Why Accounting, Finance Can be Ideal Careers for Women

 

Nov. 17, 2011

Women searching for a career or looking to make a change might be well-served if they consider accounting or finance. Why? Such a career affords a better balance between a career and personal life. That’s one of the conclusions from a 2011 study by a recruiting firm, Mergis.

“It is encouraging to the profession to note that both men and women are highly likely to recommend the profession to others,” says Patricia Dinunzio, the Mergis regional managing director. “But, that said, one of the greatest take-aways from this survey is that there is a clear need for accounting and finance mentorship programs.”

About 66 percent of surveyed men and women think success in accounting and finance is achieved by getting a mentor, but only 31 percent of men and 28 percent of women have ever had a mentor.

Eighty-six percent of men and 80 percent of women say they’d advise relatives to pursue such a career. Moreover, for young women, 88 percent of men and 86 percent of women say the career would be advantageous.

More Mergis results:

Best Practices for Encouraging Young Women to Enter the Field

• More than half of women (61 percent) and men (55 percent) believe there is a need for greater promotion of accounting and finance as a career choice for women.
• Half of the women and men surveyed claim greater mentoring programs would help.
• Thirty-five percent of women and 26 percent of men feel greater education programs about the field are necessary to pique interest.
• Greater availability of scholarship grants would also be an incentive to further promote the career, say 34 percent of women, while only 13 percent of men polled feel that to be the case.

Most Important Factors Leading to Personal Career Success in Finance and Accounting

• About half of both men (48 percent) and women (51 percent) rate accounting and finance skills and expertise as the top factor to success.
• Relationship building and personal networking came in second according to 41 percent of women and 39 percent of men.
• Forty-one percent of men believe that developing management skills is a priority as compared to only 22 percent of women who do.
• Approximately one-third of men (37 percent) and women (34 percent) claim gaining accounting and finance experience is critical to personal success.

Less Than Half (48 Percent) Of Women in Accounting & Finance Satisfied With Their Careers

• Women are less satisfied with the progression of their accounting and finance careers than men. Specifically, 59 percent of male workers in accounting and finance consider themselves to be satisfied, as opposed to 48 percent of women.
• Women in accounting and finance ranked being challenged (35 percent), compensation (27 percent) and flexibility (12 percent) as the most important factors to satisfaction in their career.
• On the other hand, men in accounting and finance ranked compensation (35 percent), being challenged (29 percent) and flexibility (12 percent) as the most important factors to satisfaction in their career.

See the complete survey results and methodology.

As a result of the economy, it’s true that many accounting firms are working overtime to make their numbers. But the survey caught my eye because I’ve long believed detail-minded professionals who are good with numbers and undecided about their careers should consider a career in accounting or finance. There will always be a demand for such skills in the public and private sectors.

From the Coach’s Corner, do you need a career change? Here are 10 steps for a career makeover. Are you job hunting? Tips to land your dream job with style, substance.

“Only accountants can save the world! – through peace, goodwill and reconciliations.”

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

 

Embezzlement – Tips to Protect Your Nonprofit or Company Assets

 

Embezzlement is a widespread nightmare in business and the public sector. If you surf the Internet using the key word, embezzlement, you’ll find seemingly countless headlines.

Upper management commits 18 percent of fraud, according to the Association of Certified Fraud Examiners (ACFE) in 2010. ACFE also said accounting department employees commit 29 percent of fraud.

Not convinced embezzlement is rampant?

Consider these news stories:

• Sparks office manager sentenced in 750K embezzlement case  – The $750,000 embezzlement resulting in 60 Nevada construction workers being laid off.
• Auditor praises UW’s handling of embezzlement case – It was too late, but the University of Washington Medical Center was praised for its handling of a $250,000 employee embezzlement by the state Auditor’s Office.
• Va sheriff charged with embezzlement, bribery – In Virginia, the Middlesex County Sheriff was indicted on 25 felony counts on alleged embezzlement and other charges.
• Ex-DPS accountant pleads guilty to embezzlement – In Detroit Public schools, a former accountant pleaded guilty to embezzlement and a related charge.

Yes, embezzlement can happen anywhere to anybody. Management has to create an environment that will deter dishonesty. That’s a major responsibility of the board of directors and management.

Thorough background checks on new employees are necessary. In new-employee orientation, discuss your company’s financial principles. In a businesslike manner, emphasize that deceit, fraud or theft aren’t tolerated. When policies are explained well, good employees will respect proper internal financial controls.

