I was driving my daughter to the dentist today, and noticed how many businesses are open. Now, it's true that tomorrow is Christmas Eve, so that today is just "Friday" for a lot of people, and if you don't happen to be Christian there's nothing really special about this holiday anyway. Then again, there was a time when everyone in the United States understood that the Christmas season was a time of celebration, so that if you were not Christian or even particularly religious, you could still celebrate a time to enjoy family and share goodwill. After all, the early Christians celebrated Christmas at a time when the guys in power were celebrating the Winter Solstice, to avoid notice of their own faith, so the holiday has always been more about the spirit than the specific faith. Some Christians will not like that, I expect, since the modern spirit seems to demand an Imperial Christ who commands us all to surrender to the True Faith. For me, though, I recall a Christ who was remarkably subtle and gentle about other beliefs. Not that Christ did not believe in His own Gospel, but that Jesus understood from the start that faith must be born of love and charity, not demands and threats. Anyway, my point is that I am old enough to remember when everyone could enjoy the season and get a sense of God's love for all people.
I don't think I have to go into detail to observe that things have changed a lot over the years. The mercenary aspect has been around for a very long time, even the original version of "Miracle on 34th Street" and "It's A Wonderful Life" understood how people obsess over money and possessions, and many judge a holiday by the profit in their bank accounts. And I notice that there are a lot of good people going around spreading the true spirit by helping others, like the layaway Good Sams paying off balances at stores, or the Salvation Army's tireless work to help those who need it year-round, but especially at Christmas. But I have also noticed how many people are stressed out. My family went to Costco and we saw a lot of angry drivers and rude shoppers, cutting off other cars and shoving in front of other shoppers, and store employees who looked harried and worn out. I remember back when I ran movie theaters, and how tough it could be to get through the holidays with rude and selfish customers who showed no courtesy to my staff or other patrons. OK, so that's been around for a long time, I get it. And I have to mention, there seem to be an awful lot of people with Christian symbols and stickers on their cars who show no sign f Christ in how they actually behave and speak. Just saying, folks.
But there's the corporate aspect as well. My company's GM sent out a pretty standard Christmas wish email yesterday, but it was in sharp contrast to his behavior during the weeks before then. I get it, end of year coming up and he's under a lot of pressure to make his projected numbers. But he was a bit rude in how he addressed his people, especially in his demands from managers. No sense getting too worked up in that, but I did notice that we had expectations told to us that had no input from us, and therefore were not only unreasonable but impossible to attain. Since I try very hard to always deliver everything I promise, I don't much like being issued a standard which could not possibly be accomplished, nor to be issued expectations that show no attention to my own estimates and reports throughout the year. Again, I understand the pressure people can get under, but it's just plain unprofessional to ignore your own people's reports on what is in range and why.
I bring that up, because in talking to folks that seems to be happening a lot in companies, expectations issued that are unrealistic and create stress for no good purpose and, long-term, damage working relationships between executives and managers. To put it another way, the first fifty weeks of the year give you a good idea about what can be done during the last two, and unrealistic demands are bad on every level. Also, the stress of trying to find a way to meet these year-end expectations spills into family and the community. One reason for the holiday season, I think, is that just as we need a weekend after working all week, at the end of the year we need to decompress a bit, not ratchet up the pressure for the sake of an artificial financial target. And we see that in ways we something might originally see as good; stores that are open longer hours instead of giving their employees more time off, and fewer businesses that close for holidays. I'd rather have the inconvenience of having to get my shopping done by December 23rd and risk not having the pumpkin pie on Christmas, than to see stores demand their employees ignore their families and the holiday in the chase to get more money.
You shouldn't have to be Christian to put away greed for just a few days.
Friday, December 23, 2011
Sunday, December 18, 2011
Christmas and the AR Manager
For most folks, Christmas is a happy time. Kids getting out of school, family coming in from all around, and the workplace is lighthearted and in a party mood. Unless, of course, you are finishing up the fiscal year and getting heat from above to accelerate your efforts to bring in revenue and reduce debt. In my case, that means collecting before the end of the year on your hardest cases, and to reduce our bad debt. This month I have been challenged to reduce Bad Debt by 80 percent in a single month and to reduce DSO to a full 12 days lower than it was at the end of October.
Went again to the dentist this week, part three of four in my Why It’s Bad to Break a Tooth adventure, complete with root canal and costs for a crown. I got my ‘temporary crown’ today, which is a white plastic thing which looks like a mini tooth tarp. At least it’s better than what I had before. But any day which includes getting your teeth drilled is one I’d like to get past.
