Deborah Montgomery, President of Larr & Associates, has more than 20 years of international letter of credit preparation and processing experience. Starting as a one-person self-employed small business twenty-one years ago, the company now has seven offices with highly qualified processors, and it does business with several large Fortune 500 companies as well as many mid-size firms just starting to export. Larr & Associates assist exporting companies from start to finish streamlining their letter of credit process by presenting clean LC documents to the bank resulting in swift payment. The company has helped numerous customers reduce their accounts receivable days outstanding by presenting documents that are compliant with LC terms and conditions.
We recently spoke with Deborah about her experience as a leader in the credit field.
AA: How did you get into the credit field?
DM: Living in Brazil and Mexico during my middle school and high school years, sparked my interest in international business. I was first introduced to export documentation while working for an international freight forwarder in college. Upon graduation, I accepted a job working with a small company that processed International Letters of Credit and Cash Against document presentations exclusively for the freight forwarding industry. After three years of working with this small company, I approached the owner asking about branching the business out to working directly with the export companies as well as the freight forwarding industry. Unfortunately, the owner did not have that same vision, so I left the company and started my own business. My intention was, and still is, to educate export companies on the business practices of International Letters of Credit and Cash Against Documents.
AA: What challenges have you faced in this industry?
DM: We are a niche type of business, so it is challenging explaining to companies what we do since many are not aware of this method of payment. My staff and I have a strong desire to help U.S. companies understand the advantages of using Letters of Credit to help them collect their money when negotiating overseas deals. Many U.S. companies do not have a solid understanding of Letters of Credit and Cash Against Documents; therefore they do not promote training their employees on how to utilize these trade practices.
AA: Are you engaged in any programs or initiatives to bring more females into the field?
DM: Due to the fact that we are a unique niche type of business, we do not have specific programs in place to draw more females to the field. However, we help promote dialogue when we are networking at training seminars and events.
AA: What are some of the ways that the industry has changed over the years?
DM: The UCP 600 publication is a set of rules governing documentary letters of credit – their issuance, verbiage, interpretation, and negotiation. This publication is now on the 5th revision. Each revision has helped to improve the understanding of how banks review and negotiate documents. With each revision comes a clearer, more streamlined approach to presenting documents that comply with the language of the Letter of Credit. The banks also now use the UCP Companion: The International Standard Banking Practice for the Examination of Documents under Documentary Credits (ISP98), ICC Publication for reviewing documents.
AA: In what ways do you feel the industry could or should improve?
DM: Many companies shy away from Letters of Credit because they have a reputation to be cumbersome and nearly impossible to present documents without discrepancies. When exporters develop their international policy for handling letters of credit then educate their overseas customers on the benefits of sticking to the 14 major points within the LC, this makes the process much more manageable. Any company that plans to sell overseas should have the basic idea of what a Letter of Credit is and have a system in place to be ready to accept this type of payment method from their overseas customers. We have found that U.S. companies who are open to negotiating their international payments through a Letter of Credit are actually opening up their customer base since these customers can finance the sale through a Letter of Credit with their bank.
AA: What are the biggest challenges you face as a credit professional in your industry?
DM: Educating U.S. companies that Letters of Credit do not have to be feared. When executed correctly with the help from us, a good bank and a good freight forwarder these can be a secure method of payment.
AA: What advice would you give to someone who is thinking about getting into this industry?
DM: It is important to know how each party operates when LC’s are involved. The exporting company has a role, the freight forwarder and the bank each has a role in the process. Learning from each of these parties helps to better understand this process. We find it to be fascinating yet challenging work that continues to be relevant today since the rules and regulations continue to be updated.
About Larr & Associates:
Larr & Associates LLC is a professional export document service company specializing in consulting and preparing letter of credit documentation and draft collection paperwork. Since its inception, they are committed to providing exceptional, individualized export documentation services to its clients. Larr & Associates works as a liaison between bankers and shipping agents to get documents reviewed, prepared, and submitted to the banks for payment.
You can read about other incredible women in the financial and commercial collection industries in our Women In Credit articles.