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SWALLOWED BY THE WHALE

AuthorHouse

Chapter One

One of the first changes to affect me was the financial priorities. As a small company, we had always watched our expenses, no matter how small. Whenever possible we used both sides of the paper in the copier and the computer printer. The office supply cabinet was my desk drawer. I found out that if I forced people to come to me every time they lost a pen or left it home, they were more careful the next time. Every desk calendar in our office was from some organization that had given them away as advertising. I asked everyone to bring in their church calendars if they were not going to use them at home. When my husband was traveling, I had him grab those pens the hotels throw on the nightstand and desk.

I was proud of the money I was saving the company and was not prepared for the effect these activities would have when applied in the new organization. Not only were my efforts not wanted or appreciated, they were criticized as time wasting and insignificant. I had always assumed that a dollar was a dollar. I soon discovered that was not the case. The importance of each dollar was relative. In corporate economics, expense-to-revenue ratios rule. We were now part of a billion dollar company, and to their way of bookkeeping, the cost of the time I spent to save a buck was more than the savings. The way it works in a big corporation is that your salary is multiplied to cover the cost of the company overhead (office space, insurance, benefits, organization, support, etc.). To SuperCorp my hourly rate was four to five times what I actually made. Office supplies, as a business line item, were so far down the priority list it was almost never noticed. My new top priority was to support sales and tens of thousands of dollars in revenue growth, not to save pennies on expenses. On the other hand, the sales team's expenses were enormous, but as long as the revenues they generated were large enough, no one cared.

The first lesson I learned was when you wake up one day and find yourself working for a new company with substantially greater revenues than you were used to, be prepared to have your financial priorities turned upside down. I suggest that you try to get a look at your department budget. See where the income and expense items for which you are responsible fit with respect to amounts and percentages. Chances are you are spending some part of your time working on things at the `bottom' of the list. In order to adapt to the priorities of your new employer, you may need to abandon some activities and search for more juicy items higher up the revenue scale. At the very least, look at your tasks from the perspective of a company that includes your salary as a part of your overall cost. Ask, "Is my time worth these savings?" In all likelihood, you will find a shift away from the activities that save money towards those that generate income.

In that light, let me say a few words about my income-generating responsibilities. When I was with LittleCorp, I was constantly praised for my collection activities. I knew how to work with our clients to get them to pay a little each week on a larger debt. I knew from experience that if you allowed their debt to remain, it would tend to increase rather than shrink. I would attempt to reverse that trend by collecting a few dollars a week on their arrears balance. That meant the customer was paying down his bill instead of watching it expand out of control, and since most of these companies were honest and sincerely wanted to pay their debts, it gave them a sense that they were accomplishing just that. Sometimes a LittleCorp customer got into financial difficulty and it became apparent that they would never pay. When I spotted those, I would either put them on a "pay as you go" plan, i.e. no credit, or have the driver recover any of our assets, and drop them altogether.

SuperCorp could not be bothered trying to collect from a customer that was a few hundred dollars behind. They felt it was not worth either my time or theirs. They would just as soon write them off as a loss. If 120-day accounts receivable got too large they reset it to zero. SuperCorp would hand off these companies to collection agencies, which were highly impersonal, much less effective, and often returned less than twenty-five cents on the dollar. So when I continued to try to work with our overdue accounts receivable as individuals, my boss ordered me to stop. The few times I tried anyway, I began to feel like I was running some covert operation. Eventually I stopped, but it took me almost six months to get my budget priorities aligned with those of SuperCorp. Along the way, I found that I had come close to being fired for not doing the job assigned.

On the other side of the revenue coin, big corporations have expense items that may have been okay for a small company, but now are not acceptable in SuperCorp's. One that comes to mind in my job was overtime. In LittleCorp, our business was seasonal. It was far more efficient to have the staff work overtime when the business peaked, than to hire and train additional help. SuperCorp looked at overtime as an unnecessary expense. In order to cut costs, the regional manager would simply make a proclamation of no more overtime. When the business began to increase during the busy season and we needed the extra hours each day, this presented a problem for everyone, especially me, who received no pay for overtime. I now had more than eight hours of work per day. I would work through lunch and stay late, off the clock, in order to get my job, and any other work, done. However, some of my extra workload was related to the misunderstanding of my new responsibilities. I will discuss how I dealt with that issue in Chapter Four.

Another budget item that became ridiculously confusing was petty cash. In LittleCorp, petty cash was a very informal, but necessary, process. I had a box in my desk where we kept the profits from the soda vending machine. We used this money to buy birthday cards, cakes, etc. for employees. However, if I had to have cash quickly I would take what I needed, and Bill would replenish it later with money from his wallet. I kept receipts for what I spent, but that was pretty much the extent of the bookkeeping for petty cash.

SuperCorp, on the other hand, had petty cash set up as a regular checking account at a local bank. I matched cancelled checks against receipts and expense entries, just as though they were ten thousand dollar capital purchases. All use of the petty cash account needed approval. Now I was forbidden to keep any cash in my desk. The new procedure required me to gather up the petty cash expense receipts at the end of the month and send them off to headquarters. They would send back a check to be re-deposited into the petty cash account. The first three months after the takeover, we had exceptionally high petty cash expenses due to setting up a standard SuperCorp office. Often we would go into the last week of the month with little or no petty cash funds available, and by the time the headquarters check arrived a few days into the new month, I was passing the hat to buy paperclips at Office Depot. We could have avoided much of this chaos if I had been more aggressive about adapting our procedures to the new petty cash system, instead of the other way around.

Here is a story that typifies my...