July 14, 2022



Annacaroline Caruso, editorial associate

The National Association of Credit Management has come a long way in the last 126 years. As the world of business credit evolves, so has NACM. At the national level, our mission has remained steadfast—to educate business-to-business credit professionals, provide career growth opportunities and create reliable credit information and content for our members.

But we can’t do that without your help! Whether you are a long time NACM supporter or you are new to NACM membership—take a look at the following checklist to learn about all the content NACM provides AND how you can participate:


✓ Webinars: Is there a topic you want to learn more about? Chances are an expert has already covered it with an NACM webinar! You can look through our webinar on demand recordings anytime to learn about leadership, business credit basics, credit risk and more.

✓ Knowledge Center: Sifting through content can feel overwhelming, but with your membership comes the ability to search through NACM’s books and publications via the Knowledge Center, read member researched topics and white papers, and the ability to watch videos.


✓ Poll question: Each week we ask a different poll question in eNews to learn about what you are experiencing in the credit field. It takes just one minute to participate with high impact results as your views and experiences become articles in future issues of eNews.

✓ Podcast: On Fridays you can listen to the latest episode of our Extra Credit podcast. Each episode contains a roundup of important business credit news and is roughly five minutes long. You can subscribe on Amazon Music, Spotify, or at our website.

✓ Blog: A new blog providing a snapshot of the U.S. economy is posted each Tuesday and Wednesday. You can receive email notifications by signing up here.


✓ Credit Managers’ Index: Since its inception, the CMI has been a startlingly accurate economic predictor, proving its worth most notably during recessions. The survey asks participants to rate factors in their monthly business cycle—such as sales, new credit applications, accounts placed for collections and dollar amount beyond terms. It takes a few minutes each month to answer the questions.

✓ Business Credit: Our magazine is published nine times a year and is available in print and online via an App created exclusively for members. Each issue contains an in-depth analysis about technology, credit analysis, risk management, leadership and so much more.

✓ Thought Leadership Groups: Join a discussion with fellow credit professionals each month on topics ranging from construction, metrics, technology, leadership and global credit. If you’d like to learn how you can become part of these thought-provoking discussions to further the collective knowledge base for credit professionals, contact Tracey Lerminiaux at This email address is being protected from spambots. You need JavaScript enabled to view it..

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CA Court of Appeal Affirms Bar on Recovery of Licensed General Contractor for Work Performed by Its Unlicensed Subcontractor

Cindy Lee, associate, Troutman Pepper

Most are familiar with California’s harsh penalty for unlicensed contractor work. California Business and Professions Code Section 7031 (Section 7031) bars any recovery for compensation for work performed by an unlicensed contractor under any theory of recovery “regardless of the merits of the cause of action.” Cal. Bus. and Prof. Code § 7031(a). It is well-established that subcontractors are covered by Section 7031 from recovering from owners and general contractors if not properly licensed. See Cal. Bus. and Prof. Code § 7026. However, in Kim v. TWA Construction, Inc., 78 Cal.App.5th 808 (2022), the California Court of Appeal, in a matter of first impression, expanded the effect of Section 7031(a) to bar a licensed general contractor recovering from an owner for work completed by an unlicensed subcontractor.

Factual Background

Couple and respondents Sally Kim and Dai Truong (collectively “Kim") hired TWA Construction, Inc. (TWA) to build a home in Los Gatos, CA (the Project) for approximately $1.6 million. There was no dispute regarding TWA’s licensure status. The Project required removal of a eucalyptus tree that straddled the property line between Kim’s property and the property of their neighbor. TWA hired an individual named Martin Hoffman (Hoffman) as the tree-removal subcontractor. TWA found Hoffman on a public advertisement site, commonly known as Craigslist, and did not verify Hoffman’s licensing status.

Hoffman began work on removing the eucalyptus tree, but a dispute arose regarding the tree with the neighbor. Later, Kim terminated their contract with TWA because Kim could not secure a construction loan. At the time of termination, Kim had paid $16,000 total to TWA.

The neighbor sued Kim and TWA for trespass, negligence, and damage to the eucalyptus tree. Kim cross-complained against TWA for comparative negligence, breach of contract, and express and equitable indemnity. TWA filed a cross-complaint against Kim for breach of contract. The neighbor settled with Kim and TWA, leaving the cross claims between TWA and Kim.

