As I look back over the last several newsletters that I have written, it occurred to me that my recent focus has been on “details” . . . spending, cost controls, etc. While this is certainly important, I wanted to spend some time talking about strategy. During May, I had the opportunity to take part in several great strategic discussions. One was presented by the Young Presidents’ Organization (YPO) at Washington University in St. Louis and was lead by Professor Anjan Thakor; the other was a chance meeting during the St. Louis Business Journal Top 150 Awards dinner.
Whatever the forum, you owe it to your business to get away from the day to day issues of running your company and focus on “the bigger picture”. There is an old saying: “Are you working on your business or in your business?” he distinction is important. Too often, business leaders find themselves so enmeshed in daily operations that they are not doing what they are really supposed to be doing . . . guiding the business.
Spending a day (or even better a week or more) focused solely on the strategy of your business can be a rewarding experience. This can be done either exclusively with members of your management team or (even better) during an event like the one I attended at Washington University. The advantage of attending an event is that there is an outside influence and course material that poses questions about various businesses (most of which we have read about) and gives you a chance to ask yourself similar questions about your business.
More importantly, there is likely to be a framework from which to have strategic discussions with your entire team at a later date. The framework presented at Washington University suggested that there are four strategic/cultural platforms. They are listed below along with a few words describing the focus areas for each:
• Collaborative: Integration, Empowerment and Teamwork
• Creative: Change Oriented and Externally Focused.
• Control: Standards and Metrics Based. Focus on Efficiency.
• Competitive: Speed, Financial Returns and Customer Need.
While no organization exclusively expresses only one characteristic (they all have some degrees from each of the four areas), most organizations have a dominant trait. While I can’t do justice to a full day seminar in such a short space, I wanted to present these ideas as “food for thought.”
Regardless of the way in which you choose to frame your strategic discussions, I would encourage every leadership team to invest the time to engage in strategic discussions that provide the opportunity to think differently about the business.
Finally, I want to close with a practical question. Does your finance leader help you think strategically? Rather than providing a page full of numbers, can they offer insightful thoughts about what the numbers mean? More importantly, can they take it to the next level and suggest actions that the company should take to improve its position in the marketplace? Your business both needs and deserves that kind of thinking!
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to
your cash is flowing. know where.
Copyright @ 2008 Homza Consulting, Inc.
Monday, March 1, 2010
Because It Matters! (April 2008)
When I walk into a new organization I question every cost that crosses my desk. Why? Because it matters! Every dollar matters and experience has taught me there is a lot of waste out there! Obviously, I question the bigger items first, but eventually I question even the small items. Below are a few examples. And please note that I’m intentionally sharing examples of “small stuff” to make a point . . . the bigger stories require a bit more time and space than we have here!
An employee was responsible for ordering some company logo shirts! She said, “I was talking with another employee and we were wondering if we could use company American Express points and get the shirts without spending any cash!” That’s a great idea! These two people were thinking like company owners! While the dollars involved are relatively small, it told senior management that these people both have “their head in the game”. Not only did people take notice of their attitude, but their idea earned them each a $50 American Express gift card as well!
I recently asked about a $78 monthly invoice. It didn’t take long to learn that the cost was supposed to be passed along to a customer two years ago but no one ever took the time to do it (the customer had even agreed)! I instructed that the monthly charge be added to the next invoice and guess what!? The customer paid it! No questions. Let’s think about the “math” on this one. $78 per month for the last two years is $1,872 that just slipped away. Given that the company was paying the bill, any money received from the customer would fall through to the bottom line. Over a five year period (the length of the customer contract), this little $78 expense is worth $4,680. While it’s not enough money to save the world, these things add up over time and it was certainly worth the 20-30 minutes it took me to find the answer!
I saw a line on a lease invoice for storage space. I asked to see the space and found that it was filled mostly with empty cardboard boxes and a never used ping pong table. I checked the lease document and found that it was on a month to month basis. If you have been paying attention, I’m sure you can guess what I did next. I talked to the person responsible for the area and explained the costs. And this wasn’t some $50 per month lease at a public storage facility; this was $577 per month in a downtown building! That’s $6,924 per year. At the same time, the staff who were responsible for this area had just asked to spend $7,000 on new computer equipment. Interesting how those numbers almost match!
If you think these small examples, are interesting, you should ask me about the bigger ones sometime! Some people think that questioning expenditures is the job of finance alone. But I think it is the job of everyone who touches the process of spending money. Ask! It matters!
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to And, remember . . .
your cash is flowing. know where.
Copyright @ 2008 Homza Consulting, Inc.
