Reynolds provided a sketch of the recent economic landscape and an outlook for the future, beginning with some statistics about countries that are contributing to the changing global market.

—Saudi Arabia controls half the world’s oil reserve, but has a budget deficit, 20% unemployment, and is a massive powder keg on the verge of explosion.

—China’s economy has grown 7.8% in the past year, the highest in the world, and its economic growth has just begun.

—Japan’s economic problems are due in part to a rapidly declining population.

—Chile is currently the brightest economic news in South America.

—Europe’s economy has grown only 1.2% and has had a 10% unemployment rate for 10 years.

Reynolds noted that low interest rates and consumer spending are driving the U.S. economy. Consumer spending was up 2.1% in 2002 compared to 2001, the best in 10 years, with strong auto sales and housing starts up 8.3%. He cited “the miracle of age 46,” noting that American consumers at age 46 are generally at their combined peak earnings, peak savings, peak spending and peak productivity, and the number of Americans turning 46 will increase over the next three to four years.

He estimated that corporate corruption caused the stock market to decline 18% and that the terrorist attacks of September 11, 2001, caused a stock market decline of 8%.

Reynolds terms his economic outlook for 2003 “positive but decidedly sluggish,” with the second half of the year being stronger than the first. The U.S. gross domestic production for 2003 is expected to grow by 2.2%, compared with 1.1% for Europe and 0.4% for Japan. Good news for the U.S. includes rising productivity, lower U.S. inventories, improving unemployment numbers, strong consumer spending and a rise in corporate profits. Concerns include another terrorist attack, pressure to raise interest rates to protect the dollar, the need for financially troubled state and local governments to raise taxes, increases in personal debt and the U.S. reliance on foreign oil.

In his speech, Sanchez asked, “Why should any business incur the costs of credit and collections?” He pointed out that extending credit is done to obtain profitable sales that would otherwise be lost and that it is customary in all forms of business. He also was emphatic in explaining that it is not an accounting function but a sales function, and collection of these funds should be handled by someone with some sales background.

He outlined the key factors in extending credit, based on the customer’s profile, past credit performance and the value of the product being purchased. “The goal of credit approval is to find ways of saying yes, while remaining confident of payment via terms and conditions of sale.”

He also outlined the three types of customers who are past due on payments: those who customarily pay late, those with whom a problem exists in service or a customer’s ability to pay, and those who are deliberately avoiding payment. He then discussed the various approaches to collecting from each type of customer.

He outlined a four-step approach for past due accounts, which is: contact the decision-maker in charge of paying the bill; determine which of the three customer types he is; make a presentation based on the customer type; conclude the presentation and follow-up.

He emphasized the main goal for managing delinquent accounts receivable is to keep credit customers current and buying, and secondarily to identify and control potential losses. He stressed that repeat business is usually the most profitable and it is important to protect relationships with slow payers until they move to the most serious risk level, “out to avoid payment.” At that point, they need to be cut off as soon as possible and a collection agency or attorney enlisted.