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Tag: Let’s think about this

Memo to CFOs: Layoffs, Frozen Salaries Don’t Always Save the Most Money

Layoffs, pay freezes, pay cuts. Pretty simple cost cutting solutions for CFOs who’ve got tight budgets. Unfortunately, the slash and burn tactics for personnel may have been better applied in another area – inventory.

A recent survey performed by Greenwich Associates of midsized and small company “financial decision-makers” found that, in particular, midsized companies ($10 million to $500 million in revenue) that reduced their inventory, on average, saved 30% more ($520k inventory vs. $400 layoffs).

While that’s great news, the unfortunate part is that only 17% of the companies survey bothered with that particular cost saving strategy while 47% of those survey used “staffing reductions.”


The survey also found that while 37% of used pay freezes to reduced costs with an averaged savings of $245,000. Crunching the numbers, that’s nearly 53% less savings than the inventory reduction savings.

Of course, not all companies have inventory in the dusty-stacks-of-pallets-in-a-warehouse sense. This is especially true of the professional services/financial services area where, unfortunately, the staff are sometimes considered to be inventory.

Lesson from the Downturn: Cut Inventory, Not People [CFO]

Great Big Drawbacks to Getting Your PhD in Accounting

The post the other day on getting an accounting PhD was so inspirational that I devoted several whole seconds to the idea…

Not for me.

Sure, being a professer has its attractions, especially at the end of filing season. Easy hours, nice gym facilities, trampy co-eds — how I miss the world of higher education. And yet I’m not sold.


Right now I have a good job. There’s also a family I want to maintain (sorry, trampy co-eds) and kids to get through school. To get a PhD would require me to walk away from my decently-paid position in this “most profitable small business.” But I must pay attention to the benefits, too, as Caleb related:

“Professors are constantly learning” – To become a PhD would require an odyssey beginning in a university town somewhere, taking boring courses in statistics to prepare me to write some enormous research project that nobody outside of my doctoral committee (poor bastards) would ever read. Sure, all of the practical tax stuff I’ve learned in 25 years of practice would become stale from disuse, but I’d be constantly learning to develop visionary statistical correlations.

“Professors want to make a difference in the world” – Yes, the difference between what I’d be making in my compensation as a graduate assistant for five years and what I make now would be a difference in the world – even a world of difference.

“Life as a professor is full of flexibility” – Yes, especially until you get on a tenure track. You have the flexibility of moving from a one-year fill-in position at Eastern West Dakota State to a similar position at the Utah School of Mines and Home Economics. But no “substantial financial risk,” at least once you’ve thrown away your perfectly good private sector job. No money, no worries.

I’m convinced the whole PhD system is just the same racket as the new IRS preparer regulations – a way for insiders to erect barriers to entry to enable them to raise their prices and milk their customers. But it does protect those poor students from being instructed by anybody with actual fresh knowledge of what a CPA firm looks like from the inside, so thank goodness for that.