Protecting Your Assets: A Well-Defined Credit Policy Is The Key

In - Protecting Your Assets: A Well-Defined Credit Policy Is The Key – an essay by Steven V. Moll, Associate Professor, The School of Hospitality Management at Florida International University, Professor Moll observes at the outset: “Bad debts as a percentage of credit sales have climbed to record levels in the industry. The author offers suggestions on protecting assets and working with the law to better manage the business.” “Because of the nature of the hospitality industry and its traditional liberal credit policies, especially in hotels, bad debts as a percentage of credit sales have climbed to record levels,” our author says. “In 1977, hotels showing a net income maintained an average accounts receivable ratio to total sales of 3.4 percent. In 1983, the accounts receivable ratio to total sales increased to 4.1 percent in hotels showing a net income and 4.4 percent in hotels showing a net loss,” he further cites. As the professor implies, there are ways to mitigate the losses from bad credit or difficult to collect credit sales. In this article Professor Moll offers suggestions on how to do that. Moll would suggest that hotels and food & beverage operations initially tighten their credit extension policies, and on the following side, be more aggressive in their collection-of-debt pursuits. There is balance to consider here and bad credit in and of itself as a negative element is not the only reflection the profit/loss mirror would offer. “Credit managers must know what terms to offer in order to compete and afford the highest profit margin allowable,” Moll says. “They must know the risk involved with each guest account and be extremely alert to the rights and wrongs of good credit management,” he advocates. A sound profit policy can be the result of some marginal and additional credit risk on the part of the operation manager. “Reality has shown that high profits, not small credit losses, are the real indicator of good credit management,” the author reveals. “A low bad debt history may indicate that an establishment has an overly conservative credit management policy and is sacrificing potential sales and profits by turning away marginal accounts,” Moll would have you believe, and the science suggests there is no reason not to. Professor Moll does provide a fairly comprehensive list to illustrate when a manager would want to adopt a conservative credit policy. In the final analysis the design is to implement a policy which weighs an acceptable amount of credit risk against a potential profit ratio. In closing, Professor Moll does offer some collection strategies for loose credit accounts, with reference to computer and attorney participation, and brings cash and cash discounts into the discussion as well. Additionally, there is some very useful information about what debt collectors – can’t – do!

Factors predicting recommendations for civil commitment of sexually violent predators under Florida's Jimmy Ryce Act

This study investigated the factors considered by forensic examiners when evaluating sexually violent predators (SVP) for civil commitment under Florida's “Jimmy Ryce Act.” The project was funded by a pre-doctoral research grant awarded by the Association for the Treatment of Sexual Abusers (ATSA). ^ This study proposed two specific research questions. First, what is the direct relationship between actuarial risk assessment scores and recommendations for sex offender civil commitment? Second, which other variables are likely to influence SVP commitment decisions, and to what degree? The purpose of the study was to determine if risk assessment practices are evidence-based, and whether offenders selected for commitment meet statutory criteria. ^ The purposive sample of 450 SVPs was drawn from the population of sex offenders evaluated for civil commitment in Florida between July 1, 2000 and June 30, 2001. Data were extracted from SVP evaluations provided by the Florida Department of Children and Families. Using multivariate logistic regression, this correlational research design examined the relationship between the dependent variable, commitment decision, and several sets of independent variables. The independent variables were derived from a review of the literature, and were grouped conceptually according to their degree of correlation with sex offense recidivism. Independent variables included diagnoses, actuarial risk assessment scores, empirically validated static and dynamic risk factors, consensus based risk factors, evaluator characteristics, and demographics. This study investigated the degree to which the identified variables predicted civil commitment decisions. ^ Logistic regression results revealed that the statistically significant predictors of recommendations for sex offender civil commitment were actuarial risk assessment scores, diagnoses of Pedophilia and Paraphilia NOS, psychopathy, younger age of victim, and non-minority race. Discriminant function analysis confirmed that these variables correctly predicted commitment decisions in 90% of cases. ^ It appears that civil commitment evaluators in Florida used empirically-based assessment procedures, and did not make decisions that were heavily influenced by extraneous factors. SVPs recommended for commitment consistently met the criteria set forth by the U.S. Supreme Court in Hendricks v. Kansas (1997): they suffered from a mental abnormality predisposing them to sexual violence, and risk assessment determined that they were likely to reoffend. ^

Municipal accountability: Should regulations similar to the Sarbanes -Oxley Act apply to the local sector?

As America moved into the 2lst century financial scandals associated with large publicly traded corporations brought widespread concern about the reliability of financial reporting. In response the U.S. Congress adopted the Sarbanes-Oxley Act of 2002 (SOX). Undergirding SOX was the belief that improvements in the reliability of an organization's financial disclosures would lead to increased trust in the issuing organization. While SOX is aimed at publicly traded private sector organizations, the value of adopting SOX-like practices in the public and the nonprofit sectors have been recognized. Although SOX-like auditing practices have not at the time of this research become part of the auditing regime for municipalities, the results of this research provide a baseline "read" of municipal finance officers' perceptions of the value and obstacles associated with adoption of two major components of SOX: Principal Officer(s) Certification (POC) and the Independent Audit Committee (IAC) requirements. The author mailed surveys to all finance officers of municipalities in Florida and Ohio with populations of 10,000 or greater which did not contract out the operation of their finance departments. Post-survey "elite" interviews were conducted in an effort to obtain a deeper understanding of revealed issues and contradictions found in the analysis of the results of the mails survey. The findings suggest municipal finance officers are willing to adopt POC but have reservations about implementing IAC. With both POC and IAC the respondents appeared to consider intangible, non-pecuniary consequences as much or more than tangible, pecuniary consequences. Consistent with prior research, attitudes regarding POC and IAC were found to be unrelated to prior adoptive behavior, or personal and organizational demographic variables. Although accounting and auditing are inexorably intertwined, views of the recently implemented GASB 34 reporting model were found to be unrelated to the willingness to adopt POC or IAC. Findings dovetail with current discourse in public sector accounting suggesting local finance professionals may see benefits—both tangible and intangible—to some but not all accounting practices adopted in the private sector. This is consistent with the commonly accepted belief that public sector accounting maintains fundamental differences from its private counterpart.