An employee was responsible for ordering some company logo shirts! She said, “I was talking with another employee and we were wondering if we could use company American Express points and get the shirts without spending any cash!” That’s a great idea! These two people were thinking like company owners! While the dollars involved are relatively small, it told senior management that these people both have “their head in the game”. Not only did people take notice of their attitude, but their idea earned them each a $50 American Express gift card as well!
I recently asked about a $78 monthly invoice. It didn’t take long to learn that the cost was supposed to be passed along to a customer two years ago but no one ever took the time to do it (the customer had even agreed)! I instructed that the monthly charge be added to the next invoice and guess what!? The customer paid it! No questions. Let’s think about the “math” on this one. $78 per month for the last two years is $1,872 that just slipped away. Given that the company was paying the bill, any money received from the customer would fall through to the bottom line. Over a five year period (the length of the customer contract), this little $78 expense is worth $4,680. While it’s not enough money to save the world, these things add up over time and it was certainly worth the 20-30 minutes it took me to find the answer!
I saw a line on a lease invoice for storage space. I asked to see the space and found that it was filled mostly with empty cardboard boxes and a never used ping pong table. I checked the lease document and found that it was on a month to month basis. If you have been paying attention, I’m sure you can guess what I did next. I talked to the person responsible for the area and explained the costs. And this wasn’t some $50 per month lease at a public storage facility; this was $577 per month in a downtown building! That’s $6,924 per year. At the same time, the staff who were responsible for this area had just asked to spend $7,000 on new computer equipment. Interesting how those numbers almost match!
If you think these small examples, are interesting, you should ask me about the bigger ones sometime! Some people think that questioning expenditures is the job of finance alone. But I think it is the job of everyone who touches the process of spending money. Ask! It matters!
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to And, remember . . .
your cash is flowing. know where.
Copyright @ 2008 Homza Consulting, Inc.
Get The Answer You Want (March 2008)
During any given week, I get multiple requests that sound something like this: “Can we spend $2,500 on xyz?” Or, “We need to buy abc and it’s going to cost $12,000.” Well, actually, that last one isn’t technically a request; it’s just a statement begging for an affirmative response.
My reply is almost always the same. What are our options? Is this the best solution given where we are today? Have we gotten other prices? What happens if we don’t spend the money? What’s our return if we do spend the money? Does it help bring in extra revenue? Does the expenditure save other costs? Does it meaningfully improve customer service? Why are you recommending we spend this money?
Often the person asking the question hasn’t given a moment of thought to any of these questions. The most typical and somewhat incredulous reply to my question is “We’ve been doing it this way for years”. For the record, “We’ve been doing it this way for years” is never an acceptable response to any CFO.
Afterwards, the requestor can usually be heard saying something like “Finance didn’t approve the request”. I guess that is factually accurate, but requests like the ones above don’t merit approval. So when the requestor says that they are “waiting for finance approval” the truth is that finance is waiting for the requestor to perform reasonable due diligence and come forward with thoughtful recommendation. In other words, present a business case for the expenditure.
Do you want a fast response to your request? Try walking into any CFO’s office with a request like this (preferably in writing). “I’m requesting an expenditure of $5,000. I believe this is necessary because it will reduce the number of calls coming into customer service by 10%. While we can’t eliminate any hard costs, it will give us more time to tackle other projects, specifically, improved reporting on trouble tickets. I’ve looked at other options and there are competing products that start at $4,000. While my recommendation isn’t the cheapest, it is the industry leader and our research indicates it is superior to any of its competitors. I think the company is better served by spending a bit more than going with the lowest cost solution.”
Let me assure you, this kind of request (depending on the actual dollar amount, budget, etc.) will get attention and be quickly approved. It tells “finance” that the person asking for the funds has both thought about the request performed reasonable due diligence. They are making a recommendation, not asking for permission! That’s a very important distinction. It’s so important, that I’m going to repeat it! Don’t ask for permission; make a recommendation!
When you seek to spend money, everyone knows that you want the answer to be “yes” so rather than make it difficult for someone to approve the request, why not make it easy? Not only that, if you are responsible for spending, it’s part of your job!
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to And, remember . . .
your cash is flowing. know where.
Copyright @ 2008 Homza Consulting, Inc.
My reply is almost always the same. What are our options? Is this the best solution given where we are today? Have we gotten other prices? What happens if we don’t spend the money? What’s our return if we do spend the money? Does it help bring in extra revenue? Does the expenditure save other costs? Does it meaningfully improve customer service? Why are you recommending we spend this money?
