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NACM Survey Shows Higher Optimism about Collections

A monthly survey conducted by the National Association of Credit Management shows that credit and collection executives rate the current environment more favorably than at any point since May of 2002.

The NACM Credit Manager's Index reached 57.9 in October, and the association said that improvement in the manufacturing sector helped drive that segment's score to the highest point since the index was initiated in February of 2002.

The service sector also participated in the October gains, the NACM said. The service sector's index of 56.3 was its first uptick since May of this year.

However, the NACM said two factors to watch for next month are the industry's perception of "accounts placed for collection" and "filings for bankruptcy." The number of respondents indicating "better" performance for these two factors is moving closer each month to the percentage measuring "worse" performance, the NACM said.

The survey asks credit managers to rate favorable and unfavorable factors in their monthly business cycle. Favorable factors include sales, new credit applications, dollar collections and the amount of credit extended. Unfavorable factors include rejections of credit applications, accounts placed for collections, dollar amounts of receivables beyond terms and filings for bankruptcy.

The National Association of Credit Management supports more than 25,000 business credit and financial professionals.

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