After all, without internal controls it’s easy for an employee to hide checks that arrive from customers and stamp them with their own personal bank account numbers. And if invoices aren’t recorded, even salespeople can personally benefit by selling products on the black-market or Craigslist.

Actually, it doesn’t hurt for everyone to know financial procedures. As a business-performance consultant, I’ve seen this movie many times including embezzlement at a religious nonprofit, $200,000 in missing inventory at a retailer, and $250,000 in theft at a water utility.

In each case, the management solutions were financial and inventory controls, as well as training of all employees in ethics.

In the water utility situation, the budget became tight and management intended to hire me for PR crisis management to calm utility ratepayers. But I insisted on training the employees. I knew the priority was installing controls, and PR would have to come later. Fortunately, the training program resulted in improved morale, teamwork and communication. It greatly alleviated the PR crisis, so PR strategies were unnecessary.

Yes, fraud could have been prevented by alert co-workers. It doesn’t matter how much you trust employees, make certain no one finds it easy to commit embezzlement. In each of the above embezzlement examples, trusted employees were the culprits.

Yes, I know, it’s difficult in small companies because they can only afford a bookkeeper. But it’s possible to take precautions.

Here are the customary, potential problem areas:

• Bookkeeping
• Cash disbursements
• Data processing
• Inventory control
• Purchasing
• Receiving

The two key steps you should follow:

Step one. Anticipate and analyze each area in which problems can arise. Write policies and strictly adhere to them in order to prevent thievery.

Here are the usual embezzlement red flags:

• Abnormal increases in sales returns, which can hide payments for accounts receivable.
• Atypical bad-debt write-offs.
• Abnormal declines or uncommon small increases in cash or credit sales. This might be an indicator of unrecorded sales.
• Bounced checks are often a sign of chicanery.
• Shortages in inventory can mean employee thefts via phony purchases and unrecorded sales.
• Negative surprises in expenses or profit decreases can result in money being tapped illegally.
• Sluggish collections can hide embezzlement.
• Employees who don’t take vacations or time off.
• Employees who live a surprising, extravagant lifestyle.
• Good managers walk the floor twice a day or make unannounced spot visits – be very wary of employees who resent such visits. Count on hidden problems.

Step two. Establish an internal audit system and divide responsibilities. Yes, segregate all accounting duties. At each financial stage – whether incoming or outgoing – scrutinize all procedures.

Here are 21 basic policies:

1. Use a system that prohibits alteration of checks. Make certain checks are countersigned by two responsible employees. (Do not allow signature stamps using the same names as the check signers.) Better yet, pay bills online.
2. Limit the dollar amount on checks. (It’s better if you authorize checks.)
3. Make certain a person – other than a check-signer – prepares payments.
4. Originals or copies of invoices and checks, including voided documents, are filed in numerical order.
5. Prohibit anyone other than the principal – you – to endorse checks for credit.
6. Determine who will receive checks and cash while designating someone else to record incoming funds, and appoint another person to take money to the bank daily.
7. Bank reconciliations are not handled by the same personnel who handle cash receipts and cash disbursements. Preferably, review bank statements online.
8. Regularly, at least once a month, mail statements.
9. Prevent wadding by examining payroll records. Monitor payroll tax records.
10. Conduct unannounced, spot audits.
11. Designate different employees for ordering supplies, receiving them, and for paying them.
12. More than one person should sign petty cash vouchers. Receipts should be numbered and attached, and filed numerically. Audit the cash drawer daily.
13. Set an example by never borrowing from the cash box.
14. Make sure the same employee who makes credit sales or loans does not write off bad debts.
15. Back up records on a daily basis. Do not allow the same person who handles accounting do any backups.
16. If you have a payroll person, ensure the payroll data is accessible to you.
17. To prevent unauthorized raises or other undesired payments to employees, audit payroll records at least once a quarter.
18. Lock up unused checks. Verify all checks and check numbers, including voided checks.
19. Take inventory once or twice per year.
20. Bond any bookkeepers or office managers. A good insurance agent will advise you. Make certain to follow all financial-control guidelines to avoid problems with the bonding company should an embezzlement occur.
21. Have your cash and accounts audited each year by an outside accountant.

Finally, listen to your instincts. Again, be on the lookout for turf-minded employees. If you suspect embezzlement, investigate and run to the police. Don’t hesitate.

