Business Credit Principles

About the Program

Designed and written by fellow credit professionals, Business Credit Principles is essential for every credit professional. This comprehensive course covers all of the vital elements of business credit, including the role of credit in financial management, the components of effective credit department systems, specific government regulations that pertain to business credit, credit policy and procedures, selling terms, negotiable instruments, the Uniform Commercial Code, credit investigations, finance and business insurance, business credit fraud, factors associated with credit limits, and international trade, as well as bankruptcy codes and alternatives to bankruptcy.

The eighth edition of Principles of Business Credit has been strategically organized within six concepts:

• Part 1: How Credit Works
• Part 2: The Legal Aspectv
• Part 3: Extending Credit
• Part 4: Verifying Creditworthiness
• Part 5: Financing and Payment
• Part 6: Bankruptcy

Business Credit Principles is the perfect substitute or supplement to any credit department training program.

Program Overview

This 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:

• Chapter 1: Credit in the Business World
• Chapter 2: Credit in the Company
• Chapter 3: Organizing the Credit Department
• Chapter 4: The Credit and Sales Partnership
• Chapter 5: Legal Forms of Business
• Chapter 6: Legal Environment of Credit
• Chapter 7: The Uniform Commercial Code
• Chapter 8: Credit Policy and Procedures
• Chapter 9: Credit Applications
• Chapter 10: Terms and Conditions of Sale
• Chapter 11: Credit Investigations
• Chapter 12: Business Credit Fraud
• Chapter 13: Making Credit Decisions
• Chapter 14: International Trade
• Chapter 15: Financing and Business Insurance
• Chapter 16: Negotiable Instrument
• Chapter 17: Bankruptcy Code Proceedings
• Chapter 18: Bankruptcy Alternatives

Program Instructor

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 Chairman 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 Prerequisites

There are no prerequisites for this course though a basic knowledge of accounting principles is helpful.

General Information

The Certificate Sessions are conducted at the NACM headquarters located in Columbia, Maryland.

Find out how you can complete an NACM Certification Program requirement in one week.

Program Schedule

Day One

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.

Lunch Break

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.

Day Two

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?

Lunch Break

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?

Comprehensive Review and Mid-term Exam
This review and mid-term exam will cover the material presented in class on Tuesday and Wednesday.

Day Three

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.

Lunch in the Expo Hall

Day Four

IV. The Credit Decision - Financial Statements: Understanding Fundamentals of Financial Analysis – continued

Lunch in the Expo Hall

V. 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?

Day Five

Comprehensive Review and Final Exam

In order to give you sufficient time to take the final exam, we strongly recommend that your return flight be scheduled to depart after 5:00pm on the final day of the program or the following morning.

*Schedule is subject to change.