To make employees aware of cash flow, one company has every employee track numbers.
Number crunching is part of every employee's job at Atkinson-Baker & Associates, a $5.2-million court-reporting service based in Burbank, Calif. "You can never know too much about your company's financial performance and results," says CEO Alan Atkinson-Baker. "If you wait for the end of the month to try to pull together meaningful financial statistics, you lose the ability to respond to events as they happen."
One consequence of all that math: the company has managed to steer clear of cash crises.
Each of the 50 employees is responsible for daily tracking of one statistic relating to his or her job. An accounts-receivable clerk might record how much was successfully collected during the day; a salesperson might note the number of orders logged. Since the statistics are tied to specific jobs, it doesn't take long to teach staffers how to compile results, Atkinson-Baker reports. (In many small companies, the hard part may be convincing employees that their data collection matters to the company's performance.)
At the end of each day, statistics are reported to the managers who supervise the company's seven divisions. The managers meet for about 45 minutes the following morning to analyze results with Atkinson-Baker and other top executives.
A cardinal rule at Atkinson-Baker is, Don't spend more today than the company brought in yesterday. "You can never run into financial trouble as long as you stick to that rule," says the CEO. "We are locked into that as far as every expenditure we make."
Each day's results are collated with a software program, and Atkinson-Baker receives weekly updates in the form of 27 graphs. "We analyze these trends in a weekly budget-and-planning meeting," he says, noting that effective planning would be impossible without such detailed data.