From the Coach’s Corner, here related resource links:

Primer for Best Practices in Preparing Financial Statements

Accounting / Finance – Why and How to Determine Your Break-Even Point

6 Values for Financial Protection

Management Strategies for a Successful Turnaround

8 Simple Strategies to Give You Pricing Power

“The average Joe should be just as concerned about embezzlement, even more so, because it’s so easy to do. All you have to do is be trustworthy to do it.”

-Peter Henning

  

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

 

Accounting / Finance – Why and How to Determine Your Break-Even Point

 

Best practices in management mean having the right information to alleviate uncertainty in business. For that you need the right tools. One important tool – know your break-even point (BEP).

A BEP analysis should be an integral part of your financial planning. If it isn’t, you can count on suffering from unnecessary stress – emotionally and financially. You need to be able to make the right decisions because positive cash flow is paramount to facilitate success.

Generally, there are multiple benefits to knowing your BEP, for example:

1. You can track when or if you’ll break even.
2. You’ll be in a better position to evaluate whether your new products or services are good ideas.
3. Whether to expand in other ways.
4. Businesspeople who perform such analysis are often more profitable.
5. In a loan scenario, the bank will want to know your BEP. Plus, you’ll know how much you’ll need to sell to successfully pay off the loan and to make a profit.

Success can be dangerous as it sometimes leads to complacency in financial management. If your business is on a roll – your profits are strong and your cash flow is positive – you’re probably not worried about your financial position.

But one thing is clear in business – you can expect negative surprises. You should be prepared for any contingency. And there are many.

To name a few: You could lose your best talent, your products can reach the end of their life cycles, or you can be hit by an earthquake or hurricane.

Sure, it helps to stay up-to-date on your checking account balance, general ledger, sales receipts and your monthly profit and loss statement. But these are insufficient – if you’re to accurately ascertain how and when to pay the bills and to meet your payroll, especially in this uncertain economy.

Time is a valuable commodity in business. Even in good economic times, most entrepreneurs are too busy putting out fires and reacting to problems.

If you understand where your BEP is, you’ll know instantly whether you can cover your obligations and know how far ahead or behind you are in terms of cash flow. The longer you wait to develop such financial information is to invite disaster. So, it’s best to be proactive.

In essence, the BEP is where your revenue equals the cost of sales plus expenses.

It’s a mistake to determine just your cost of goods or services but failing to consider your fixed costs or operating expenses, which are also called overhead.

A good friend, Neil Delisanti – the esteemed former Small Business Development Center advisor in Washington state, and who taught at the University of Puget Sound and The Evergreen State College – helped thousands of people. He also advocated a break-even analysis.

He provided this basic BEP formula: BEP = Fixed Costs divided by Gross Profit as a Percentage.

For example, if your fixed costs average $2,000 per month and your gross profit is 40 percent, your cost of goods is 60 percent.

How this BEP is determined: $5,000 = $2,000 divided by .4.

This formula indicates you will have to achieve $5,000 in sales to cover your cost of goods and fixed expenses.

If you attain your BEP in each reporting period you’ll be OK. After you achieve the BEP, the balance is yours.

Remember, this proactive tool is helpful to avoid or get out of difficulties while you still have time to do the necessary footwork. So manage the books and be ready for change – any change — especially negative change.

From the Coach’s Corner, here are related resource links:

Primer for Best Practices in Preparing Financial Statements

Step-by-Step Solutions for a Company Turnaround

8 Simple Strategies to Give You Pricing Power

Change is inevitable, except from a vending machine.

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

 

 

Primer for Best Practices in Preparing Financial Statements

 

A good financial system is vital for your business. Not only will a properly prepared financial statement tell you what’s transpired in your business, it will give you a snapshot regarding your future. 

Measurement of cash flow is paramount. 

In the two forms of accounting – cash basis vs. accrual basis – the cash-basis system is much simpler. 

In essence, the salient focus in the cash-basis system is getting money into your bank account. Then, you worry about paying the bills. When you make a sale, you deposit the funds. The date you receive the funds is recorded as the selling date. It doesn’t matter when you made the sale. 

Naturally, you pay your bills when the money is available. FYI, it doesn’t matter when the expense was incurred. In a cash-based system, the expense is recorded when it’s paid. 

Also, in cash-basis accounting, very little focus is given to matching the time period when the money is earned or the duration when they are incurred. 

