eNews February 4


In the News

February 4, 2021


NACM’s January Credit Managers’ Index
Soars in the New Year


Andrew Michaels, editorial associate

NACM’s January Credit Managers’ Index (CMI) just might be the bellwether of an economic resurgence for 2021. Its combined score reached 59.7—a result not seen since March 2006.

Despite the unprecedented declines in the manufacturing and service sectors early last year, NACM Economist Chris Kuehl, Ph.D., said both sectors are recovering at a quick pace. Kuehl attributes the recovery to the increase in business and consumer confidence related to vaccine distributions and reopening efforts.

January’s combined score jumped 1.9 points over the December 2020 reading of 57.8 and 1.3 points more than the previous high score of the past year recorded in October 2020.

Unlike the Great Recession when the financial and credit sector took a long time to recover, the reactionary COVID-19 declines were fast and steep, while recovery is quickly rocketing back up, creating a V-shape recovery versus the former’s U-shaped recovery, Kuehl said.

At the start of the pandemic, the combined CMI score plummeted from 56.2 in February to 49 in March and then to 40.6 in April—the lowest it has been since the start of the pandemic, but still slightly better than the 39.7 reached in Jan. 2009.

“All of the CMI score categories are now above 50,” Kuehl said. “To me, the numbers signify confidence in growth as we get into the second and third quarters of 2021.” Scores over 50 are considered expansion; while scores under 50, contraction.

Combined favorable factors soared four points in January to 69.7 compared to December’s 65.3. Sales had the most significant increase from 70.2 to 75.9, followed by amount of credit extended, which grew from 65.3 to 69.2. New credit applications and dollar collections also saw gains of more than three points, scoring 67.8 and 66, respectively.

“On the manufacturing side, companies delayed capital investment last year because of all of the uncertainty,” Kuehl said. “Now, they’re getting back into it. On the consumer side, people are still buying stuff. And we’re still seeing service sector companies trying to anticipate what’s going to happen later in the year.”

With an overall score of 53, combined unfavorable factors increased half of a point in January—three of the six unfavorables decreased no more than 0.3 points. Dollar amount beyond terms and accounts placed for collection improved by more than a point, going from 57 to 58.9 and 51.6 to 52.9, respectively. Rejections of credit applications also rose from 51.3 to 51.6.

Meanwhile, the disputes category fell by 0.3 points from 51.2 to 50.9, while dollar amount of customer deductions and bankruptcy filings each fell 0.2 points from 51.3 and 52.3. Disputes measure the formal disagreements between creditors and credit issuers, and the decline is potentially related to companies that remain nervous about consumers guarding their cash flow—the worst enemy for a credit manager, Kuehl said.

Kuehl predicts January’s positive CMI results are “an indication of things to come.” Check out the full report for January.


FCIB Webinar: How to Improve Your DSO: Ramp-up Your Collection Cycle - Feb 2, 2021


Commercial Chapter 11s Up 29 Percent,
More Stimulus on the Way


Diana Mota, Managing Editor

More stimulus appears to be on the way. On Tuesday, the U.S. Senate passed a motion along party lines to advance President Joe Biden’s $1.9 trillion coronavirus relief proposal through budget reconciliation, which would allow it to pass with a simple majority vote.

“These actions were necessary in order for Democrats to pass a COVID package with Democratic votes only,” said Ross Arnett, senior associate of government relations at Pace Law LLP. “Even the 10 most moderate Republicans could only support a $600 million COVID package, less than a third of what Democrats view as the minimum.”

Moving forward, each committee will be responsible for identifying priorities within its jurisdiction for inclusion in the overall stimulus package, Arnett said. Afterward, Democrats would have the opportunity to bring the combined package to the floor to pass by a simple majority.

“The move advanced the two-track strategy that Mr. Biden and Democratic leaders are employing to speed the aid package through Congress: show Republicans that they have the votes to pass an ambitious spending bill with only Democratic backing, but offer to negotiate some details in hopes of gaining Republican support,” the New York Times reported.

“The timeline for this is three to four weeks at the shortest, but most likely mid-March,” Arnett estimated. “This is far from a guarantee that it is happening because Democrats both need to make sure they don't lose the more moderate members of their Caucus and they make their package conform to special rules that allow them to pass it by a simple majority.” They have a lot of technical work ahead, Arnett added.

“Continued government relief programs, moratoriums and lender deferments have helped families and businesses weather the economic challenges over the past year resulting from the COVID-19 pandemic,” said Amy Quackenboss, ABI executive director.

Commercial Chapter 11 filings increased 29% during calendar year 2020 as the total of 7,128 climbed past the 5,519 recorded in 2019. This is the highest filings total since the 7,789 registered in 2012, according American Bankruptcy (ABI) and Epig data.

Total bankruptcy filings decreased 30% year-on-year as the government and lenders offered stabilization measures in response to the economic challenges resulting from the COVID-19 pandemic.

Total filings fell from 757,634 to 529,071. The year-on-year drop is the second-largest percentage decrease since the 70% decrease recorded in 2005-06. That decrease was the result of the implementation of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which prompted total bankruptcies to rise to 2.1 million ahead of its enactment then fall to 617,660 total filings in 2006, the American Bankruptcy Institute (ABI) noted.

