What are your “codes of conduct?” You know, those reference points that we use to guide us through life’s tough decisions. I thought that in this post I’d share several of mine. It’s not that I have any sort of superior knowledge, it’s just that every now and then it’s good practice to reflect on the lessons that life has taught us so far.

1. The best health insurance you could ever have is: good health. Do your best to cultivate it, develop it and maintain it.

2. When one of the big bosses at work unexpectedly starts being really friendly towards you, (and this is unusual), watch your back.

3. Pointedly praising something unusual a person owns or has done will make you appear far smarter in his eyes than a 10-minute discourse on world events.

4. When two people in the office are feuding with each other be careful not to choose sides.  Try to maintain an amicable, professional relationship with both while not antagonizing the other.  You never know how things will work out in the long run.

5. Be aware that most people are operating on a very condensed version of the 10 Commandments: the parts that work for them…at the moment. (Plagarized from Men’s Health and paraphrased by me).

6. It’s okay to be unique but in most cases only among those who love (and accept you).  At work, you’ll likely be viewed with suspicion so tread lightly.

7. World travel is among the best education that anyone can receive.  And it’s fun.

8. When you win a disagreement at work, don’t rub it in. Allow the other person an opportunity to “lose” gracefully.  It will make for a much more harmonious working relationship and your point will have been made.

9. Never hesitate to admit when you’ve made a mistake, even to the office “know-it-all” who will likely try to rub your nose in it. Intelligent people respect an individual who has the courage to admit the error of their ways

10. An ounce of appearance is worth a pound of substance. (Plagarized completely from

11. Before you hit send on any email take second look at your message and then a second or third glance at the email address(es). Is this really what you want to say and do you really want to send it to the listed recipient(s)?

12. Life may not be fair, but it sure beats the alternative.

13. Enjoy every day as if it’s your last because eventually it will be.

14. Avoid always saying, “One day I’m going to…” and just do it already.  It doesn’t have to be anything major. Maybe just visiting that museum that’s always been on your “to do” list.  Life is short. Make things happen.

15. Don’t spend your hard earned money on stuff you don’t need and won’t use.  Don’t hang on to (hoard) junk that you haven’t even touched in the past year. Unless is a valuable antique or something that is accruing value, get rid of it.

16. Over prepare and then let the chips fall where they may.

17. If you make your friends laugh, even if they’re laughing at you, you’ve done a good deed for the day.

18.  Never say, “He/She makes me do (insert unacceptable behavior).”  No one is responsible for your poor decisions except you.

19. Always put your best foot forward and try to make your best impression.  You’d be amazed at the high opinions some people have of you that they rarely vocalize.

20. Unless the service is really crummy, always leave a generous tip.  This is a lesson I had to learn the hard way.

21. Life is a marathon, not a sprint.

22. No matter the age, never underestimate the willingness of adults to engage in petty, childish behavior.

Feel free to share some of your “rules to live by.” I’d love to hear them.

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The Demise of The American Worker?

No doubt in your organization many of you struggle with striking the right balance with regards to your use of technology.  We hear almost daily about how technology and automation are driving the workforce of this nation into a state of perpetual  joblessness.

I remember watching one of the great shows of all time, “The Wire”, and there was a scene during the second season where Port boss Frank Sobotka was shown a movie reel of the future of the dock workers.  It featured robots doing the job that men held at that time.  He referred to it as an “effing Horror show”.  That scene, among others in the series, always stayed with me.  I mean who among us doesn’t have some deeply imbedded fear of losing their job to automation?

Thinking about this topic brought to mind the story of John Henry.  For those of you who haven’t heard it, John Henry is both an American folk hero and a bit of a tall tale. He worked as a "steel-driver"—a man who hammers a steel drill into rock to make holes for explosives to blast the rock away. He died during the construction of a tunnel for a railroad. In the legend, John Henry's prowess as a steel-driver was put to the test in a race against a steam powered hammer.  I think he won the contest but died in the process, if memory serves correctly.  I love the fact that he won but I think we’d all agree that the price he paid was a bit steep.

Back in the 1800’s America was loaded with “John Henry” types.  They were known as farmers.  Back then over 90% of the U.S. population were farmers.  By 1900 that number had dropped to about 40% – 50% and today the figure hovers around 2%.  What caused this? Advances in automation of course.  Oxen, horses and crude wooden plows were eventually replaced by steam engines and tractors. As our industrialized society has developed,  more and more production has occurred with fewer and fewer people involved.

