Quote of the Week


Images-1INT. OFFICES OF WERTSHAFTER CPA & ASSOCIATES

TED SCHMIDT CPA, who has been fired by his boss for non-business use of the Internet on the job after 9 years with the firm, is about to leave the premises forever with his Mr. Coffee and a few personal effects in a box.

MR. WERSHAFTER

Schmidt?

TED

Yes, sir?

MR. WERSHAFTER

One more thing. Are you happy being an accountant?

TED

Happy?

MR. WERSHAFTER

Does balancing the books makes your heart beat faster?

Bummed out Ted takes a moment to contemplate the question. He sighs.

TED

No, sir, not really.

MR. WERSHAFTER

Then, I am doing you a favor. Next time find yourself something you have a passion for. Otherwise, you are just jerking yourself off.

QAF, Episode 2.2, written by Ron Cowen and Daniel Lipman

I Dream of “Star Wars,” or Darth Vader’s Management Style


At the risk of exposing myself to the readers’ harsh judgement, I have to admit that there are moments when even my long-time experience of controlling emotions in the work environment is not enough to tame the feeling of… ENRAGEMENT some people manage to ignite inside my being. Hell, even the Page of Frustration doesn’t help.

Some dense employees endlessly making the same errors, or chiefs of irrelevant operating sectors creating disasters behind your back, or (most likely) all of them causing damage simultaneously – these people can make you feel the urge to physically harm them in restitution for the emotional turmoil you experience: bite them, or kick them in the shins, or hit them with a monitor, whatever. Of course, you don’t do any of that. You go and curse at the toilet bowl instead (one of my Personal Tools of Frustration Relief).

During such moments my mind frequently carries me to phantasmagorical events that took place “a long time ago in a galaxy far, far away;” to the image of a person (can we call him a person?) with no tolerance for poor work performance, unlimited managerial authority, and extraordinary motivational tools – Darth Vader. This was an executive who gave no time for excuses and perfected the methodology of frustration release to the point when he didn’t even have to touch the failing underlings. He destroyed them telepathically!

“You have failed me for the last time…” Ta da! And the offender of the high work standards is grabbing the invisible fingers at his throat. “I find your lack of faith disturbing…” – same result! This definitely puts the audience on alert: every time there is a discussion of the Galactic Empire’s failures or setbacks, you start wondering, will Darth Vader have to choke a bitch again?

People’s opinion of George Lucas’s writing and directorial mastery varies, but we cannot deny the fact that his ideas are brilliant and his intuition about mass audience response patterns can be matched only by someone like Steven Spielberg. Notice, how he populated the “Good Side” with heroic, largely self-sufficient overachievers, who would sacrifice their lives before they allow themselves to fail. It makes perfect organizational sense: if they were as fallible as the Dark Side’s middle management, who would reprimand them? Yoda? Obi-Wan Kenobi? It would never work – they are too soft.

Yoda spent so much time training Luke Skywalker for his intended position as a destroyer of the Empire. Yet, the boy wasn’t quite grasping it. So, who did Lucas choose to show the young warrior what’s what? Who else? Darth Vader: my son, my son, you still kinda suck at this. Let me raise the bar a bit. Whoosh! Luke’s hand goes bye-bye. Now, try to overcome your weaknesses and harness the Force!

I sincerely apologize to the worldwide community of the “Star Wars” nerds, but, even though I admire it as a revolutionary breakthrough in filmmaking, I have to admit that the soap-operatic nature of the material always seemed silly to me. Yet, when the frustration rages in my head, remembering Darth Vader’s chocking scenes is extremely satisfying.  Try it!


Quote of the Week


600full-gustave-flaubert"Our ignorance of history makes us libel our own times.  People have always been like this."

                                                    Gustave Flaubert


Respect Your Audience: Reflections Triggered by Matthew Good’s Concert at Mercury Lounge


Images-1Let's face it – most of business professionals, including CFO's and controllers, like hearing themselves talk. Frequently, we cannot stop ourselves, going on and on about some business matter, or bitching about some subordinate, or superior, or peer. Presentations are too long to hold listeners' attention, pitches are unfocused, emails look like novellas, and meeting speeches are self-aggrandizing. There is no denying – that pervasive affliction of humanity, narcissism, is inescapable.

The sad truth is that by doing this we depreciate ourselves – people see it as overcompensation for hidden insecurities. Moreover, such behavioral tendencies give the listeners a good reason to be dismissive. They will feel disrespected and resist to be receptive.

However, even with that affliction sometimes obstructing our way to successful communications, most of us have enough common sense and professional experience not to offend our audience with outright insults. The nature of our positions forces us to be diplomatic. We are in the business of dealing with brash bosses, prima-donna sales people, sensitive customers, important bankers, strategic suppliers, valuable subordinates, and whoever else the job brings into our habitats. The words we use and thoughts we express have a potential of affecting our company's business in a positive or negative way. So, we'd better be respectful, and, most of the time, we are.

These thoughts kept popping into my head last week during Matthew Good's concert at Mercury Lounge. The whole experience was a bit strange. I've been listening to this Canadian rocker's beautiful music, channeled through his amazing vocal and guitar skills, since the 90s (God bless them!). Now, standing right in front of the tiny stage, I've observed a 40-year-old (looking over 50), kinda balding, kinda pudgy, unkempt man, who managed to down three large glasses of gin in a span of 90 minutes. 