Before the trial, Kim filed a motion in limine, asking the trial court to require TWA to make an offer of proof as to the licensure status of Hoffman. Kim argued that tree trimming required a specialty license and if TWA could not prove that Hoffman was properly licensed, TWA should disgorge the $10,000 paid by Kim for tree-trimming services per Section 7031. The court granted the motion. The trial proceeded to jury verdict, and the jury concluded that TWA was 100% liable for the neighbor’s damages. The court entered judgment in favor of Kim and ordered TWA to disgorge the $10,000 paid by Kim for the tree-trimming services. TWA appealed.[1]


The Court of Appeal noted that TWA failed to present any evidence that Hoffman was licensed. Moreover, after analyzing the “statutory scheme” of Section 7031 and contractor licensing law generally, the Court of Appeal agreed with the trial court’s reconciliation of the legislative intent of Section 7031(a)—protecting the public from unlicensed contractor work—and its interpretation of Section 7031(a) to include a licensed general contractor who attempts to recover from an owner for work performed by an unlicensed subcontractor. The Court of Appeal reasoned that allowing a general contractor to recover compensation for performance of unlicensed work “simply because the work was accomplished by hiring a subcontractor, would circumvent the purpose of section 7031 and render meaningless the section 7031 bar and expansive definition of contractor to include work performed ‘by or through others,’ (§7026).” The Court of Appeal affirmed the judgment.

[1] On appeal TWA argued (1) that the court erred in granting Kim’s pre-trial motion in limine, (2) Kim’s indemnity claim could not stand because the contract did not include tree-removal, and (3) substantial evidence did not support the jury’s finding that the Kim paid TWA $10,000 to remove the tree. The court found that removing the tree was part of the contract by examining extrinsic evidence, and the jury finding was supported by substantial evidence in light of Kim’s credible testimony.

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How Do You Lead Decisively When You Just Don’t Know What’s Coming Next?

Karin Hurt & David Dye, Let’s Grow Leaders

You don’t know what you don’t know, and even what you do know could change. In a recent conversation, Joe, a senior leader in the assisted living industry, recounted his first days of the Covid crisis in what turned out to be an early hotspot.

“In those first few days, we had so little information about this virus or how it spread and no guidance on what to do next,” he shared. “The only thing we knew for certain is that our residents were the definition of vulnerable—so I told my staff, ‘Close the doors. No more visitors. Period.’ My staff warned that the families would be angry, he added. “Yes, they will but our primary mission is resident safety; I repeated to close the doors. I’m certain that early decision saved lives.”

A courageous culture needs clarity, knowing your values, understanding what’s at stake and being willing to lead decisively with the information you have at the time. And, staying curious and open as the situation evolves and being open to ideas of what must happen next.

5 Ways to Lead Decisively When You Don’t Know

When leading during times of uncertainty and change, it’s easy to feel like you don’t know anything. But you do. Start there.

    1. Ground yourself in your values. The most decisive leaders we know have a clear set of values that guide their decision-making. The wafflers are the ones who are more focused on optics or popularity than doing what is right.
    2. Stay focused on what matters most. Joe could act decisively because he knew saving lives trumped satisfaction ratings or anything else. Of course, he cared about his residents and their families. He understands the importance of quality of life and the need for human connection. All that matters, a lot. But in this moment, saving lives came first. In a time of crisis, being laser-focused on what matters is key when you have to make a quick, tough call.
    3. Make the best, next, small, bold decision. You don’t have to make all the moves to act decisively. Your equivalent of “shutting the door” doesn’t have to be for a month. But, 48 hours can buy some time to get more information. You can tell your team, “I don’t have all the answers. And our direction may change. But for today, this is what we’re going to do.”
    4. Show up with confident humility. We were talking with “Jane,” another healthcare leader who had been given an enormous responsibility for operational safety during the early Covid preparation.
      “I was given a yellow vest to wear which meant that if there was a tough decision to make, it was up to me to make the final call. Sometimes this meant I was being asked to make decisions in departments where I was not the functional expert. I had to show up confident, people needed to see that in their leader—but also incredibly humble, to ask a lot of questions of the right people and to really listen to their point of view, including watching the looks on their faces while I weighed options. And then take that information in to make the best rationale call.”
    5. Prepare for the pivot. We’re all living in a world where the news could change tomorrow. Leading decisively at a time like this also means being willing to remain detached from the decision and be ready to pivot when new information comes along. It’s okay to say, “Yesterday I said we were going to do this … and that made sense with what we knew at the time. And now we also know …. So, here’s what we’re going to do now and why.”

