THE REPORT BLOG

Tough Times Call for Tough A/R Practices

By now I would imagine that you are already seeing your accounts receivable aging worsen. Two things are happening now: 1) companies are stretching their payable to provide them with more cash and 2) companies are going under. You need to be vigilant with your collections now more than ever. I just spoke with a partner at an 8 lawyer law firm who said that he is allocating 15 hours per week (of someone's time) to make collection calls.

For more on great accounts receivable practices, check out Gene Marks' excellent article "Where is the Money?"

Employee Voting Leave

Here’s a quick reminder from Deborah Shapiro, of Deborah A. Shapiro, LLC, regarding employee voting leave. Thanks to Deborah for this great piece of info, and Stacy Robin of The Degania Group for passing it along.

“As Election Day approaches, please be aware that New York State law requires you to provide your employees with sufficient time to vote.

Employees are entitled to “voting leave” if:

-they are registered voters; and
-they do not have at least 4 consecutive hours in which to vote, either between the time the polls open and the start of their work day or between the end of their work day and the time the polls close.

These employees are entitled to take up to 2 hours of paid leave. They also may take an additional 2 hours of unpaid leave, if necessary, to have 4 consecutive hours off while the polls are open (but employees who are exempt from the overtime laws must not be docked for this time).

If employees wish to take voting leave, they must provide you with notice at least 2 days, but not more than 10 days, before Election Day.  You are permitted to designate whether an employee takes his/her voting leave at the start or the end of the work day.”

Hold Em' or Fold Em'?

A friend of mine who owns a business (I am going leave out the details) is thinking about calling it quits. She has been in business for 15 years and has blue chips clients. So she put together a conference call with other business owners yesterday to get some advice.

While she feels that she has recovered from some mistakes that she has made over the past year and has cut her expenses down drastically (including laying off half of her employees last week), her bank is calling her credit line and she is seeing demand soften a little. Of course, all of this take a toll on even the most hardened entrepreneur.

So on the call, her business owner-friends shared some of their thoughts and advice:

1)She needs to get a clear understanding the company's financial picture. This includes reviewing a current balance sheet and preparing cash flow projections (a most likely and worst case).

2) Evaluate different financing options. As her clients are blue chip companies, she can find an asset based lender that will finance her receivables.

3) Finally, the most important... What does she want to do? Sticking it out will not be easy with a troubled economy and a very lean staff. Is she up for it?

We made it clear that none of us could answer this question. It is something that she needs to think about.

Tough Bosses Can Be Good

National Boss’s Day went by this week without much fan fair in my office. In fact, I didn't actually realize it was National Boss’s Day until I read "10 Signs That You're an Uninspiring Boss" in BusinessWeek. In the article, Sir Richard Branson is quoted as saying, "Praise people and they will flourish. Criticize and they will shrivel up." This got me thinking not only about how I inspire my own employees, but also about the bosses in my past that inspired me.

I am a recovering CPA and I started my career at Arthur Andersen, LLP. Thinking back to those times, if Branson is correct, then I'd be prune juice by now. When I was a green tax consultant, the HR director gave me the career making opportunity of working under one of the most respected - and toughest - managers in the entire organization. Eager as I was, I couldn't wait to get started and didn't have to wait long before being called into her office. She had an assignment for me and was ready to provide the details, when she stopped and said, "Do you want to grab a notebook and write this down?" I said, "No, I can remember all of this." Of course, somewhere between her office and my desk, I completely forgot every word she said after ". . .write this down."

I had no choice but to call her back and admit I forgot everything she said. It was an honest rookie mistake but, to put it mildly, I was not "praised." In fact, she kicked me right out of her office, fuming. It took the kind of groveling that requires kneepads to get back into her office (and a lot of help from HR). From that day on I worked extra hard, made sure I dotted all my i’s and kept my notebook very close.  

So I wonder, if that accounting manager never made me feel two inches tall, would I have developed the kind of work ethic and stick-to-it-ness to start my own business years later? If she didn't hold me to such a high standard from day one and if she hadn't criticized me, would I still be crunching numbers in a cubical today?

I've got a new task to address first thing Monday morning. I've got some promising employees that deserve a lot better than to feel too good about themselves.  

Three Tips from John Catsimatidis

John Catsimatidis was the guest speaker this week at YAI's Business Advisory Council. Catsimatidis is one of New York's most successful entrepreneurs, having owned companies ranging from the aviation and energy industries to Gristedes (not to mention being one of Forbes 400 Richest Americans).

I asked John what he thought were the most important things a business owner could do to attract, motivate and retain employees. His answer was that it all comes down to leadership, but more specifically, these three points:

• People must believe in the leader of the company.

• The employees must see that the leader, and the employees, all work with “common sense.”

• Employees must feel confident that wrongs in the company will be righted.

My Night at Small Claims Court

The other night I found myself at small claims court because an advertiser hasn’t paid their bills. Actually they ran 4 ads but only paid for the first 2 and never returned calls for payment. So we took them to small claims court.

When I arrived at the waiting area, I immediately heard someone calling my name. Turns out it was an NY Report reader and advertiser who was getting sued by a client. When I got into the court room and the clerk started calling the calendar, I heard the name of another NY Report advertiser (I believe they were a claimant but they didn’t respond to the clerk).

Now I am wondering if seeing two of our advertisers there was a coincidence, a reflection of a small world or sign that litigation is just a part of “doing business.”

The defendant, the party we are suing, never showed up and I had no objections about using an arbiter vs. judge/court. My attorney told me that while I waive my right to appeal, I also don't have to spend the entire night in court by using an arbiter. So I sat in another   waiting room for about 45 minutes until I was finally called into a room to speak with the arbiter. She asked me what happened so I gave her the story and showed her the proof I had brought (signed insertion orders and etc). While she wouldn't tell me definitively if she was going to rule in my favor, her implications were clear that she would (plus, it didn’t hurt that the advertiser paid for 2 insertions out of the 4 agreed on).

She further said that they could make a motion to "vacate" the decision, which means it could go back to court (meaning another night or 3 on this matter - which is only for about $4200). And even if they don't contest it, I still need to collect and that is an entirely separate endeavor.

Despite the time and effort, I think it is important to go after people in court that owe you money - especially if they are not responsive.

By the way- I got a call the next morning from the company we were suing, eager to pay their balance as they did not want to go to court.

Pictures from the 2008 Small Business Awards

Here are some pictures I wanted to share from this year's Awards Gala. For more pictures from the sold out night, check out our Facebook page.