Consumer filings in 2020 were 496,565 nationwide, 31% fewer than the 718,584 total filings during 2019 and the lowest since the 495,553 filings registered in 1987. Chapter 13 filings decreased 46% as they fell to 152,828 from the 282,712 registered the year prior. Commercial filings also declined, as the 32,506 business filings represented a 17% drop from the 39,050 recorded in 2019.


NACM Secured Transaction Services | We take pride in handling your projects.


How to Tell When Your Managers Are Conflict-Averse


Marlene Chism

If in your organization, there’s a high-conflict person causing disruption where team members walk on eggshells, their boss may request coaching for the high-conflict individual. Before saying yes, consider that the problem has not been accurately defined.

There’s only one reason the high-conflict person does what they do: It works. And the reason it works is because the manager of the high-conflict person has refused to have a difficult conversation.

Here are three signs that indicate conflict aversion, the dysfunctional mindset, the needed mind shift, and the key to success:


Leadership behavior is intricately linked with identity. Many leaders identify with being nice. Switch the word nice to amicable or even-keeled, and those terms define an identity that is measured by likeability. The only problem is when a manager’s need to be liked overrides the decision to be respected. That leader simply nods in agreement, appeases or moves the chess pieces around to compensate for the drama—anything but initiate a conversation that might trigger anger or other uncomfortable emotions.

  • The dysfunctional mindset: Recently a client said to me, “I just had a conversation as you suggested, but it wasn’t good.” Her mindset was that if the employee becomes angry, hurt or offended, then it must have been a bad conversation. I told her, “Not necessarily.” The sign of a good conversation is when the behavior changes.
  • The mind shift: Shift from the desire for comfort to the desire for courage. In difficult conversations, both manager and employee will experience some discomfort. When it comes to growth, comfort is not a requirement, but courage is.
  • The key: Don’t set out to embarrass, teach a lesson or check the box. Own the part you played in allowing poor performance. Set the intention to help that individual grow, and provide the tools for course-correction and accountability.

Anger and Resentment

Taking employee behaviors personally leads to strong emotions. A high-level leader reached out, asking whether she should just lower her expectations of nonperformers. Her issue was that she was trying to be less critical and less judgmental. In her mind, some of her employees were simply not achievement-oriented. The problem wasn’t her anger; it was her assumptions.

  • The dysfunctional mindset: The belief that the employee isn’t ambitious, doesn’t care or isn’t willing closes off curiosity and investigation. If the leader believes assumptions, anger and resentment quickly follows. Anger isn’t the problem. The problem is in faulty assumptions.
  • The mind shift: The mind shift is to understand that performance and behavioral issues are rooted in one of five areas: clarity, priorities, resources, skills or willingness.
  • The key: Think like a consultant and question assumptions. You must listen to the reasons (or excuses) an employee gives you for the purpose of pinpointing the root issue. If the problem is clarity, priority or resources, it’s the manager’s job to offer coaching or assistance. If the problem is skill, then it’s either an issue of training or an issue of poor hiring practices. You can fix every problem except for willingness.

Digital Communications

Email and texting have made avoidance and aggression easier than ever. Many leaders today hide behind the safety of email rather than confront an important issue up front and in person. (I’ve been appalled at texts and emails I have seen going back and forth among colleagues and business partners.)

When I coached one party to stop emailing and request in-person or phone conversations, the tone and the game totally changed.

  • The dysfunctional mindset: Busy leaders often think that email is fast and helps get the issue off the plate. What they haven’t considered is the emotional toll and time spent fixing problems and misunderstandings that could have been accomplished with one phone call.
  • Mind shift: When in doubt, pick up the phone. There is a difference between efficient and effective. Efficient but not effective only creates inefficiency in the end.
  • The key: Use the phone or face-to-face meetings when the conversation is complex, sensitive or emotional. Digital communications are for reminders, meeting invitations, facts and nonsensitive issues.

If there are performance problems, workplace drama or disruptive behaviors in your workplace, it’s because it’s been allowed. Avoiding difficult conversations causes a culture of dysfunction that affects every aspect of business.

Marlene Chism is a consultant, international speaker and the author of "Stop Workplace Drama" (Wiley 2011), "No-Drama Leadership" (Bibliomotion 2015) and "7 Ways to Stop Drama in Your Healthcare Practice" (Greenbranch 2018) and an advanced practitioner of Narrative Coaching. Article originally posted via SmartBrief. Reprinted with permission.


FCIB Webinar: How to Improve Your DSO: Ramp-up Your Collection Cycle - Feb 2, 2021


UK and EU Agree to Trade Deal


Carole Welch, Corporate Communications and Marketing Manager, U.K. & Ireland, Atradius

The United Kingdom’s withdrawal from the European Union was completed Dec. 31 when the transition period came to an end. Following extensive bi-lateral discussions between the U.K. and the EU regarding their future trading relationship, a free trade agreement was finally achieved just days before the final deadline, thus avoiding automatic default to WTO trading terms for intra U.K./EU trade.