But back to the job. In any company, some of your customers won’t pay all they owe, and some won’t pay at all. Obviously, if you knew they would do this you would not sell to them, or at least you would try very hard to address in advance whatever caused them to refuse payment. But all sorts of problems come up, ranging from errors by your company to out-and-out thieving by a customer. So the first problem is sorting out what happened, which is where all good collections work starts.
It should be obvious, of course, that by the time a balance becomes Bad Debt, you have something that cannot easily be sorted out. Looking at my own Bad Debt Leaderboard, I see late delivery, contract terms disputes, repair complaints and customers trying to hide from their debts as the top reasons why an account gets into Bad Debt.
The fun thing about these issues, is that most of them are simple enough to work out. If we have made a mistake, we make things right, by either repairing the product, replacing it, or refunding the money after it’s returned. Now I will admit that sometimes some of our people would promise a credit then forget about it, but I have also found customers who claimed to have returned product, then when asked for proof of delivery, it finally comes out that they never returned it and it’s been sitting on their warehouse floor for months. What both sides have in common on these things is a real strong reluctance on some folks’ part to admit when they made a mistake.
So my partner and I have lowered DSO from about 72 earlier this year all the way down to 54 right now, and we’ve cut about a hundred thousand out of bad debt, not including adjustments made for credit memos owed by Sales. Trouble is, we’re expected to cut DSO down to 50 by end of year, and cut another hundred thousand of Bad Debt in the next eight business days. Considering our Best Possible DSO (DSO based on just invoices not yet due, assuming every single customer pays on time and all issues and disputes are resolved with payment) looks to be around 52 at year-end, we’ll need to do the impossible to meet the standard. As for Bad Debt, considering most of the remaining debt comes from product that was delivered late and the rest is for customers who don’t answer calls, we’d need a sequel to Mission:Impossible to get that done by December 30.
Ho ho ho becomes ow ow ow.
Anyway, that's sort of why I have not posted anything. The rest of my life has been even more boring, although I may have some comments regarding Age Discrimination in talking about my wife's job, depending on how things work out.
Best wishes to all, and to all a Merry Christmas.
Went again to the dentist this week, part three of four in my Why It’s Bad to Break a Tooth adventure, complete with root canal and costs for a crown. I got my ‘temporary crown’ today, which is a white plastic thing which looks like a mini tooth tarp. At least it’s better than what I had before. But any day which includes getting your teeth drilled is one I’d like to get past.
But back to the job. In any company, some of your customers won’t pay all they owe, and some won’t pay at all. Obviously, if you knew they would do this you would not sell to them, or at least you would try very hard to address in advance whatever caused them to refuse payment. But all sorts of problems come up, ranging from errors by your company to out-and-out thieving by a customer. So the first problem is sorting out what happened, which is where all good collections work starts.
It should be obvious, of course, that by the time a balance becomes Bad Debt, you have something that cannot easily be sorted out. Looking at my own Bad Debt Leaderboard, I see late delivery, contract terms disputes, repair complaints and customers trying to hide from their debts as the top reasons why an account gets into Bad Debt.
The fun thing about these issues, is that most of them are simple enough to work out. If we have made a mistake, we make things right, by either repairing the product, replacing it, or refunding the money after it’s returned. Now I will admit that sometimes some of our people would promise a credit then forget about it, but I have also found customers who claimed to have returned product, then when asked for proof of delivery, it finally comes out that they never returned it and it’s been sitting on their warehouse floor for months. What both sides have in common on these things is a real strong reluctance on some folks’ part to admit when they made a mistake.
So my partner and I have lowered DSO from about 72 earlier this year all the way down to 54 right now, and we’ve cut about a hundred thousand out of bad debt, not including adjustments made for credit memos owed by Sales. Trouble is, we’re expected to cut DSO down to 50 by end of year, and cut another hundred thousand of Bad Debt in the next eight business days. Considering our Best Possible DSO (DSO based on just invoices not yet due, assuming every single customer pays on time and all issues and disputes are resolved with payment) looks to be around 52 at year-end, we’ll need to do the impossible to meet the standard. As for Bad Debt, considering most of the remaining debt comes from product that was delivered late and the rest is for customers who don’t answer calls, we’d need a sequel to Mission:Impossible to get that done by December 30.
Ho ho ho becomes ow ow ow.
Anyway, that's sort of why I have not posted anything. The rest of my life has been even more boring, although I may have some comments regarding Age Discrimination in talking about my wife's job, depending on how things work out.
Best wishes to all, and to all a Merry Christmas.
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