Business Credit Principles
About the Program
This intensive program offers a comprehensive look at the credit function. Upon successful completion, you should understand the role of credit in financial management, the components of effective credit department systems and procedures, specific government regulations that pertain to business credit, credit and policy procedures, selling terms, negotiable instruments, the Uniform Commercial Code, credit investigations, financing and insurance, business credit fraud, factors associated with credit limits, out-of-court settlements, and bankruptcy.
Program OverviewThis program satisfies a requirement for the Credit Business Associate (CBA) designation. Using the textbook, Principles of Business Credit, 8th Edition, published by NACM, participants will receive in-depth exposure to:
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Program Instructor
Program PrerequisitesThere are no prerequisites for this course though a basic knowledge of accounting principles is helpful. General InformationThe Certificate Sessions are conducted Find out how you can complete an NACM |
Toni Drake, CCE is the President of TRM Financial Services, Inc., a company specializing in consulting and outsourcing services in the area of business credit and collections. Ms. Drake launched The Connection Center in 2005, which focuses on training and education in credit and collections, including financial statement analysis, as well as in the areas of professional development. Ms. Drake has been a member of NACM since 1984, and began teaching CAP classes and various educational sessions in 1997. Ms. Drake served as the NACM National Chair of the Board in 2013. She is an alumni of the NACM Graduate School of Credit and Financial Management at Dartmouth College. She was awarded the Credit Executive of the Year Award by NACM-Southwest and was awarded the CCE Designation of Excellence Award by NACM National in 2008.Program Schedule
Day One
Day One – Monday
8:00 – 8:30am
Continental Breakfast
8:30am – Noon
I. Financial Overview
Credit in the Business World
- Discussion of the role of commercial credit in today’s society for the financing of goods and services.
- Discussion of the role of the Federal Reserve in expansion and contraction of the flow of funds.
- Legal aspects of the Consumer Protection Act and its effect on Consumer and Commercial Credit.
- Anti-Trust legislation.
Noon – 1:00pm
Lunch
1:00 – 5:00pm
Credit Policy
- Defining credit policy in relationship to company goals and objectives.
- Discussion of factors affecting credit policy.
- Establishment of company credit policy and procedures.
- Implementation of credit policy throughout the company.
Understanding Negotiable Instruments
- Elements of negotiable instruments.
- Understanding use of notes and drafts.
- Legal implications of a negotiable instrument.
5:30pm
Dinner at a Local Restaurant
All dinners are held at local restaurants. A variety of dinner choices is always available.
Day Two
Day Two – Tuesday
8:00 – 8:30am
Continental Breakfast
8:30am – Noon
II. The Credit Decision-Development
Decision Procedures
- What is a marginal account?
- Factors affecting the development of terms of sale.
- Understanding the three areas of terms.
- Uniform Commercial Code and its effect on terms of sale.
- Benefits of proper terms of sale on company.
- Use of guarantees and letters of credit.
- What is a bank line of credit, factoring, ordinary accounts receivable financing?
Noon – 1:00pm
Lunch
1:00 – 2:15pm
Legal Forms of Business
- Thorough study of legal forms of business structures—benefits and disadvantages of each.
- How should the credit grantor react to each form of business entity when establishing credit availability amounts?
2:15 – 5:00pm
Comprehensive Review and Mid-term Exam
This review and mid-term exam will cover the material presented in class on Tuesday and Wednesday.
5:30pm
Dinner at a Local Restaurant
Day Three
Day Three – Wednesday
8:00 – 8:30am
Continental Breakfast
8:30 – 5:00pm
III. The Credit Decision - Investigation
- Understanding the 5 C’s of Credit.
- Rethinking the credit application.
- Direct credit investigation.
- Indirect credit investigation.
IV. The Credit Decision - Financial Statements: Understanding
Fundamentals of Financial Analysis
- Auditor’s opinion statements.
- What is a balance sheet?
- What is an income statement?
- What is a statement of cash flows?
- Understanding financial ratios.
- Case Analysis—Utilizing all of the credit decision tools.
- Establishing the credit availability amount.
Noon – 1:00pm
Lunch
5:30pm
Dinner at a Local Restaurant
Day Four
Day Four – Thursday
8:00 – 8:30am
Continental Breakfast
8:30am – Noon
IV. The Credit Decision - Financial Statements: Understanding Fundamentals of Financial Analysis – continued
Noon – 1:00pm
Lunch
1:00 – 5:00pmV. Collection Procedures
Defining Collections
- Reviewing ongoing accounts.
- What is collection procedure? When does it begin?
- Collection policy.
- Use of invoice and statements in the collection process.
- How to deal with an overdue account at various stages of delinquency.
- Dealing with out-of-court settlements.
- Is it a bad debt?
Bankruptcy Code Proceeding
- What is a Chapter 13 Bankruptcy?
- What is a Chapter 11 Bankruptcy?
- What is a Chapter 7 Bankruptcy?
- How do we react to each?
Management Reports
- What reports are key and important?
- Who reads the reports?
- Understanding and interpreting reports to management.
- Are they necessary?
5:00pm
Study Session and Pizza Dinner
Day Five
Day Five – Friday
8:00 – 8:30am
Continental Breakfast
8:30am
Comprehensive Review and Final Exam
In order to give you sufficient time to take the final exam, we strongly recommend that your return flight not be scheduled to depart before 2:00pm on the final day of the program. Please do not plan on leaving the national office for the airport before 1:00 pm.
*Schedule is subject to change.
