The Waterbury Democrat., 1942-08-04

bliginess creditors are hampering tho war production program be- catlSe of the working capital prob- Iemg such delays develop for in- dustry, it was pointed out tonight by Henry H. Heimann, executive manager of the National Associa- ton of Credit Men, before the din- ner conference held in conjunction with the Summer Institute of Credit Management, which is being spon- sored on the campus here during the two weeks ending Friday. August 2, by the association and Babscn Institute of Business Ad- nninistrati0n.
 ''With restriction of credit of all types, and shortening of terms as regards private transactions, MT. Heinmann said, ti' is not too good Q commentary on government meth ods that in frequent instances bus iness creditors, awaiting payment of accounts from governmental agencies, are being delayed from four to six months.
 Definite Appropriations
 "As an aid to goverenment, busi- ness executives should make every effort to ascertain that the contract has been closed with an official who has the necessary authority, that all bids and invoices are fully prepared and promptly presented, and that there has been definite appropria- tion by Congress for the payment to be made under the contract.
 'The vast and nasty expansion Of government operations, the per- sonnel and other problems that de- velop, are not conducive to the smoothest operations. Delays are understandable in special cases or for certain periods, but the number of instances appears to be continu- ally growing. This involves not only delays in payment but also applica- ton of discounts long after the dis count period has passed.
 "Prompter payment of govern ment obligations for goods and serv- ices rendered would aid materially In alleviating working capital short ages and thereby expedite the war production program.
 Because industry's vulnerability to loss is growing, credit and finan- cial executives must not overlook the importance of reserves to meet present and postwar developments, MT. Heinmann stressed.
 Outlining means of building and investing such reserve funds for cur rent and postwar needs of industry, he said that "a consistent collec- ton policy with full consideration to tne importance of liquidating slower and marginal cases must be followed. Such a collection policy can be a great asset in increasing working ciptal, thereby aiding in the creation of the needed reserves.
 War Bonds for Reserves
 And for the investment of these reserves there is no better means than the utilization of War Bonds of the F and G. series, which are availtble to corporations and which have an investment yield, respec- lively, of 2.53 and 26 per cent an- nually."
 Emphasizing that ''the broad de- cisions as to credit policies that must be developed, in the face Of rapidly changing conditions during this emergency period, can be ex- tremely vital to the continued exist sncO of the credit executives firm, Mir. Heinmann said that "basic to any series of operating politices shere must be adherence to certain proven principles of sound credit management. certainly 1t is of prime importance today that the credit executives information, upon which he undertakes the credit transaction, be both timely and all inclusive.
 Likewise, 1t Is the duty of every credit executive today to review collection policies. He Is charged with guarding the nations profits and he must be -vigilant In his realization that profit Is not fully realized until the transaction has actually been paid for.
 ''There has been some easy ac- ceptance of certain practices as to discounts, datings, adjustments, and terms selling as being necessary evils. In each instance, today's credit executives must re-evaluate the advantages and disadvantages, and then plan a diplomatic ap- proach to the solution of such prob lems. It cannot be emphasized too much that diplomacy should not be a dodge to cover weak or inef- fectuaI or half-hearted approaches.
 Customer Analysis
 Customer goodwill is, of course, essential but the credit manager must realistically assay the value of his customers, MT. Heimann said.
 "If his firm has e restricted amount of production available for it's customers, he must consider the relative desirability of allocating 1t among both the good payers and the slow payers without discrimina- ton. or of giving the needs of those with the better credit record some additional consideration in recogni- ton of their cooperative attitude in the past.
 "This decision will necessitate study of such factors as postwar q mvM wwvAw w@w~wwwNYN