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For AR Success, Participate in Your Industry Credit Groups

Originally Published: April 2014


FOR AR Success, Participate in Your Industry Credit Groups

Source: Managing Credit, Receivables & Collection, IOFM, July 2012

In a business climate characterized by volatility and growing risk, AR and credit pros need-more than ever-to thoroughly assess the creditworthiness of current and potential customers, something that is by definition a moving target.

This is one area where there’s definitely strength in numbers. If hundreds or even dozens of trade vendors in the same industry are able to systematically pool data on the financial health, payment practices, and default risk of thousands of customers, AR departments are the clean winners. The is exactly what happens in an Industry Credit Group.

Credit Group Value Proposition

The value of belonging to an Industry Credit Group is illustrated by the fact that there are well over 1,000 currently operating the in United States alone.
These organizations not only pool credit knowledge and payment history regarding customers, making it available to members on a timely basis, they also hold regular meetings at which members can exchange experience in person. Some supplement these meetings with online forums. Most groups are industry-based but may also be further subdivided by region.

How Credit Groups Work

The way most Industry Credit Groups work is by their members regularly supplying AR and other credit data to the group. This can occur via FTP upload to a secured site with password access, which eliminates manual entry.

The group data manager then complies the data and distributes it to members, who can choose to print out of download reports relevant to them. Data is often available to members 24/7, since it can be accessed from the secure site instantly- allowing AR and credit pros to make faster, more informed decisions or get advance notice of likely payment problems.

Industry Credit Groups typically provide more relevant and timely information than reports from the larger credit agencies, giving their members an added competitive edge.

In addition, many Credit Groups feature added services, including risk alerts for urgent information. The majority of groups meet regularly (annually, biannually, etc.) to review their customers’ accounts. Educational seminars and peer networking opportunities are often incorporated into such meetings.

To avoid breaking antitrust laws, Industry Credit Groups are strictly overseen and supervised. Groups zealously protect the confidentiality of their members’ customer relationships. Most groups have sanctions for any member found abusing its memberships, and generally members cannot obtain lists of a competitor’s accounts.

6 Credit Group Sponsor-Managers

Industry Credit Groups are typically sponsored and operated by larger organizations, including the following:

  1. National Association of Credit Management (NACM). No fewer than 750 NACM Industry Credit Groups (www.nacm.org/industry-credit-groups.html) are sponsored by NACM, its affiliates, and NACM-Canada. Some 200 of these are national in scope. You must be a member of NACM to access individual groups to learn about them.

  2. Riemer Reporting Services. Riemer Credit Groups cover a wide variety of industries, from automotive to sporting good and from electronics to hearth products. Most of the 1,500 member companies are manufacturers or exclusive national distributors. For a full list of associations: www.riemer.com/new2rrs/ListAssoc.php.

  3. Inet Credit Exchange (ICE). ICE Industry Credit Groups (http://www.inetcreditexchange.com/home/industry_trade_groups.htm) have been pioneers in pushing the efficiency of Industry Credit Groups well beyond their traditional roots. Groups that partner with ICE obtain the following benefits: unlimited credit reports members can pull at any time; automated data feeds from members to ensure accurate AR information; online risk alerts to identify troubled accounts quickly; and easy access via the Internet for both database access and updating data.

  4. FCIB (Finance, Credit & International Business Association). International is even riskier than domestic business, so belonging to FCIB Export Industry Credit Groups (www.fcibglobal.com/members-only/exprot-industry-credit-groups.html) delivers special value. FCIB, the international subsidiary of NACM, sponsors and supervises a number of industry-specific groups that allow AR and credit pros to share information on mutual customers and analyze current trade and collection issues, country by country. Later this year, FCIB will launch group-only portals for group members, enabling online conversations to complement the semi-annual, in person meetings.

  5. ABC-Amega Inc. ABC-Amega Industry Credit Groups offer a complete range of credit exchange services geared to the specific needs of members. Along with managing the group’s credit information database, planning meetings, and facilitating AR clearance sessions, ABC-Amega provides monthly educational resources, including a newsletter and webinar series, in addition to maintaining individual group websites.

  6. ICTF (Association of International Credit and Trade Finance Professionals). ICTF International Industry Credit Group (www.ictfworld.org/?page=IndustryCreditGroups) members have access to advanced online trade exchange experience platforms and benefit from the ICTF staff expertise. ICTF Groups provide 24/7 online trade exchange experience platform, instant access to customer credit information, ability to send and receive alerts from fellow group members, face-to-face meetings, and access to a monitoring attorney.