost concerns. In their comments, many participants correctly predicted a change in leadership, lamenting an expected swing in the pendulum of regulation toward a more involved government, and many discussed an overall increase in workload and general stress from their increasingly taxing day-to-day responsibilities.

The October survey's second most popular answer was "slower payment due to tightened credit," with 75.4% of respondents choosing that as one of their foremost concerns for this year. Many others were distressed about compliance with impending or already enacted regulations, maintenance of competent staff and the perils of an unhealthy and inconveniently organized customer base, but despite the diversity of credit professional concerns, when all of the responses and follow-ups were distilled down to their very essence, one almost universal refrain seemed to rise to the surface: 2009 is going to be rough.

Clamping Down

Over the course of a post-survey investigation in November, many participating credit professionals revealed that their companies and departments had already begun shifting their strategy in anticipation of a slower payment environment for the coming year. "The key is being ready for the slow down," said one respondent of a manufacturer in Houston. "While the Houston economy remains rather strong, unfortunately you cannot say that about the entire country. With production slowing down at a rather rapid rate, I think we must be conscious of the fact that payments will slow down, too."

Some credit professionals noted that their company strategy was to rely on new methods in order to elicit payment from customers more easily, while others noted that their strategy merely consisted of clamping down hard on delinquent customers in order to let them know they mean business. "We generate a weekly listing of customers with invoices over 30 days old, give a call to each customer on that list to check on the status of the invoices, send letters and place future shipments on hold if the customer has invoices over 60 days old," said one respondent. "We're also offering credit card payments to speed up payments."