One huge difference today is the speed with which change takes place.  There is a growing dis-connect between the speed of technological change and our ability as a society to keep up with it.  I know each of you has felt it as well.  Think of how profoundly the personal computer and all its’ off-shoots (internet, smart phone, texting, emailing, etc.) have changed our world in just the last 20 to 25 years.

Fear of technology encroachment is one thing but what about robots?  The specter of robots is frightening indeed but in today’s workplace, there are still tasks that robots simply cannot do.  Bruce Welty, chief executive officer says, “It’s very difficult to get a robot to make the decisions required that a human makes to pick something out of a bin—particularly if there are many different things in that bin.”  Robots are better suited for handling the simple and repetitive tasks while humans excel at handling the more complex and dynamic ones.

Another business executive, Rodney Brooks, founder and chairman of robot maker Rethink Robots believes that these machines will help but not replace workers. As an example he points out that personal computers did not make office workers extinct, they just changed the work that they performed.  He adds, “People are so much better at certain things.”

In my work experience automation has mostly been used after a series a layoffs when the rest of us have to “do more with less”.  Most of our gains have been made by using technology to perform tasks that are repetitive and low level in terms of risk.

Even though robots are superior to their human counterparts in many ways, even the most technologically advanced machines have their limitations.  As they render some jobs obsolete, they bring new opportunities to the fore.  To win in this battle, workers, businesses and even cities must be prepared well in advance.

What do you think?  Advancements in technology are inevitable.  All we can hope to do is to learn how to co-exist successfully.  Are we doing a good job of it? What do you think the future holds for us in this regard?

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Affinity Marketing and the new Hiring Practices

You know how when you’re on the internet browsing for shoes, auto accessories or perhaps music and then you go to another site and all of a sudden, ads start popping up for the very items you were just browsing for? Well, that is known as affinity marketing.  Some sites such as Amazon will do it within the confines of their own website.  Some supermarkets use a similar system where they will reward their customers with discounts on items that they purchase regularly.

Well now there seems to be a growing trend in certain circles that this same sort of affiliate technique regarding their hiring practices.  In an effort to determine a proper “cultural fit” employers are considering whether potential employees share passions such as rock climbing, playing the guitar or watching old movies.

In the December 2012 issue of the American Sociological Review, Northwestern University Professor Lauren Rivera discusses the fact that companies are no longer simply hiring the most skilled workers; but are making decisions, Ïn a manner more closely resembling the choice of friends or romantic partners.”

Imagine for a moment that you're on a job interview and you're asked questions such as:

* "Who is your favorite movie actor?"

* "Where do you vacation in the summer?"

* "What is your favorite website?"

* "What makes you feel uncomfortable?"

     Would you begin to look a bit sideways at the person interviewing you? I agree that making a bad hire is a disaster but do these sort of questions bring you any closer to averting such a situation? I wonder.  I'd probably wonder what the real motive of these questions was.

Professionals in the human resources field are echoing these thoughts saying that such an approach can create a more cooperative, creative atmosphere, while making workdays more tolerable and heading off conflicts before they begin.

There is a great story in an article that I read recently that statest that online retailer, Zappos is actually paying employees $4,000 to quit if things aren't working out after the first week of employment.  Now that is quite a statement regarding cultural 'fit'.

While I concur with idea of considering similarities in leisure pursuits among co-workers there is no way you can convince me that this will really aid in making the workplace any more harmonious or productive. ?  Just as not all romantic partners click just because they both love art museums or French wines, not all employees will click just because they are passionate about the same things.

I think that Eric Peterson, manager of diversity and inclusion at the Society for Human Resources and Management makes the most pertinent point when he asks, "You just hae to decide if you're hiring for the culture you have or the culture you want."

 What do you think?  If you shared similar interests with the majority of your co-workers would it make your workday any more pleasant or productive?

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Credit Reporting Errors And What You Can Do About Them

Did you catch that story on 60 minutes last week documenting the frequency with which credit reporting errors occur?  If you didn’t, you really missed an eye-opening report.  Here’s a synopsis that details the report nicely.

How much do you think it would cost you if your credit report was wrong?  It could cost you a lot more financially than you can imagine. You could wind up paying more for your home, your car, almost anything that you finance. It could even prevent you from getting a job. Landlords and employers often use credit reports to determine whether to hire or rent to someone.  Don’t forget folks with better credit ratings receive favorable interest rates on their mortgages.

The FTC discovered that as many as 26% of consumer credit reports contain an error. When you consider the large number of sources of information that go into creating these reports, it seems logical  there would be quite a number of errors.  Errors from banks or credit card companies, lenders they send the information to or mistakes at the credit reporting agencies themselves.  In addition, let us not forget that there is always the specter of identity theft.