Often the person asking the question hasn’t given a moment of thought to any of these questions. The most typical and somewhat incredulous reply to my question is “We’ve been doing it this way for years”. For the record, “We’ve been doing it this way for years” is never an acceptable response to any CFO.
Afterwards, the requestor can usually be heard saying something like “Finance didn’t approve the request”. I guess that is factually accurate, but requests like the ones above don’t merit approval. So when the requestor says that they are “waiting for finance approval” the truth is that finance is waiting for the requestor to perform reasonable due diligence and come forward with thoughtful recommendation. In other words, present a business case for the expenditure.
Do you want a fast response to your request? Try walking into any CFO’s office with a request like this (preferably in writing). “I’m requesting an expenditure of $5,000. I believe this is necessary because it will reduce the number of calls coming into customer service by 10%. While we can’t eliminate any hard costs, it will give us more time to tackle other projects, specifically, improved reporting on trouble tickets. I’ve looked at other options and there are competing products that start at $4,000. While my recommendation isn’t the cheapest, it is the industry leader and our research indicates it is superior to any of its competitors. I think the company is better served by spending a bit more than going with the lowest cost solution.”
Let me assure you, this kind of request (depending on the actual dollar amount, budget, etc.) will get attention and be quickly approved. It tells “finance” that the person asking for the funds has both thought about the request performed reasonable due diligence. They are making a recommendation, not asking for permission! That’s a very important distinction. It’s so important, that I’m going to repeat it! Don’t ask for permission; make a recommendation!
When you seek to spend money, everyone knows that you want the answer to be “yes” so rather than make it difficult for someone to approve the request, why not make it easy? Not only that, if you are responsible for spending, it’s part of your job!
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to And, remember . . .
your cash is flowing. know where.
Copyright @ 2008 Homza Consulting, Inc.
Don't Go Too Big! (February 2008)
There was a saying during the .com boom, “Go Big or Go Home”. It meant that anything worth doing was worth doing in a big way. Hence, many of the start-up companies of the day had world domination on the mind and were spending huge amounts of cash to invest in growth.
Ironically, that very philosophy was part of the reason that many of these companies failed. While it’s smart to plan for growth, there is a huge difference between planning for potential upside and acting as if it that upside is a certainty. In the first case, the thought process is “How will we respond if volume doubles or triples during the next 12 months? How will we staff, obtain additional office space, meet customer demand, etc?” Generally, that’s a smart way to think (and should be accompanied by some downside thinking as well).
On the other hand, when one assumes that growth is a certainty, then the attitude tends to be “let’s just buy it now as we’re going to need it someday anyway”. The spending associated with that thinking can (and has) crashed companies. While this phenomenon was typical of the .com days, it can still be seen today when companies are exclusively focused on growth to the exclusion of day-to-day operations and current positive cash flow.
There is a cost associated with planning for growth that doesn’t occur. The costs show as over inflated rents due to too much space and excessive build-out costs, software systems that can support substantial growth but are excessive for current operations, employee benefits packages that are not “market” for the company’s size, uncontrolled spending of “future” profits, and a myriad of other costs.
While planning for growth is an important step for any business, “assuming” growth and needlessly committing to costs substantially in excess of those required to support near term business can be devastating for companies. It can starve the company of resources required for current day operations. The company is then forced to either “do without” or face the option of taking on additional debt or equity (dilutive of current shareholders) in order to fund those costs.
The best way to avoid this trap is to plan spending based upon milestones or accomplishments. Linking spending to milestones which measure success (particularly marketplace success) is an approach that will assure you (and investors) that there is a reason to be optimistic about the future. Putting these milestones in writing will force one to measure actual results against expectations and therefore force a realistic assessment of the business compared to those expectations.
While I recognize that this approach is less exciting than the approach which assumes big growth and therefore big spending, it’s far more likely to keep you and your company in the game much longer.
As most of the .com companies learned, when they went big (too big) and the result was that they indeed “went home”. Remember, if you go too big, you will likely go home.
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to And, remember . . .
your cash is flowing. know where.
Copyright @ 2008 Homza Consulting, Inc.
Ironically, that very philosophy was part of the reason that many of these companies failed. While it’s smart to plan for growth, there is a huge difference between planning for potential upside and acting as if it that upside is a certainty. In the first case, the thought process is “How will we respond if volume doubles or triples during the next 12 months? How will we staff, obtain additional office space, meet customer demand, etc?” Generally, that’s a smart way to think (and should be accompanied by some downside thinking as well).
