Worked at a place where upper management was suspicious that Sales was exaggerating its figures, so the CFO did an audit and then made a chart comparing sales revenues to corresponding profits. Nobody expected profits to be nearly as large as revenue, but the CFO found negative profits (losses). That was because sales commissions were paid based upon contract revenue (not profits) and salesmen were bidding jobs below cost in order to win contracts.
The VP of Sales tried to argue that there were more profits in those contracts than the CFO’s audit, but “you just can’t see it”. Upper management debated about recalculating commissions based upon profits, but dropped that idea when the salesmen all threatened to quit. So the company kept its invisible profits…
Yeah, that company was bankrupt a few years later.
bdpoltergeist Premium Member about 1 month ago
talk about going down in flames
bluecat about 1 month ago
If “it’t really hanging in there” is what you want your audience to get out of it, then you should have chosen a different chart design.
Last minute change of heart?
j.l.farmer about 1 month ago
It reminds me of the Twin Towers after the planes flew into them.
ferddo about 1 month ago
Worked at a place where upper management was suspicious that Sales was exaggerating its figures, so the CFO did an audit and then made a chart comparing sales revenues to corresponding profits. Nobody expected profits to be nearly as large as revenue, but the CFO found negative profits (losses). That was because sales commissions were paid based upon contract revenue (not profits) and salesmen were bidding jobs below cost in order to win contracts.
The VP of Sales tried to argue that there were more profits in those contracts than the CFO’s audit, but “you just can’t see it”. Upper management debated about recalculating commissions based upon profits, but dropped that idea when the salesmen all threatened to quit. So the company kept its invisible profits…
Yeah, that company was bankrupt a few years later.