Once an error is uncovered, how easy is it to get it corrected? In the FTC study, out of1001 participants  26% identified errors and 21% were able to have them corrected by the credit report agencies.

The big take away is to visit at least once a year. Another tactic is to contact the companies or individual(s) who furnished the disputed credit information and get them to correct the error.  The law requires them to then go to each credit reporting agency and correct it.

There are three credit report agencies: Experian, Trans Union and Equifax. You are allowed to receive one report each year for free from each of them.  A smart strategy to use is to get one report every four months.  Because things can change over the course of a year and you would not be able to get another one for FREE for another 12 months.  You could get one in February, another in June and a final one in October.  This will allow you to catch an error earlier and get it corrected.

This whole report came about after Congress amended the Fair Credit Report Act in 2003 and asked the FTC as part of the amendment to the law to conduct a study to check the entire system from the consumer, to the disputing of any error(s), to the final resolution and its’ impact on the consumer.


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The Importance of Management

With all of the recent attention being given to both Lance Armstrong and major league baseball players that were denied entrance to the Hall of Fame, I thought it time to take a look at the role that management played in these two embarrassing stories.

What do I mean by the role of management? Well let’s consider Lance Armstrong.  Just on the face of it, I was pretty certain that this man was guilty. Why? I never understood how a man who claimed to be drug-free could dominate in a sport that is rife with drug-enhanced athletes. Now of course, eventually the appropriate governing bodies banned Armstong, stripped him of his Tour de France medals and Olympic medals. Personally, I’ve got to ask, “What took so long?”

I realize that so many people were in love with the story: cancer survivor, Livestrong foundation, wonderful family man.  Why are so many people suckers for a corny story? They just seem to want to believe so badly.

The lasting legacy of this story is that future viewers will simply assume that whoever wins(or participates in) the Tour de France is doping. How could this not be the case?

Major league baseball went through a similar case of misguided hero worship. Back in 1994 the sport endured a bitter strike between players and owners.  Once the strike ended, baseball discovered that the fans were fed up and slow to return to the ballparks.

During the 1998 baseball season the baseball world was captivated by the epic season long home run display put on primarily by Sammy Sosa and Mark McGwire.   Baseballs were flying out of the ballparks in unprecedented numbers.  The custodians of baseball had to know that something unusual was going on but chose to look the other way since fans were returning the parks in droves. I understand their motivation but now look at the state of the sport.  Many of the same players that set records during that time have been basically “blacklisted” from entering the sacred halls of Cooperstown.

What does this have to do with business management? Whether you are a manager within a business organization or a senior executive of a sports organization it is imperative that you make decisions not just for the here and now but that you execute your duties with an eye to the overall health of the organization.

The short-sightedness of sports executives may have been lucrative in the beginning but now millions of fans have serious questions regarding the very credibility of the organization(and industries) they were bound to protect.

Too often, once you cast your lot with the devil, you become obligated to ride it out until the bitter end.


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A cash applications specialist records client payments in appropriate accounts, identifies and resolves payment discrepancies and answers client inquiries as needed. The specialist also resolves customer complaints, issues receipts, and refunds and computes bills using calculators or cash registers.

Historically the process of applying a cash receipt to an open invoice was manual, and time-consuming. Sadly, even today in many companies it still is. Credit departments are often hampered by these lag times between payment receipt and cash application. In addition, this can result in misapplied payments, drawn-out processing and increased costs.

The ability to quickly and accurately apply incoming payments to customers’ invoices is a vital process within the order to cash system.  When cash gets mis-applied, the collection call takes on an entirely different tenor.  Collectors end up calling for payment on invoices that have already been paid.  Customers provide check detail instructing where they wanted their payment to go.  Therefore collectors usually inquire about the status of the invoice(s) where the money was applied, figuring that the customer has not paid that invoice.  A likely assumption.  The real fun begins when the collector discovers that the second inquiry results in the same response from a customer.  At that point the collector can continue to chase her tail or write off the original invoice(s) and go have a talk with the cash app specialist.

These days no company can afford to write off any money that is legitimately owed.  On the other hand, with organizations stretched so thin with regard to manpower, who can afford to unravel the cash application error in order to determine where the money should have gone and what your customer actually owes?

Why on earth would anyone mis-apply a payment? Well most of the time it doesn’t happen due to outright neglect.  But here are some likely culprits when your cash management systems starts to leak oil.

1)System neglect. The credit and collections process is a back-office function and many times what doesn’t get regular attention begins to atrophy and become obsolete. Keep an eye on your internal systems, create benchmarks and measure to make sure they are still being met.