On the other hand, when one assumes that growth is a certainty, then the attitude tends to be “let’s just buy it now as we’re going to need it someday anyway”. The spending associated with that thinking can (and has) crashed companies. While this phenomenon was typical of the .com days, it can still be seen today when companies are exclusively focused on growth to the exclusion of day-to-day operations and current positive cash flow.
There is a cost associated with planning for growth that doesn’t occur. The costs show as over inflated rents due to too much space and excessive build-out costs, software systems that can support substantial growth but are excessive for current operations, employee benefits packages that are not “market” for the company’s size, uncontrolled spending of “future” profits, and a myriad of other costs.
While planning for growth is an important step for any business, “assuming” growth and needlessly committing to costs substantially in excess of those required to support near term business can be devastating for companies. It can starve the company of resources required for current day operations. The company is then forced to either “do without” or face the option of taking on additional debt or equity (dilutive of current shareholders) in order to fund those costs.
The best way to avoid this trap is to plan spending based upon milestones or accomplishments. Linking spending to milestones which measure success (particularly marketplace success) is an approach that will assure you (and investors) that there is a reason to be optimistic about the future. Putting these milestones in writing will force one to measure actual results against expectations and therefore force a realistic assessment of the business compared to those expectations.
While I recognize that this approach is less exciting than the approach which assumes big growth and therefore big spending, it’s far more likely to keep you and your company in the game much longer.
As most of the .com companies learned, when they went big (too big) and the result was that they indeed “went home”. Remember, if you go too big, you will likely go home.
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to And, remember . . .
your cash is flowing. know where.
Copyright @ 2008 Homza Consulting, Inc.
Watch For Red Flags! (January 2008)
Some years ago, I was offered an opportunity to join a well funded start-up company. As part of my due diligence I read the business plan and shared it with a trusted advisor to help me evaluate the company. We talked about some specific concerns. As we talked, it was clear that I was weighing my personal desires (move to a new city, a much needed change from big corporate environments to a smaller company, etc.) more heavily than the business plan. I won’t forget his words to me on one of our calls. He said, “There are red flags. You can choose to ignore them by calling them pink or magenta, but we both know that they are red flags.”
If you’re in St. Louis and you read the St. Louis Business Journal, you’ve probably seen the stories about the “fig” (a St. Louis based company) bankruptcy. Most recently, it accounted the tales of numerous creditors and the amount of their claims in the bankruptcy filing. While I empathize with anyone who is forced to recover through the bankruptcy process, it’s probably fair to suggest that at least some of these suppliers chose to ignore the red flags that were in front of them (or as I had done, chose to believe that the flags weren’t actually red, but rather pink, magenta, or some other color that suggested less severe warnings).
When reading the articles, it is clear that many of the creditors extended fig many months of credit. I think an interesting question is how many of these vendors consciously evaluated the risks of extending further credit in light of slow payment for past goods or services versus how many simply chose to ignore the warning signs that were in front of them? It’s likely that in most cases, vendors chose to believe the best case scenario of increased business and profits to follow (well, at least as soon as they got paid). Knowingly or unknowingly, those extending significant credit were acting as mini venture capital firms and deserved to earn returns appropriate for the risks they were incurring.
When a customer isn’t making timely payments they are effectively asking you (the vendor) to act as a lender. In the case of fig, suppliers weren’t just supplying short-term, low risk financing; they were effectively supplying high-risk venture funding. If they didn’t realize the risks that they were taking, they certainly couldn’t ask for an appropriate return for that risk.
Choosing to accept the risks of extending significant financing to customers is a business decision that deserves careful consideration. Every situation is different and no one answer can address every situation. Extending credit to a growing customer could serve to secure a long term relationship and could prove very profitable. However, simply choosing to ignore the red flags is clearly a bad path. Even if things turn out well in the end, it will be due to luck rather than good business judgment.
In my case, I ignored the red flags. I quelled my inner voice and told myself other people who read the business plan were smarter or understood it better. Every time that I have done this, I’ve regretted it, even when things turn out well in the end.
Never ignore red flags. Heed their warning. Understand, evaluate, and then make a thoughtful decision.
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to And, remember . . .
your cash is flowing. know where.
Copyright @ 2008 Homza Consulting, Inc.
If you’re in St. Louis and you read the St. Louis Business Journal, you’ve probably seen the stories about the “fig” (a St. Louis based company) bankruptcy. Most recently, it accounted the tales of numerous creditors and the amount of their claims in the bankruptcy filing. While I empathize with anyone who is forced to recover through the bankruptcy process, it’s probably fair to suggest that at least some of these suppliers chose to ignore the red flags that were in front of them (or as I had done, chose to believe that the flags weren’t actually red, but rather pink, magenta, or some other color that suggested less severe warnings).
