In 1997, we were rolling, rolling on the river. That was until the accountants came in to do an audit and found out that our financial guy had, how should I put this....... hmmmm..... Mis-classified an entry that would change the company forever!! You see, he posted some crazy entry to the balance sheet asan asset and the accountants were saying it was an operating expense and , well that's when the shit hit the fan!! You see it wasn't some small entry it was a million dollar entry, that they said has to be re-classed as an expense?????
I was absolutely speachless. I tried to justify the mistake, I tried to analyze the mistake, I tried to figure out where in the books, could such a disparaging amount be and no one knew? It was absolutely life changing. Now the month before, we thought we were rolling and my owner gave me a generous $50k bonus. I went up to him and asked him, did he think it would be a good time to buy another house, in a nicer neighborhood or town? He was telling me oh go ahead this is rolling everything is fine!! So what do I do? I sell my house, move into an apartment and start looking for a great house, south of Boston! Well we find the perfect house, we find the perfect street!! We were so happy and we put the money down we had saved, including the bonus and were told it would be ready by Memorial day!! Wow, what great news, move into a big New Colonial 4 bedroom, 2 1/2 bath with 4 acres on a cul-de-sac, and become the new Nelson Family!! How great!!
But NO, the accountants came in all stone faced and said, there has been a dire bookkeeping error and instead of making $500,000 last year , you lost $1.2 million dollars!!! This was in February! I had already bought the house, I was let's just say, I had a mild breakdown. I kept thinking??? Hoe did we lose all this money with the sales and gross margin we had??
Well this went on for 2 months, the accountants covering their butts, brought in some South African guy, who I could barely understand to do an analysis. But everynight, he would quite nicely ask me if I wanted a ride to the boat or the train? Whichever way I was commuting, I would accept and on those rides, there would be some very off color questions!! BING, this kind of raised a RED flag!!
Meanwhile, I am running all over the place trying to fix everything I could, while my owner had the bankruptcy attorney's in his office daily, foaming at the mouth.
You see, he had an UNSECURED loan from a bank in town worth $3.1 million dollars, and he overdrew it by $200,000 on purpose, and you know what!!! They let him!!. So now we are in serious crap. The bank is sweating, I am having panic attacks, nightly!! And the accountants are just trying to cover their rearends!! That's when I got my real inoculation into business, because it is all about who did what and liability!!! That is it!!! Wow, what an education, but we were just getting started. This would get significantly more complicated by the week. I was shocked but not crippled, I was trying to figure it all out, and stuff just wasn't adding up. Had to get back to my project roots to really crack the code. But the code was very complicated. My journey has just begun............... Stick with me people!! All true. All true.. Joe