How Consistent Financial Information Can Be an Asset for Your Organization
In this episode, we are joined by interim executive Bill Hegeman. He shared different challenges and signs of trouble to look out for in companies gleaned from his decades of experience in executive positions.
He told us some of the ways he is bringing an impact in his current assignment by stressing importance on financial information:
When I came here cash was extremely tight and even when they were talking to me about this position they didn’t bring it up that much. But shortly after I got here I realized there was a severe cash situation. Then after a little more digging I found out they weren’t collecting receivables in a timely manner. They had more than about two-thirds of receivables past due and at the same time they were not paying their suppliers on a timely basis. So they were stealing money that should have been for the suppliers by not collecting from their customers. I immediately put somebody in charge to make phone calls and make direct contact with our customers, and ask for the money. And once we did that, within 5 weeks we cleaned up over 80-percent of those past due receivables and they’ve were able to pay their vendors again. It’s just a matter of discipline that you know you sell a good product at a fair price and you need to collect that. If you don’t collect that, it’s going to cause you problems. So I just put in a very specific thing that you didn’t stop until you talk to the customer and get a commitment. And once you’ve done that, we were able to collect the money. They did like working with us. That’s one of the main things.
The other thing was just the lack of credibility. That was the primary reason I was brought in is they could not provide the international parent company consistent financial information. The company was extremely frustrated that they would ask for information, then they’d ask in a different way and they’d get two completely different answers. And this went on and on again where they just couldn’t get consistent financial information out of the organization. So that’s one of the things I’ve done is really tighten the policies and procedures to make sure that we’re doing things the same way each time and that we review the information before we send it over but we make sure it’s right and it’s on time.