When reading the articles, it is clear that many of the creditors extended fig many months of credit. I think an interesting question is how many of these vendors consciously evaluated the risks of extending further credit in light of slow payment for past goods or services versus how many simply chose to ignore the warning signs that were in front of them? It’s likely that in most cases, vendors chose to believe the best case scenario of increased business and profits to follow (well, at least as soon as they got paid). Knowingly or unknowingly, those extending significant credit were acting as mini venture capital firms and deserved to earn returns appropriate for the risks they were incurring.
When a customer isn’t making timely payments they are effectively asking you (the vendor) to act as a lender. In the case of fig, suppliers weren’t just supplying short-term, low risk financing; they were effectively supplying high-risk venture funding. If they didn’t realize the risks that they were taking, they certainly couldn’t ask for an appropriate return for that risk.
Choosing to accept the risks of extending significant financing to customers is a business decision that deserves careful consideration. Every situation is different and no one answer can address every situation. Extending credit to a growing customer could serve to secure a long term relationship and could prove very profitable. However, simply choosing to ignore the red flags is clearly a bad path. Even if things turn out well in the end, it will be due to luck rather than good business judgment.
In my case, I ignored the red flags. I quelled my inner voice and told myself other people who read the business plan were smarter or understood it better. Every time that I have done this, I’ve regretted it, even when things turn out well in the end.
Never ignore red flags. Heed their warning. Understand, evaluate, and then make a thoughtful decision.
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to And, remember . . .
your cash is flowing. know where.
Copyright @ 2008 Homza Consulting, Inc.
Update for 2008! (December 2007)
As we come to the end of 2007 and enter 2008, there is no better time than now to think about doing things differently in the New Year. While I am not a big fan of New Year’s Resolutions (any day is a great day to start a new habit), it is a perfect time to update financial reporting. Finish 2007 with current reporting so you have complete year of trends on the same basis. But consider beginning January with a new look to your financial reporting. It is the perfect time to decide what is working and what is not.
When developing financial reporting (aka accounting reports), strive to make sure that they provide meaningful information and can be easily understood by all of the users. Specifically,
1. Use meaningful accounts with intuitive descriptions (update them as needed to reflect the current business, not what it was ten years ago!).
2. Make sure cost centers reflect the organization chart and tree to the person who is responsible for spending. Hold them accountable to monthly results.
3. Allocate costs only where meaningful. Avoid trivial allocations to people who have no control over the spending.
4. Utilize month-to-month reporting so that people can see trends as they follow the columns across the page (generally six months works well).
5. Answer questions about the business (gross margin by product line or customer, or fixed versus variable costs analysis, for example) through meaningful analysis.
6. Integrate any important analysis into regular reporting where appropriate.
7. Make reporting transparent . . . it should be easy to understand how decision making and actions result in profit and loss.
8. Simplify the process of producing the reports by eliminating unnecessary steps and automating those that remain (recurring journal entries are a good example). Make your accounting system work for you.
9. Distribute your reports to those with spending authority and key management.
10. Seek input from the users as to what is meaningful to them and what will help them do their job better.
11. Ask for, or provide, (depending on your role) written explanations of changes from prior periods (either last month or same month year ago) and to budget or plan.
12. Get the entire organization focused on a few key numbers so that everyone has an appreciation for the results of the organization.
Financial reporting is meant to be a tool that helps you drive your business forward through better understanding of revenue, margin, costs and important financial ratios. Your reporting should provide information in a meaningful way to help drive the business to increased levels of profitability and cash flow.
In business, change is a constant. Your financial reporting should reflect those changes!
Happy New Year with Best Wishes for a Prosperous 2008 with Positive Cash Flow!
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to And, remember . . .
your cash is flowing. know where.
Copyright @ 2007 Homza Consulting, Inc.
When developing financial reporting (aka accounting reports), strive to make sure that they provide meaningful information and can be easily understood by all of the users. Specifically,
1. Use meaningful accounts with intuitive descriptions (update them as needed to reflect the current business, not what it was ten years ago!).
2. Make sure cost centers reflect the organization chart and tree to the person who is responsible for spending. Hold them accountable to monthly results.
3. Allocate costs only where meaningful. Avoid trivial allocations to people who have no control over the spending.
4. Utilize month-to-month reporting so that people can see trends as they follow the columns across the page (generally six months works well).
5. Answer questions about the business (gross margin by product line or customer, or fixed versus variable costs analysis, for example) through meaningful analysis.