The trade agreement alleviates a long period of uncertainty and compared to the alternative of “no deal” represents a positive outcome. However, the “good news” is somewhat tempered by the attendant economic costs and the resultant logistical challenges for trading firms. Further, a number of areas within the negotiations are not addressed by the agreement.

The free trade agreement provides for tariff-free bilateral trade in goods and also has provisions on issues such as security cooperation. However, little is arranged for services, which cover 80% of the U.K. economy and 45% of overall U.K. external trade. The U.K. had to make important concessions on the money it owes to the EU, on the Irish border and EU demands for a level playing field. On the other hand, the U.K. achieved its demand of keeping the European Court of Justice out of the trade deal. Both sides had to make concessions on the politically sensitive dossier of fishing rights, with outcome leaving areas of concern for the fishing industry.

Meanwhile, changes to customs practices deliver additional challenges for exporters and importers across all industries and there will inevitably be disruption and increased bureaucracy, for example, country of origin relating to assembled goods is a significant issue. Delays at ports began in December albeit that travel restrictions related to the pandemic exacerbated the position. The short crossings from Kent saw a sharp fall (50%) in traffic in the post-Christmas period, while the volume of traffic crossing from/to U.K. ports during early January has been lower than the average recorded for the same period in 2020. Concerns over logistics in the longer term remain, with businesses reporting difficulties with access to transit documentation and the U.K.’s custom’s authority (HMRC) conducting a review into software issues. However, customs delays are only part of the story, with the need for haulers to present a negative COVID-19 test also contributing to the overall picture.

The full economic implications of Brexit are also overshadowed by the continuing impacts of Covid-19, particularly in the U.K. but across Europe also. With the virus still affecting large swathes of the population, containment measures continue to impact economic activity on both sides of the channel. However, extensions in government support measures continue to obscure forecasts, with the true impact of the pandemic yet to be evidenced in insolvency figures. GDP growth in the Eurozone is expected to rebound only partially this year to 4.2%, after a very deep recession in 2020 (-7.1%). In the U.K., after a 10.9% contraction in 2020, the U.K. economy is likely to see a relatively modest economic rebound of 4.2% in 2021. U.K. business investment is expected to expand moderately in 2021, after a steep contraction in 2020. The negative effects of higher trade barriers will be larger for the U.K. than for the EU in total. Nevertheless, a number of European countries have close trade and investment linkages to the U.K. Ireland and Norway stand out in terms of exports, while the Netherlands stands out in terms of foreign direct investment. Luxembourg, France, Germany, Spain, Switzerland and Belgium also have close investment linkages with the U.K.

The Covid-19 legacy together with post Brexit trade frictions will likely lead to a sharp rise in insolvencies in the U.K. in 2021. Similarly, we can expect to see a rise in business failures throughout most of Europe in 2021, albeit at a more moderate rate, with those countries with the closest trading ties to the U.K. more likely to be at risk, for example Ireland. The impact on insolvencies for other important trading partners, such as Belgium, the Netherlands and Denmark, as well as the rest of Europe, is expected to be visible but more limited. However, the climate remains volatile. Industry sectors with strong reliance on exports to the U.K., such as automotive, textiles and high-tech goods can be expected to be more significantly impacted.

While the overall economic outlook remains subdued, individual businesses continue to report success stories and the opportunity for trade growth, both during and beyond the transition period, should not be underplayed. One of the keys to success is a robust risk management strategy that combines access to reliable business intelligence to enable informed decision making and the ability to protect the business from trading risks.


Unlimited Webinars for One Year!


Upcoming Webinars


Feb 9
11 AM ET

How to Reduce Supplier and Buyer Friction

Speaker: Chris Doxey, CAPP, CCSA, CICA, CPC
Doxey Inc., Paeonian Springs, VA
Duration: 60 minutes


Letters of Credit Series:
Roles and Responsibilities of Banks
in the Payment Process

Speaker: Richard “Chip” Thomas
General Manager, American Export Training Institute, West Chester, PA
Duration: 60 minutes

Feb 11
11 AM ET


Feb 16
11 AM ET

The Power of Procure to Pay (P2P) Metrics and Dashboards

Speaker: Chris Doxey, CAPP, CCSA, CICA, CPC
Doxey Inc., Paeonian Springs, VA
Duration: 60 minutes


Project Management Principles
That Drive Continuous Improvement

Speaker: Chris Doxey, CAPP, CCSA, CICA, CPC
Doxey Inc., Paeonian Springs, VA
Duration: 60 minutes

Feb 17
11 AM ET


Feb 17

North Carolina:
Notice to the Lien Agent vs. Notice of Subcontract

Speaker: Chris Ring
NACM’s Secured Transaction Services
Duration: 30 minutes | Complimentary


Letters of Credit Series:
Letter of Credit Documentation:
How to Avoid Discrepancies

Speaker: Richard “Chip” Thomas
General Manager, American Export Training Institute, West Chester, PA
Duration: 60 minutes

Feb 18
11 AM ET


Feb 18
11 AM ET

Author Chat:
Connected Leadership

Author Francis Eberle, Ph.D.
Duration: 90 minutes │ A benefit of NACM, CFDD & FCIB membership