In contrast, accrual-basis accounting is more complex. It will match your revenue to the actual period of time in which it’s earned; plus, it matches your expenses to the corresponding period of time in which they’re incurred. 

Again, it’s not nearly as simple as a cash-based system because it supplies a lot more data concerning the financials of your company. An accrual system gives you more meaningful information. You’re more able to keep records of the payments from the customers to whom you give credit. And it presents more information on your amounts due to your creditors. 

So, to keep your fiscal house in order, there is a common-sense approach for preparing financial statements. By using data from your ledger accounts, entries can be made on a worksheet. 

For the worksheet, it’s suggested you prioritize your entries in the following order: 

1. Income statement
2. Statement of retained earnings
3. Balance sheet
4. Cash flow statement

Here’s an explanation of each: 

Income Statement. You should include your expenses, revenue, and your net income. That means, of course, you convey your ledger account balances from your expenses, revenue, and your capital gains or losses. 

Statement of Retained Earnings. This report contains information from the start and ending of your retained earnings. 

A statement of retained earnings is derived from the following sources: 

• Using your previous statement of retained earnings, list your beginning retained earnings.
• From the prior income state, show your net income.
• Indicate the dividends paid from this accounting period.

Balance Sheet. Your balance sheet shows the following: Assets, liabilities and equity of shareholders in the company. 

How it’s assembled: 

• Show the remaining amounts of your asset accounts. They include cash on hand and your accounts receivables.
• Indicate your liabilities in what’s aptly named your liability accounts. This will include all accounts payable and notes.
• List your capital stock balance.
• Record your retained earnings – this is taken from the statement of retained earnings. 

Cash Flow Statement. All the data is vital, and my sense is that the cash flow statement is all-important as it reflects your ability to succeed in business. 

It includes the numbers that show why there are fluctuations in your cash on-hand. The cash flow statement will indicate your sources of cash. Further it will indicate how you use cash in all phases of your business – including operations, finances and investments. 

Remember the difference between accrual and cash systems. As a cash-basis report, your cash flow statement can’t be drawn from the ledger account balances of an accrual accounting approach. 

So, you use one of two methods to create a cash flow statement from accrual-system data. 

Your optional methods are: 

1. Direct – subtract your cash disbursements from your cash receipts in this method.
2. Indirect – from your net income, you add or subtract your non-cash entries.

From the Coach’s Corner, here related resource links: 

8 Simple Strategies to Give You Pricing Power 

Step-by-Step Solutions for a Company Turnaround 

Management Strategies for a Successful Turnaround

What No One Tells You about Raising Investment Capital

What Should You Divulge When Asking for Investment Capital?

Eight Strategies to Consider Before Starting A Tech Business

“The fact is that one of the earliest lessons I learned in business was that balance sheets and income statements are fiction, cash flow is reality.”

-Chris Chocola 

 

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

SBA Web Chat: Tips on Healthcare Tax Credits

 

Aug. 4, 2010

If you need up-to-date information on healthcare for your small business, the Small Business Administration is holding a Web Chat. The SBA’s Web Chat will highlight small business health care, with a focus on how the Affordable Care Act will benefit small business owners through available tax-saving incentives.  

Participants can learn about the newest tax credits they can take advantage of, and additional tax provisions to be implemented during the next several years.  

John Tuzynski, chief of Employment Tax and Specialty Programs for the Small Business Self-Employed (SB/SE) Division at the Internal Revenue Service, will host the August web chat on “Healthcare and Small Business.” 

SBA’s Web chat series provides small business owners with an opportunity to discuss relevant business issues online with experts, industry leaders and successful entrepreneurs.  Chat participants will have direct, real-time access to the Web chats via questions they submit online in advance and during the live session, with instant answers. 

WHEN: August 12, 2010, 2010, 1 p.m. ET. Mr. Tuzynski will answer questions for one hour.      

HOW: Participants can join the live Web chat by going online to www.sba.gov, and clicking “Online Business Chat.”  Web chat participants may post questions before the August 12^th chat by visiting http://web.sba.gov/livemeeting/Aug10/ and posting their questions online. 

To review archives of past Web chats, visit online at http://www.sba.gov/tools/monthlywebchat/index.html.

