Tuesday, July 5, 2011

Thirty Years of Jobbers – Chapter 3-6

Relational technology is here to stay. Advanced analysis tools like Executive Information Systems (EIS) and Decision Support Tools (DST) are available now and they all require relational databases to function.  Jobbers and C-Store operators, whose information resides in a properly designed, relational database, already have a strategic advantage over their competitors. Nowadays, if someone asks me, “How much Texaco oil did we sell last month,” I can come up with the answer in seconds.

If you revisit the previous paragraphs, I hope you can see the necessity for maintaining a strict program of analysis on your Accounts Receivables. I can’t think of a single case where great losses could have been avoided if jobbers had done so.

Our “Ruben Report” is just one small example of how our clients run a tighter ship without a great deal of trouble. People make mistakes… properly programmed accounting systems do not make mistakes as they generally perform redundant task over and over again.

But there IS a danger here. You have to watch out for anomalies. Back in 1986, I got a frantic call from a jobber that had produced statements to customers with charges in the billions of dollars. This could never have happened if the bookkeeper had been paying attention, but she had become so accustomed to letting the computer do her work, she never even noticed the discrepancy.

The situation was created when a pump maintenance employee replaced a computer chip at an automated fueling site that moved the decimal place of the price-per-gallon several place to the right. He neglected to inform the customer and was not even aware the customer’s computer system was collecting the data.

In another case, an in-house programmer had created a $1,000,000 check for an employee named “Mickey Mouse” and inadvertently left the test check in the check file. When the check appeared in a stack for the owner’s signature, he almost had a stroke.

If you are still running your own in-house system, have the person that makes the back-ups bring them to a third party for off-site storage and NOT in the company’s safe. If you have petroleum products stored in the same area where your office is located, you may experience a similar incident that occurred at one of my customer’s sites in November of 2005… before we moved them to ‘The Cloud.”

After twenty-one years of experiencing no problems, the operator had neglected to make back-ups for six months; but even if she had, the safe where she was storing the tapes melted in the oil fire. The only back-ups available were the previous year’s fiscal-year closeout, which thankfully was safe at the owner’s residence. It took six months to reconstruct the data from memory. There were actual cases where they had to call customers to find out what they owed them.  It caused them to suffer through years of IRS and state tax audits before they were given a clean bill of health. On The Cloud, their back-ups are automated, occur several times a day and are safely stored in datacenters located in three states.

A strict regimen of backing up the data must be adhered to religiously. Before we put our customers on ‘The Cloud’, they were responsible for backing up their own data each day. You simply can’t rely on people to do it right every time. And when they screw up, they may be unintentionally exposing your company to great peril.

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