6. Integrate any important analysis into regular reporting where appropriate.
7. Make reporting transparent . . . it should be easy to understand how decision making and actions result in profit and loss.
8. Simplify the process of producing the reports by eliminating unnecessary steps and automating those that remain (recurring journal entries are a good example). Make your accounting system work for you.
9. Distribute your reports to those with spending authority and key management.
10. Seek input from the users as to what is meaningful to them and what will help them do their job better.
11. Ask for, or provide, (depending on your role) written explanations of changes from prior periods (either last month or same month year ago) and to budget or plan.
12. Get the entire organization focused on a few key numbers so that everyone has an appreciation for the results of the organization.
Financial reporting is meant to be a tool that helps you drive your business forward through better understanding of revenue, margin, costs and important financial ratios. Your reporting should provide information in a meaningful way to help drive the business to increased levels of profitability and cash flow.
In business, change is a constant. Your financial reporting should reflect those changes!
Happy New Year with Best Wishes for a Prosperous 2008 with Positive Cash Flow!
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to And, remember . . .
your cash is flowing. know where.
Copyright @ 2007 Homza Consulting, Inc.
Spend It Like It's Your Own! (November 2007)
Last month, I challenged people to think about not just their actions in the work place, but more importantly, the result of what they (or their employees) were doing! This month continues on a similar theme (accountability) and suggests that everyone should spend company money like it’s their own! I constantly come across situations where employees are spending company money very much unlike it was their own.
While there are some people who treat company funds as if they were their own (you should value these employees), there are also those who don’t give much of a thought to how they spend the company’s money. The general attitude can often be described as “it’s not my money”. This is so common that there is a well recognized term for it in corporate circles. It’s called “OPM” which stands for “Other People’s Money”.
While the extreme example of this attitude is Dennis Kozlowski of Tyco International who spent company money lavishly (remember the $6,000 shower curtain) on himself and those close to him, most companies have small examples of spending that could be better managed.
More common place examples of this are:
• Company meals that are more frequent or more expensive than necessary,
• Travel accommodations that don’t consider reasonable or cost effective alternatives,
• Cell phones or internet plans that could be cheaper if only someone asked,
• Expense requests without reasonable alternatives or multiple bids,
• Company credit cards which go unchecked.
Now many are probably thinking that it’s at this point that I’d suggest a myriad of controls to prevent over-spending. Quite the contrary! Those who know me know that I really don’t like policies and procedures.
Years ago, a company for which I worked issued a new travel policy. It was so complicated, many (myself included) didn’t bother to read or understand it. When my boss asked me to explain it to him, I told him that the word within the company was that it was so hard to understand virtually no one had read it. He said to me, “But you just took a trip, how did you book your tickets?” My reply, “I booked the tickets that I would have booked if I was paying for the trip myself.” He thought for a moment and said, “Thanks, that’s what I’ll do!”
Rather than policies and procedures, I’d like to convince everyone that the best and simplest approach is for employees to act as if they are spending their own money. Because, in effect, they are! Face it, there is only so much money to go around, and money that is wasted in one area isn’t available to grow the business, provide employee raises, or make necessary capital improvements. Obviously, getting employees to understand this is easier said than done, but it is not impossible.
Do your employees spend company money like it’s their own?
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to ken@homza.com And, remember . . .
your cash is flowing. know where.
Last month, I challenged people to think about not just their actions in the work place, but more importantly, the result of what they (or their employees) were doing! This month continues on a similar theme (accountability) and suggests that everyone should spend company money like it’s their own! I constantly come across situations where employees are spending company money very much unlike it was their own.
While there are some people who treat company funds as if they were their own (you should value these employees), there are also those who don’t give much of a thought to how they spend the company’s money. The general attitude can often be described as “it’s not my money”. This is so common that there is a well recognized term for it in corporate circles. It’s called “OPM” which stands for “Other People’s Money”.
While the extreme example of this attitude is Dennis Kozlowski of Tyco International who spent company money lavishly (remember the $6,000 shower curtain) on himself and those close to him, most companies have small examples of spending that could be better managed.
More common place examples of this are:
• Company meals that are more frequent or more expensive than necessary,
• Travel accommodations that don’t consider reasonable or cost effective alternatives,
• Cell phones or internet plans that could be cheaper if only someone asked,
• Expense requests without reasonable alternatives or multiple bids,
• Company credit cards which go unchecked.
Now many are probably thinking that it’s at this point that I’d suggest a myriad of controls to prevent over-spending. Quite the contrary! Those who know me know that I really don’t like policies and procedures.