It was unexpected, but I really-really don't care what people look like as long as they do their job well. And I've got to say, when Mr. Good sang, it made you forget everything: his age, your age, what he looks like, and what you look like now, and all the shit that happened in 20 years since you first heard him. The trouble was the man sang only half the time.

Dana Carvey once said that all comedians want to be rock stars; apparently, and vice versa. Matthew talked after every song (literally): SNL sketches, whooping cough epidemic in Vancouver, one of his kids being a bastard, postnasal drip, Lance (his guitar Dobby/drinks server/on-the-road chef), hot dogs – what have you. I was standing there thinking, "Dude, do your job, sing. Have some fucking respect – it's midnight on a Wednesday night, some of us worked all day and have to work tomorrow."

It got worse: as the blood alcohol level was rising, his widely known political side started coming out. When he began throwing accusations regarding American government's shadiness mixed with condescending remarks like, "You should know what your government is doing" into the audience (thanks, dude, without your Canadian ass I wouldn't know how to form political opinions!), someone else voiced, "What about your government?"

But at the end, it was an issue related to his own music, with which he hit the ultimate low of disrespect. The exhausted, but still forgiving fans started throwing song requests at him; some from The Matthew Good Band's first album "Last of the Ghetto Astronauts." "There is a better chance for my starting chewing crack than for your forcing me to sing anything from that album. Common, people, admit it – that was crap written by a 24-year-old." This is to those who bought the album and listened to it since 1995, plus many members of the audience who are in their 20s now, yet know every word of lyrics you wrote when they were wearing pampers? How offensive is that?

Essentially, touring musicians are in business of selling their albums and solidifying their fan base, thus making sure that people will buy tickets again and again. In that, they are not much different from other business professionals.  The way I see it, they should be afraid to lose their paying customers the same way we do. Alas, Matthew Good thinks differently. Well, I'm not buying next time.

Audit Season Woes


As a corporate controller, CFO, and consultant, I've been on auditees' side of the table for the past 20 years. Yet, I still remember the gratifying excitement of coming to a company as an auditor and testing the depth of my expert knowledge in an unfamiliar territory, quickly absorbing the business's specifics and immediately identifying the scope of testing. Well, Ok, I've been called a "show-off" and "know-it-all" many times, so forget me. Over the years, there were other public accounting professionals (not many, but some), who impressed me with their knowledge and sharpness, but it doesn't happen anymore.

I've been complaining about the decline of the quality of work across all jobs, from customer service representatives on the phone to the cardiologists in fancy hospitals, for years. But somehow I still get very frustrated when I encounter the same trend in my own profession. I cannot even explain why. After all, I am very conscious of the managerial accountants' limitations. The main reason for writing "CFO Techniques" was the desire to fill their knowledge gaps. Just a few weeks ago I wrote about The Unimaginable Abyss of Accounting Ignorance in the small-business environment. So, I should not be surprised when I am faced with the same situation while dealing with financial auditors. Nevertheless, it still gets me.

It's audit season, so in the past couple of weeks I've been helping my client (a young company) to go through their very first independent year-end examination of books and records. It's conducted by a small CPA firm hired before my consulting engagement commenced.

Under my guidance, the client's accountants did what I always advise to do in preparation for an audit (see Chapter 30, What Guarantees Fast and Painless Audit, in "CFO Techniques"), i.e. they loaded the appointed auditor in advance with statements and schedules of data required to make all testing decisions. He definitely had time to prepare well.

The client is an importer of raw materials. So, the revenue/cost recognition and cut-off tests are very important. Accordingly, the auditor gives a list of sales and purchases he wants to test. We provide all supporting documents to verify the propriety and accuracy of each transaction. After a little while the auditor knocks on my door with a bunch of papers in his hands. "How do I know," he asks timidly, "if these invoices have correct dates?"

Inside my head I scream, "Are you fucking kidding me?" But this is not about my frustration, this is about my client. So, I calmly explain that he needs to compare the recording dates with the source documents proving the product's ownership transfer as defined by Incoterms. I go further and demonstrate with one of the selected items: this sales order states CIF (cost, insurance, freight), which means that the customer owns the product as soon as it's loaded on the transport; hence, your source document is the Bill of Lading (BL) attached right here to the Commercial Invoice and the Packing List; the BL's date is the sale's date.

He soon comes back with another file and he is very apologetic, "I am sorry, could you explain this to me again? I never heard of those… terms… before. What did you call them?" I help him out, "Incoterms?"

Will somebody, please, explain to me, since when it's Ok for an auditor, who is responsible to lenders, investors, and other outside users to verify the correctness of books and records, to come to the client without the full knowledge required to perform his tasks? Why is he not even embarrassed to admit that? Why the hell in 2012 it did not occur to him to get his ass onto the world wide web, as soon as he heard the word "Incoterms" from me, and study them?

I guess, that would be too much to ask. Hey, he didn't even know what a "metric ton" was and asked me for the ton-to-pound conversion ratio instead of finding it by himself. He continued coming over, I continued providing him with definitions and rules. At some point he got so comfortable with this teacher-student setup, he even asked my advice on how to "test for prepaid expenses." Seriously? Did he forget that I was their from the client's side, essentially being audited?

And here I have to bring up my book again. There is Chapter 29 in "CFO Techniques" called Choose Your Auditors Wisely… Dear business owners, CEOs, CFOs, and controllers, please, read it if you want to avoid paying $25,000 – $100,000 (average range for small businesses) for low-quality accounting services.