Finance:  fɪˈnæns finances, the monetary resources, as of a government, company, organization, or individual; revenue.

Budget: ˈbʌdʒ ɪt noun, a plan of operations based on such an estimate.

This is part one of two:

Go ahead and debate. Let me know your thoughts on whether companies could control their finances better in cases like these. Is it the company or the employee who is at fault here? Do you think companies could be standing on more solid ground if they made simple changes to have a big impact?

Let’s start this one with a random example. Let’s say you have two children and you hire a babysitter or nanny. Part of the agreement when you hired them was they were responsible for taking your children to the park and to their swimming lessons. You tell them to feel free to take the kids out for lunch on those days and you’ll reimburse them. If you’re like me, you’ll likely assume they’ll make a McDonald’s run and you’ll owe them $15-20. (I don’t have any idea how much McD’s costs these days. I haven’t been to one in years). What you find instead is that this person, in one week, has taken your children to three different sit-down restaurants at $45-60 each.

Here are my questions about this scenario:

1. How long would you keep this person working for you?
2. Who is to blame in this situation?
3. What would you do if you couldn’t afford to pay that?

Some may argue that it’s your fault for not providing a budget or specifying which restaurants would be appropriate. Others may say it’s the caretakers responsibility to use their best judgment and make decisions that are appropriate for the children. After all, if they are trustworthy enough to watch after your children, they should be responsible enough to make rational decisions, right?

Now, let’s look at this similar situation involving companies. (I work for a printing/shipping company and I can’t begin to tell you how many times I have seen this exact type of transaction): A customer comes in with computer equipment (laptop, monitor, keyboard, cell phone, etc) that they need us to pack and ship out. The company they worked for gave them an account number to use which means both the packing and the shipping are paid (the customer dropping the stuff off doesn’t have to pay anything). As an employee of my company, we have packing standards that must be met, but we have no standing to say no if they ask for extra and we can’t tell them how much they’re allowed to spend on shipping (a couple days vs. overnight).

Most of the time, the customers coming in to return the equipment are doing so because they either just got fired of laid off (the latter then most common). Both circumstances make for extremely angry people. So, do you want to guess what they do?

That’s right! Instead of choosing an economical option that will get their equipment back in 3-5 days for tens of dollars, they choose an overnight option that will cost their ex-employer hundreds. Now, what that company could do, is send the ex-employee a pre-paid label, but it’s rare that we see that. Instead, they leave the shipping decision up to a newly disgruntled ex-employee which, no doubt, costs them thousands of dollars every year. In the case of an employee being laid off, the usual circumstance is most likely because the company is restructuring due to financial changes/challenges.

Here are my questions in this scenario:

1. As a newly laid-off ex-employee, is it a proper response to try to “stick it to the company” you feel did you wrong?
2. Should the ex-employee focus on trying to protect former co-workers from having the same thing happen to them by not spending an exorbitant amount on shipping costs?
3. Whose responsibility is it to safeguard this transaction to make it financially reasonable?
4. Does the company deserve it for not having those financial parameters in place?

As I mentioned previously, my company also does printing. Some companies have a printing account with us (which gives them discounts) and some don’t. Regardless of which category they fall into, we see scenarios like this every day. A customer comes in and they have a presentation they have to give and need some flyers and packets printed. We go through all the options, ask if they have an account, and give them a total. These totals can range from $60-$4600 (give or take depending on the project). More often than not, the response when we tell the customer their total is “That’s fine. I get reimbursed for it” and they put it on their credit card without a second thought.

These same companies that allow employees to make decisions like this are, at times, the same companies who can’t afford to give raises on any given year or who have to restructure and lay people off. The company doesn’t take the time to create an account to save money on printing costs, the employee doesn’t look for different options to print their orders for less money. (Don’t get me wrong, I’ll take the money all day…I want my company to be successful).

Here are my questions:

1. Should the employee be more thoughtful in how much money they’re spending? Should they pretend they are spending their own money instead of someone else’s?
2. Should the company set spending limits per employee or require them to get approval before placing an order?
3. Is the company solely responsible for not taking the time to actively save money in this category so they can either make more money or put it into other areas, like payroll, who may need it more?

Part two will be available next week. Come back for my open ended debate about companies forcing employees to take their business elsewhere.