Years ago, a company for which I worked issued a new travel policy. It was so complicated, many (myself included) didn’t bother to read or understand it. When my boss asked me to explain it to him, I told him that the word within the company was that it was so hard to understand virtually no one had read it. He said to me, “But you just took a trip, how did you book your tickets?” My reply, “I booked the tickets that I would have booked if I was paying for the trip myself.” He thought for a moment and said, “Thanks, that’s what I’ll do!”
Rather than policies and procedures, I’d like to convince everyone that the best and simplest approach is for employees to act as if they are spending their own money. Because, in effect, they are! Face it, there is only so much money to go around, and money that is wasted in one area isn’t available to grow the business, provide employee raises, or make necessary capital improvements. Obviously, getting employees to understand this is easier said than done, but it is not impossible.
Do your employees spend company money like it’s their own?
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to ken@homza.com And, remember . . .
your cash is flowing. know where. Last month, I challenged people to think about not just their actions in the work place, but more importantly, the result of what they (or their employees) were doing! This month continues on a similar theme (accountability) and suggests that everyone should spend company money like it’s their own! I constantly come across situations where employees are spending company money very much unlike it was their own.
While there are some people who treat company funds as if they were their own (you should value these employees), there are also those who don’t give much of a thought to how they spend the company’s money. The general attitude can often be described as “it’s not my money”. This is so common that there is a well recognized term for it in corporate circles. It’s called “OPM” which stands for “Other People’s Money”.
While the extreme example of this attitude is Dennis Kozlowski of Tyco International who spent company money lavishly (remember the $6,000 shower curtain) on himself and those close to him, most companies have small examples of spending that could be better managed.
More common place examples of this are:
• Company meals that are more frequent or more expensive than necessary,
• Travel accommodations that don’t consider reasonable or cost effective alternatives,
• Cell phones or internet plans that could be cheaper if only someone asked,
• Expense requests without reasonable alternatives or multiple bids,
• Company credit cards which go unchecked.
Now many are probably thinking that it’s at this point that I’d suggest a myriad of controls to prevent over-spending. Quite the contrary! Those who know me know that I really don’t like policies and procedures.
Years ago, a company for which I worked issued a new travel policy. It was so complicated, many (myself included) didn’t bother to read or understand it. When my boss asked me to explain it to him, I told him that the word within the company was that it was so hard to understand virtually no one had read it. He said to me, “But you just took a trip, how did you book your tickets?” My reply, “I booked the tickets that I would have booked if I was paying for the trip myself.” He thought for a moment and said, “Thanks, that’s what I’ll do!”
Rather than policies and procedures, I’d like to convince everyone that the best and simplest approach is for employees to act as if they are spending their own money. Because, in effect, they are! Face it, there is only so much money to go around, and money that is wasted in one area isn’t available to grow the business, provide employee raises, or make necessary capital improvements. Obviously, getting employees to understand this is easier said than done, but it is not impossible.
Do your employees spend company money like it’s their own?
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to And, remember . . .
your cash is flowing. know where.
Copyright @ 2007 Homza Consulting, Inc.
While there are some people who treat company funds as if they were their own (you should value these employees), there are also those who don’t give much of a thought to how they spend the company’s money. The general attitude can often be described as “it’s not my money”. This is so common that there is a well recognized term for it in corporate circles. It’s called “OPM” which stands for “Other People’s Money”.
While the extreme example of this attitude is Dennis Kozlowski of Tyco International who spent company money lavishly (remember the $6,000 shower curtain) on himself and those close to him, most companies have small examples of spending that could be better managed.
More common place examples of this are:
• Company meals that are more frequent or more expensive than necessary,
• Travel accommodations that don’t consider reasonable or cost effective alternatives,
• Cell phones or internet plans that could be cheaper if only someone asked,
• Expense requests without reasonable alternatives or multiple bids,
• Company credit cards which go unchecked.
Now many are probably thinking that it’s at this point that I’d suggest a myriad of controls to prevent over-spending. Quite the contrary! Those who know me know that I really don’t like policies and procedures.
Years ago, a company for which I worked issued a new travel policy. It was so complicated, many (myself included) didn’t bother to read or understand it. When my boss asked me to explain it to him, I told him that the word within the company was that it was so hard to understand virtually no one had read it. He said to me, “But you just took a trip, how did you book your tickets?” My reply, “I booked the tickets that I would have booked if I was paying for the trip myself.” He thought for a moment and said, “Thanks, that’s what I’ll do!”
Rather than policies and procedures, I’d like to convince everyone that the best and simplest approach is for employees to act as if they are spending their own money. Because, in effect, they are! Face it, there is only so much money to go around, and money that is wasted in one area isn’t available to grow the business, provide employee raises, or make necessary capital improvements. Obviously, getting employees to understand this is easier said than done, but it is not impossible.