2)Customer short pays(deduction resolution). Credit memos, customer satisfaction resolutions, refunds, special pricing, etc.  A customer receives a shipment with missing items, a sales rep offers a client discount pricing to entice a sale but fails to inform the finance department.

3)Banking / Lockbox errors. In some cases, when payments aren’t clear cut they can wind up getting applied to the wrong account by the Lockbox provider or internal cash app team.  In other instances, payments cannot be applied using your automated matching routine, which leaves your cash lost until a resolution can be found.

A suggestion that has worked well in the past for me was to get written agreement from my customer BEFORE putting through any internal cash adjustments. Rest assured, in the future someone will question the adjustment and you will be much better off if you can provide proof that someone authorized (and agreed to) the decision.

An integrated, modernized approach to cash application can help expedite the cash processing and settlement of payments. Is your organization overlooking the importance of modernizing the cash application system? Is your cash system as efficient as it should be? If not, you could be bleeding cash and as we all know, cash is king.

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The Relationship between A/R and Credit/Collections

There are times when I’ve seen job listings for accounts receivable personnel versus credit / collections personnel. I thought I’d take a moment to discuss how the two functions work within the accounting cycle.


When a business decides to extend open credit to prospective businesses, the credit professional performs a check to determine the credit worthiness of the customer.  This process may include checking bank and trade references, running business credit reports or perhaps securing a deposit in advance.

Once the product is shipped or the service is performed a debt has been incurred, meaning money is owed to your company by one of its’ clients or customers.  At that point the transaction is entered into the books as a receivable and an invoice is generated in order to bill the customer (A/R).  The customer must then pay the invoice within the terms established by the credit manager.

There are times when the customer has a dispute with the invoice. The dispute could involve a defective product; a service not rendered or tax being charged when it shouldn’t have been. When the dispute is legitimate the accounts receivable department will generate a credit memo or simply write off a portion of the invoice.

When your customer pays an invoice sometimes they pay more than the amount invoiced (overpayment) or too little (short paid). In these cases the credit / collections rep will direct someone in the accounts receivable department where and how to apply the money.

You might say, credit decides whether or not the transaction should happen and accounts receivable is the recording of the transaction through its’ accounting cycle.

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You and your staff have had enough. You can take it no longer. That antiquated system your company has been hanging onto since the 1980’s has got to go!  The problem is how should the new system function? How can you and your staff ensure that you get the best bang for the buck with your new system?

Here are several key items to consider when searching / testing around for a new credit and collections application package:


I understand that every business is a bit different in both practice and structure. As such, each software application may contain features that seem like a godsend to one firm but a major roadblock to another.

With that in mind, let’s take a look at some key customer information that most operations should find useful:

Does the system allow each customer account have pertinent info entered?

I’m talking about purchase order numbers, sales order numbers, invoice numbers, customer contact information, customer service background notes (if pertinent), /Bill-to codes, ship-to codes with proper parent-child relationships, etc.

Contact names (assuming they have been spelled correctly) can you search on them? You know how sometimes you receive a call, the caller leaves a message with their name, it sounds familiar but you just can’t remember the company?

How completely does the system capture customer information? By complete I mean that you should be able to bring up your customer master information from any number of bits of information: Fax numbers, phone numbers, company names, street addresses, etc. Do you have the ability to search on each of these fields?


When displaying open invoices is there a column that lists the original invoice amount as well as the remaining balance?

Is there a way to identify which customers and/or which invoices have scheduled promises to pay? If a promise is broken, is there a tickler function for follow-up?

Can you easily locate your customer’s billing and payment history?

Are you able to identify the proper contact for accounts payable, purchasing issues, and tax issues?

Are you able to efficiently access all of the pertinent information so you can reference it easily while on a phone call?

Is there a user-friendly tickler or calendar system so that accounts arrive in your queue for timely follow up?  Are you able to manually change the follow-up date if necessary?


This one is huge and very, very few systems do an efficient job at handling it. Part of this problem is due to the limitations of the software and the other issue is each company’s internal process for handling payments.  Can you easily determine cash application details?  Remember, we’re talking check, wire transfer, EDI, credit card, whatever.  If you were on the phone with your customer could you walk them though where their dollars went?


If necessary, can you: Search on a contact’s first and / or last name? Search on the company name? Search on any entered phone/fax number?

Does your firm empower each credit department member collector / credit staff to update customer account info: billing address, phone number, contact info, etc.  This makes each employee feel better about their job and also makes them responsible for the integrity of the data within the credit and collections module.