From the Coach’s Corner, however, please note these columns:

Healthcare Reform Increases Costs to Workers, Study

How Healthcare Law Would Affect Small Business

Oxymorons: ‘Healthcare Reform’ and ‘Public Servants’

Look for Significant New Fair-Value Accounting Standards

 

Aug. 4, 2010

As a company shareholder, you will see more transparency as the result of new fair-value accounting standards proposed by the Financial Accounting Standards Board (FASB). But the transparency means substantially more work to prepare financials, according to Daniel Figueredo, manager of San Francisco Bay Area accounting firm, Burr Pilger Mayer.

He was interviewed by Sue Ostrowski at the Smart Business Network.

“The new standards in the exposure draft will help converge the U.S. generally accepted accounting principles (GAAP) with international financial reporting standards (IFRS),” says Mr. Figueredo. “It’s a pretty robust draft with many new disclosure requirements. If it’s issued as is, it will be challenging for businesses.”

Mr. Figueredo says companies will be required to divulge how they arrive at conclusions when presenting fair-value financials based on changed assumptions.

“One of the most significant disclosure requirements that could affect businesses is the need to disclose a sensitivity analysis that attempts to measure the uncertainty in your fair value measurements categorized as level 3, which are the items that require the most management judgment to value,” Mr. Figueredo tells Ms. Ostrowski. “You will have to disclose the range of that price change, thus giving a reader a sense of the degree of possible swings to your balance sheet for other likely fair values that one could have arrived to.”

As an example, he cites banks with mortgage-backed securities.

“These instruments require a fair amount of judgment by management to value, and would likely be categorized as level 3,” he explains. “Factors considered in measuring the value of a mortgage-backed security could include pre-payment assumptions, default rates, loss severities and discount rates, to name a few.”

He says banks will have to establish the most-salient valuation assumptions. Then, they will have to ascertain other sums that were possible to consider in determining a different conjectural fair value.

Another significant change:

“As part of the new provisions, the exposure draft indicates that you should not consider blockage factors for level 2 or 3 fair value measurements,” he explains. “That essentially means that you should not take further discounts to fair value just because you own a large chunk of shares, such as with large investors like Warren Buffet’s Berkshire Hathaway or hedge funds.”

He explains the difference if a company should have to liquidate:

“…that sale will affect the price of the stock (typically downward),” he says. “But you could very easily sell smaller chunks of stock over longer periods of time. Blockage discounts are viewed as transaction costs, and the effects should be recognized when the decision to sell a block is carried out, rather than as period to period fair values.”

The article also explains more on how the changes will affect companies, what types of firms will be impacted and how they can prepare. For more details, here’s the link to the article:

From the Coach’s Corner, if you’re like a lot of companies in a financial turnaround situation, here’s a resource: Step-by-Step Solutions for a Company Turnaround. 

How to Ease Debt-Collection Headaches

 

What are your choices when your accounts receivables reach 60 to 90 days past due? After all, cash flow is a paramount priority.

Certainly, you don’t want to be too aggressive in debt collection and lose possible revenue from slow-paying customers – they might soon be able to pay you. Even a court judgment isn’t a cure-all. Nor do you want to let your receivables cripple you.

Many businesses face this perplexing problem even though numerous economists believe the recession is over. That’s because of the improvement in the nation’s gross domestic product. But this economy is a new ballgame – unlike what we’ve experienced in recent recessions. Consumers don’t have money to spend so they’re not consuming. Consumer spending usually helps end recessions.

My sense is the unemployment rate is closer to 23 percent. Many unemployed workers aren’t counted because their benefits have expired. Many were forced to accept temporary freelance work or have been self-employed, but when the jobs ended they weren’t eligible for benefits.

Following the last downturn, the Small Business Administration reportedly indicated small businesses with less than 20 workers created 40 percent of the jobs. However, we’re not seeing such job creation in the small business sector. Why?

Here are three salient reasons:

1.       Tight credit has traumatized business. Consider Advanta, the nation’s 15th-largest credit card company with about 360,000 small-business customers. It declared bankruptcy in Nov., 2009 – five months after it cut off all credit to its customers.

Advanta CEO Dennis Alter was quoted by CNN as claiming the economy hurt his company (Bankruptcy filing is a blow to small business). That’s partially true, but there is plenty of evidence to the contrary. Advanta and other credit card companies helped create our nation’s financial mess. Advanta has been repeatedly accused of bilking countless customers with predatory interest rates at higher than 30 percent for dubious reasons, and abruptly cutting credit lines without warning to unsuspecting businesses long before the recession was acknowledged by economists. Little wonder about Advanta’s downfall. Its customers couldn’t pay their credit card bills.

