Will I Ever Get Paid?
Michael was always good with numbers. Even now, he still remembers the first time he counted to one hundred! Some people in this world help others by bringing comfort through their empathy, while others bring joy to those they meet through their laughter. As strange as it may seem to some, Michael had learned that he could help others by bringing clarity through numbers. Numbers have an uncanny way of revealing the right thing to do. Yet now, as he sat in this meeting with his colleagues and thought about his own “numbers,” Michael felt like a complete hypocrite!
Don, the President of the firm where Michael worked, was speaking. Michael refocused and listened as Don dropped a bombshell. “After much thought and planning, I’ve decided that I am retiring from our accounting firm next year.” He continued, “Val and Michael, I am absolutely confident that the two of you will continue to accelerate the firm toward the objectives we have collectively set over the past few years. When I resign as President, the firm will need a new leader.” Michael’s heart was racing. Was Don going to choose him? Michael longed to be the head of the firm, just as Michael’s father had been chairperson of his own accounting firm.
Don continued, “I am going to consider a number of important factors, and I will make my decision about three months before my departure.” Val interrupted, “Wait, Don. I don’t want to compete with Michael. We have a great professional relationship and, more importantly, we are friends who have been through thick and thin together.” “I feel the same way Don,” said Michael. Don explained, “Guys, don’t worry. It won’t be like that at all. I have chosen five key performance indicators that will serve as the basis for my decision. I promise to choose the person who has the best numbers. I am going to consider two metrics that are team-based: gross revenue and profit margin. As well as three factors based on the individual: accounts receivable, client satisfaction score, and staff satisfaction score.” Val said, “That’s certainly fair and reasonable Don.” Michael added, “Yes, it is a sound approach, and I appreciate you sharing the clarity and transparency of your plan.” Don’s expression turned a bit more serious as he took a deep breath and continued, “Michael, I’m glad you value transparency, because there is one more element of this process that I think you and Val should know.” Michael held his breath and tried to maintain a stoic expression, although he was sure he knew exactly what the next bombshell would be based on their past meetings.
“At the time I announce my decision to you and the staff about who will be the next President of the firm, I intend to explain exactly how I made my decision. I will share with the team your results in each of the five metrics that formed the basis of my decision. These numbers should not be a secret to the staff, and it is critical that the junior accountants understand the factors that are instrumental to our firm’s success. One or more of them will likely become partners one day, and it’s never too early to let them see how partners think.” As Michael reflected on his current performance in each of the five areas, he felt a pit in his stomach. This was his worst nightmare coming true.
As soon as Michael got back to his office, he called his wife Susan. He explained what had just happened, and asked if they could set aside some time that evening to talk after they had dinner with their daughter Beth. Susan agreed. They met together in his home office, sitting next to one another on their leather couch. While Don and Val were good friends, Michael’s best friend was Susan, and he sure was glad she was here for him at this critical juncture. “It’s going to come down to the accounts receivable. I’m pretty even with Val on everything else. I feel like such a hypocrite telling my clients to stay on top of their accounts receivable when mine are so bad! Sure Don and Val know the difficulties I’ve had, but the junior accountants don’t. It will be so embarrassing for my numbers to be shared out in the open.” “Michael, with all the time you’ve spent with that collections attorney, I thought things were better now,” Susan said. “That’s exactly the reason I’ve been staying at the office so late recently, Susan – all of my other work still has to get done, and done on time. Tomorrow I have to provide answers to a long list of questions that are part of discovery in one of the cases, but these lawsuits are only making matters worse. The clients are complaining, and I have to respond in writing because Don wants to be sure that we are maintaining our high professional standards. Of course Don knows my side of the story, but I can’t control what these delinquent clients are saying to their own friends and colleagues about our firm. I have tried everything to get them to pay. I’ve already made ten phone calls and sent out eight letters this week alone. It’s just not fair! I do all of the work – and great work at that. They get the outcome they want, and then they stiff me! How can they sleep at night? Don’t they understand how much this affects me both financially and professionally?” “Well Michael, have you ever tried just being honest with them?” Susan said. “Of course! I don’t even know how many times I’ve explained this all to Sal, but he continues to make empty promises.” “Isn’t he your biggest client?” Susan asked. “Yes, unfortunately he is. And not just in terms of revenue, but also in terms of my accounts receivable. He regularly pays his invoices four to six months after they’re due!” Michael slumped into the cushions of the couch and put his head in his hands. He exhaled and added, “And now, even some of my newer clients are letting their invoices lag beyond 90 days.” He paused and stared out into space. “I just don’t know what else I can do. I have a meeting with Sal next week, and I need a plan.”