And sometimes, “Let’s wait and see” is also an appropriate answer when you just don’t know. Some decisions don’t need to be made right now. Deciding when to decide is also a decision worth making.

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Dos and Don’ts of Onboarding New Credit Staff

Annacaroline Caruso, editorial associate

Companies often spend extensive time, effort and resources during the hiring process to find the best fit possible for the job. But the work does not stop once a candidate accepts an offer—the onboarding process is equally as important to ensure a new employee is successful in their role.

“I don’t think people realize how important the onboarding process is, especially for [employee] retention,” said Amanda Buskill, accounts manager at Gexpro (Smyrna, GA). “If the onboarding process is chaotic, the new person will be looking for the door because they will be wondering when and if the chaos is going to end.”

According to a recent eNews poll, 46% of respondents describe their credit department’s onboarding process as meticulously detailed and documented, while 27% describe it as learning on the fly or loosely documented. An effective onboarding process can set a positive tone, improve performance and help new credit staff to quickly reach their full potential. But an unorganized or nonexistent onboarding process can waste a lot of time for both the company and any new employees.

Here are some dos and don’ts for building a successful onboarding strategy:

Do put everything in writing

Underestimating the benefits of how-to guides and standard operating procedure (SOP) documents can be a major pitfall when welcoming a new credit professional to your team. Before Buskill’s company merged with another, they had SOPs that covered roughly 90% of everything a new creditor might need to know, she said.

“But the company we merged with does not have any processes in writing and we regret that more than ever right now,” she explained. “It does not matter how intelligent your new employee is, how quickly they learn, or how much credit and collections experience they have; that first week or two they are thrown so much new information and no one can possibly remember it all.”

That’s where SOPs come in, but just throwing together any written guide isn’t enough, said Alaina Worden, CCE, credit and collections manager with CECO Inc., during an educational session at NACM’s 126th Credit Congress, How to Build Efficiencies in Credit. Those SOPs need to be detailed, updated and appeal to the eye. “Most of us don’t handle everything from A to Z in credit, so we need a guide that can stand the test of time when someone needs to take over. The better those documents look, the more weight they hold with people in the company and it helps to enhance the value of what that document was created for.”

Don’t forget company culture

Meeting other staff in and outside the office is equally important as learning the tasks at hand. So, the more staff you can get involved in the training process, the better, said Andreas Schmitt, director of group credit management at Rational AG (Landsberg am Lech, Germany). “Our onboarding process of course includes credit management elements, but we also really focus on introducing the new team member to our company’s way of thinking through what we call philosophy workshops.”

Schmitt’s onboarding process takes about six months, and includes various meetings with the accounting, internal sales and customer service departments. “The most important thing for our team members to learn, as someone who supports subsidiaries around the globe, is to know the people in the interfacing departments.”

Assign a topic to each employee so when the new hire has a question, they know who to ask. That way your new teammate is learning how to do the job while meeting their coworkers along the way—without overwhelming one employee with all the teaching responsibility.

Do remain flexible

The pandemic changed a lot of processes in the business world, including how companies onboard new employees. “Personal contact is really important for our job so over the last two and a half years, it has been difficult to onboard people virtually,” Schmitt said. “But we have to cope as much as possible.”

Schmitt’s company postponed some aspects on the in-person onboarding process until people started coming back to the office. For example, they are just now introducing new global credit professionals to the local credit professionals 15 months after hiring. “Of course, we would have preferred giving this opportunity at the start of their training, but better late than never.”

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  • Quick Loans for B2B
    Nancy Hannah, Esq., Partner and Attorney, Hannah Sheridan Cochran, LLP
    Duration: 60 minutes
  • JUNE
    3pm ET