Here’s a representative sample of consumer complaints: http://www.consumeraffairs.com/credit_cards/advanta.html.

Why has Congress allowed certain states to permit such behavior? It also ruins the credit ratings of small business owners and prevents them from getting other lines of credit, not to mention the tight-lending practices of many banks even when businesses have stellar credit. But that’s a big-enough problem for a separate Biz Coach column.

2.      Weaker sales and fewer exports. The red ink cycle in the GDP may be over, but the majority of small business owners isn’t feeling relief. We continue to see universal evidence of the downturn in loss-leader sales and empty commercial space. Personally, during a recent visit to a chamber of commerce in what is perceived as a successful community, I was astonished to see vacant storefronts on all four corners of the nearby intersection of a busy street.

 3.      Mounting healthcare costs. Employers are suffering from double-digit percentage increases. And the root causes of escalating healthcare costs haven’t been solved.

Here’s an example: Healthcare Reform Increases Costs to Workers, Study.

So in view of these woes what can you do to improve your receivables? Consider using the Golden Rule and train your staff in empathy techniques.

The majority of slow-paying customers are likely to be downtrodden, but not mean-spirited. If a slow-paying customer has an otherwise good track record with you, the odds are you’ll see your money when conditions improve – if you practice empathy.

Empathy means a breezy, easy-going approach. Treat past-due accounts like you’d want to be treated. Ask friendly, open-ended questions to get your customers to talk with you. Listen to how they hope to repay you.

Admittedly, in my third year in business, I fruitlessly felt anger toward a client who didn’t follow my counsel and his company consequently fell on hard times. As I dragged my bag of resentment around, it grew bigger and bigger. My obsession was a drain on my emotions.

Fortunately, I remembered a passage in an old best-selling paperback book, “Love Is Letting Go of Fear,” in which author Gerald G. Jampolsky, M.D., related his experience with a non-paying client. Dr. Jampolsky, who was angry over the nonpayment, changed his mind and used a new g0-slow approach to the problem. Soon, he unexpectedly received payment.  But that wasn’t his motive for an easy-does-it approach. He did it for his own serenity.

I decided to try his approach. So when the client owed me more than $4,000, I decided to let go of the problem after being unsuccessful after months of soft-collection efforts. To my surprise – a year later – I got a phone call with a promise to pay in full. Yes, the check arrived three days later and it didn’t bounce.

The experience also taught me two other valuable lessons in best-practices:   

• Don’t be so eager in taking on new clients, and be certain to practice due diligence. I politely turn down new businesses as clients and now only help companies that have some challenges but follow my recommendations. (This philosophy caught the interest of a talented columnist at a nationwide publication in Been There… Done That… Here’s How – New York Times). Even if my firm is paid a retainer in advance, startups don’t work for me because most take up an excessive amount of time at the expense of other valued clients. 
• Closely monitor clients’ progress. I held them accountable if they ignored my suggested best-management practices. 

FYI, five years after my $4,000 surprise, I got an opportunity to see if I indeed learned my empathy lesson:

As I was turning into a parking lot to meet buddies for our weekly sailboat race, a young waitress with a small child rear-ended my late-model vehicle. The damage was slight – about $100. The driver begged me not to report it and promised to reimburse me. I agreed.

Soon, I realized the joke was on me – she was not in a position to pay – so I decided to let go of it. My loyal accountant was chagrined with me.

But just an hour after deciding to let go of the matter, I unexpectedly met a person who formerly worked for one of my clients. He mentioned how my work benefited his ex-boss, and asked me to approach his new employer to offer my services.  A week later, I had a new client, who became my biggest. Not to be gauche, but it was six figures a year in revenue for nearly five consecutive years.

Meantime, my accountant had to remind me to stop chortling over our little disagreement.

However, this doesn’t mean you should ignore collection problems. But don’t approach each customer with a sledge hammer. See the situations as opportunities for growth and more options for due diligence.

In conclusion, think long-term. As much as possible, treat your customers as partners and use the Golden Rule – treat others as you would like to be treated if you were in a similar plight. What goes around comes around.

Besides, if you use due-diligence with customers early on and use best-practices in management, you’ll be OK. The odds are the majority of your delinquent customers will remember your empathy and will remain loyal after their situations improve.

From the Coach’s Corner, for more on Dr. Jampolksky’s organization, visit: www.corstone.org.