Do your employees spend company money like it’s their own?
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to ken@homza.com And, remember . . .
your cash is flowing. know where.
Last month, I challenged people to think about not just their actions in the work place, but more importantly, the result of what they (or their employees) were doing! This month continues on a similar theme (accountability) and suggests that everyone should spend company money like it’s their own! I constantly come across situations where employees are spending company money very much unlike it was their own.
While there are some people who treat company funds as if they were their own (you should value these employees), there are also those who don’t give much of a thought to how they spend the company’s money. The general attitude can often be described as “it’s not my money”. This is so common that there is a well recognized term for it in corporate circles. It’s called “OPM” which stands for “Other People’s Money”.
While the extreme example of this attitude is Dennis Kozlowski of Tyco International who spent company money lavishly (remember the $6,000 shower curtain) on himself and those close to him, most companies have small examples of spending that could be better managed.
More common place examples of this are:
• Company meals that are more frequent or more expensive than necessary,
• Travel accommodations that don’t consider reasonable or cost effective alternatives,
• Cell phones or internet plans that could be cheaper if only someone asked,
• Expense requests without reasonable alternatives or multiple bids,
• Company credit cards which go unchecked.
Now many are probably thinking that it’s at this point that I’d suggest a myriad of controls to prevent over-spending. Quite the contrary! Those who know me know that I really don’t like policies and procedures.
Years ago, a company for which I worked issued a new travel policy. It was so complicated, many (myself included) didn’t bother to read or understand it. When my boss asked me to explain it to him, I told him that the word within the company was that it was so hard to understand virtually no one had read it. He said to me, “But you just took a trip, how did you book your tickets?” My reply, “I booked the tickets that I would have booked if I was paying for the trip myself.” He thought for a moment and said, “Thanks, that’s what I’ll do!”
Rather than policies and procedures, I’d like to convince everyone that the best and simplest approach is for employees to act as if they are spending their own money. Because, in effect, they are! Face it, there is only so much money to go around, and money that is wasted in one area isn’t available to grow the business, provide employee raises, or make necessary capital improvements. Obviously, getting employees to understand this is easier said than done, but it is not impossible.
Do your employees spend company money like it’s their own?
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to ken@homza.com And, remember . . .
your cash is flowing. know where. Last month, I challenged people to think about not just their actions in the work place, but more importantly, the result of what they (or their employees) were doing! This month continues on a similar theme (accountability) and suggests that everyone should spend company money like it’s their own! I constantly come across situations where employees are spending company money very much unlike it was their own.
While there are some people who treat company funds as if they were their own (you should value these employees), there are also those who don’t give much of a thought to how they spend the company’s money. The general attitude can often be described as “it’s not my money”. This is so common that there is a well recognized term for it in corporate circles. It’s called “OPM” which stands for “Other People’s Money”.
While the extreme example of this attitude is Dennis Kozlowski of Tyco International who spent company money lavishly (remember the $6,000 shower curtain) on himself and those close to him, most companies have small examples of spending that could be better managed.
More common place examples of this are:
• Company meals that are more frequent or more expensive than necessary,
• Travel accommodations that don’t consider reasonable or cost effective alternatives,
• Cell phones or internet plans that could be cheaper if only someone asked,
• Expense requests without reasonable alternatives or multiple bids,
• Company credit cards which go unchecked.
Now many are probably thinking that it’s at this point that I’d suggest a myriad of controls to prevent over-spending. Quite the contrary! Those who know me know that I really don’t like policies and procedures.
Years ago, a company for which I worked issued a new travel policy. It was so complicated, many (myself included) didn’t bother to read or understand it. When my boss asked me to explain it to him, I told him that the word within the company was that it was so hard to understand virtually no one had read it. He said to me, “But you just took a trip, how did you book your tickets?” My reply, “I booked the tickets that I would have booked if I was paying for the trip myself.” He thought for a moment and said, “Thanks, that’s what I’ll do!”
Rather than policies and procedures, I’d like to convince everyone that the best and simplest approach is for employees to act as if they are spending their own money. Because, in effect, they are! Face it, there is only so much money to go around, and money that is wasted in one area isn’t available to grow the business, provide employee raises, or make necessary capital improvements. Obviously, getting employees to understand this is easier said than done, but it is not impossible.
Do your employees spend company money like it’s their own?
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to And, remember . . .
your cash is flowing. know where.
Copyright @ 2007 Homza Consulting, Inc.
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