O’Leary as Executive Role Model?
George O’Leary was forced to resign in December as head coach of the Notre Dame football team after it was discovered he had misrepresented his degrees and accomplishments on his résumé. A survey taken by executive recruitment firm Christian & Timbers (before the O’Leary scandal) would seem to indicate that George would be right at home in corporate America. The firm’s survey of 7,000 executive résumés revealed that 23 percent of executives misinformed potential employers about their backgrounds. Of those résumés with false information, the following were the top offenses:
1. Misrepresented number of years on a job 71%
2. Exaggerated accomplishments 64%
3. Exaggerated size of organization managed 60%
4. Indicated partial degree as full degree 52%
5. Overstated compensation 48%
According to Jeffrey Christian, chairman and CEO of Christian & Timbers, these problems usually don’t surface until a company is serious about a candidate and performs more comprehensive due diligence. “Yet, it is surprising that many companies, once they discover misleading information, such as distorted graduation dates or forgery of responsibilities, still have interest in hiring the candidate,” said Christian. “Often, when companies believe they have a fit, they will overlook a great deal. However, truly strong companies realize they are desirable [as a place of employment] and hold their ground on principles. Tolerating falsities that demonstrate a candidate does not have the credentials or morals to do the job is unacceptable,” he concluded. (As did Notre Dame.)
Back to Basics – Accounting 101
Everything you need to know about “managing payables and receivables during tough times” you learned in basic accounting. For those of you whose college years are a dim memory, InBox, a publication of Inc. Magazine, offers is a quick refresher course:
For Accounts Receivable:
1. Bill promptly. If you wait till the end of the month, your cash flow has already taken a hit.
2. Follow up, follow up, repeat. If you have the staffing to handle it, the most effective procedure starts with a call as soon as the bill is mailed. If the payment is late, schedule weekly calls.
3. Track results. Make sure key executives receive a weekly update on outstanding receivables.
4. Involve top management. It’s amazing how much more effective a collection call can be if it comes from a company’s owner rather than an accounting clerk. Try it when receivables age past 45 days.
For Accounts Payable:
1. Time your payments strictly according to due dates. Schedules created for your staff’s convenience can be costly if you are losing discounts.
2. Minimize large outflows. Consider scheduling payroll biweekly and paying bills on off-weeks.
3. Avoid interest charges. If temporary cash-flow problems require you to stretch your payables, make sure you aren’t late with bills that incur interest charges or late fees.
4. Communicate with suppliers. If you have a cash-flow problem and good relationships with vendors, it can’t hurt to call and request a payment extension.
5. Circulate weekly payables reports to key executives. Don’t depend on clerks to discover a cash-flow problem. Late payments are an important warning sign.
News Flash – Europe’s Currency Disappears
French francs, Italian lire and Dutch guilders will soon be nothing more than play money. A new unified currency – the euro – is taking over in a dozen European countries in a transition period that began January 1 and will end February 28. On the foreign exchange market, one euro is approximately 90 cents U.S. “It may be a bit confusing these first few months, but ultimately the euro is going to be a big benefit for travelers,” said Lisa Foster, a spokeswoman for AAA Travel in Nevada. “First and foremost, they will save money by avoiding the commissions charged when exchanging currency.” The euro will also make it easier to comparison-shop. “Travelers no longer need to memorize different conversion rates when renting a hotel room, dining out or purchasing gifts,” said Foster. Nations replacing their currency with the euro are: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. Notable holdouts include Britain, Denmark and Sweden.
$1.7 Billion Lost in the Mail
The U.S. Postal Service (USPS) ended its 2001 fiscal year on September 30 with a $1.7 billion loss, marking the second consecutive year it finished in the red. The USPS lost $199 million during fiscal year 2000 and is projecting a 2002 deficit forecast of approximately $1.35 billion. A USPS release attributed this year’s financial losses to “the lack of mail volume growth due to the economic slowdown and the subsequent Sept. 11 terrorist attacks.” Although the terrorist attacks USPS showed an overall decline in mail volume during 2001 of 0.2 percent, the first drop in volume since 1991. “[The financial loss] was further precipitated by lost revenue due to the delay in implementing new postal prices due to a cumbersome process,” said CFO and Executive Vice President Richard J. Strasser Jr. (In other words, now would be a good time to increase your company’s postage budget.) Postal rates are scheduled to increase by 8.7 percent across the board in September, but the unprecedented volume of red ink has led the USPS to request that rates be changed as early as June, since each additional month would bring in an extra $500 million to the struggling agency.