And last, but not least will this system work relatively seamlessly with your other applications?  Most company’s are using software like Crystal Reports, Cognos, collection software, Dun and Bradstreet, just to name a few.  It helps if they all place nicely together.

Can you think of some other major items that must be considered when purchasing or creating a credit and collections system?

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Every weekday I commute 1 hour both to and from work. I swear it’s practically like taking your life in your own hands. I don’t know if folks are in a hurry to get to work or if they are trying to commit suicide to avoid having to ever go again. I see it all every day: lane splitting motorcycles, speeding cars, tailgaters, and aggressive lane changers. In short, just a rash of really poor decisions.

The scary part is that these are the same individuals that manage financial accounts, launch marketing campaigns, conduct meetings, even hire and fire other workers.  Now, I understand that people behave differently behind the steering wheel of a car but I can’t help but believe that there is more than a little “bleed over” into the decision-making process at the office. 

When we are at work, we operate in a more calm, controlled environment. We can plan and carry out a methodical series of actions in order to reach a desired result. These days decision-making software is used for more and more within the office.  This can be pretty useful since there is no risk of the software getting angry or emotional when attempting to arrive at a decision.

The ability to make sound, timely and useful decisions is key to your success in the workplace. Especially if you are in a position of leadership. I don’t have to tell you what sort of impact a poor decision maker has on their department. You must have a systematic approach in place so that no matter what decision you make, you can at least remain confident in how you arrived at it.

When making decisions at work:

Do you evaluate the myriad of risks associated with each option in front of you before making up your  mind?

After arriving at your decision, how much confidence do you have in it?

How often do you involve other trusted co-workers in the decision making process?           

Do you have a reliable cost-benefit analysis system in place to aid you in reaching a decision?

Have you ever made a poor decision and been floored by the consequences?

Do you think that the multitudes of crazy drivers you see on the road are suddenly sane and rational decision makers at the office?

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The customer is always right, right? Wrong. But they are vital to the survival of your business.  If a customer believes that they are correct, guess what? They are.  Perception becomes reality. There’s an old saying, “All money ain’t good money.”  It logically follows that, “All business ain’t good business.” Sometimes doing business with certain customers just isn’t worth the trouble.

There exists a well known saying that attracting a new customer costs 5 times as much as keeping an existing one.  If this is true, each customer is a very valuable asset. As a business owner you must decide if it is worthwhile to win the battle while losing the war.  To be successful in business you need to sell as many customers as possible: the one’s who are wrong as well as the one’s who are right. 

Customers that try to cheat you. Yes, it happens. Sometimes it’s not intentional, simply a matter of perception.  You hold one position and your customer maintains another. This happens all the time in business. When it happens once in a while it’s no big deal. When it’s a regular occurrence, you may be dealing with a pattern of behavior rather than the exceptional issues.

Customers that set unrealistic expectations. I have a friend that does handyman work periodically. He tells me story after story about how a few of his customers expect miracles and rock-bottom prices. Businesses are no different. Sometimes you just can’t meet the quality requirements or a customer’s timetable. Even when you know this beforehand your profit instinct will be to take the money and deal with the logistics later. Resist this temptation! The pain of a job done poorly will cost much more than the lost revenue of just turning down the opportunity in the first place. 

Customers that consistently want to argue with you. Pricing disputes. Delivery deadlines missed. Product and / or service disagreements. Some customers will battle you on every front. The truth is that the overwhelming majority of these issues should be dealt with in advance, not AFTER completion of the sale.  Do you deal with this sort of customer? Consider whether it is worthwhile for your sanity to continue dealing with these folks.

Providing additional services and the support costs that come along with them. I used to work for a company that provided high tech equipment to customers in the defense, R & D, government, education, transportation and energy industries among others. We always included manuals and accessories usually at cost when the order shipped out. I can’t begin to tell you the number of times that customers insisted that they either did not receive a given accessory or that they DID return it along with the equipment. These disputes sometimes involved thousands of dollars and if you don’t write off the charge you run the risk of displeasing the customer. Think twice before considering what ongoing support you are willing to provide.  

Customers that you have to “chase” in order to receive payment.  Wouldn’t it be nice if you could just mail, email, fax or FTP your invoice and they got paid per your net terms? Of course it would.  The reality is a bit different.  Lost invoices, customers that insist they cannot pay you until their customers pay them, purchase orders that are out of funding, etc. If your company does not have the manpower (or time) to pursue the collection of an account for 30 to 60 days past the invoice due date, the business itself might not be worth pursuing.

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