"Discover How An Adding Error Can Destroy A Business."

In 2000, I was trying to salvage a new home construction business. I asked the general contractor to audit and then resubmit the building cost sheets in order to  conclude on a retail pricing strategy needed that would assure the gross margin for a profitable development. All the numbers looked good until I discovered by accident  the totals on on the Excel spreadsheets had been entered instead of calculated by Excel. The math was wrong, the gross margins were wrong and the pricing strategy had to be materially modified.

This afternoon while  reviewing last week's production schedule with a client, I detected the total number of units scheduled to be produced was a number being entered as opposed to calculated by Excel. The math this week was correct.  However, in the same day I learned a key schedule for controlling manufacturing payroll was incorrect because the Excel formula for calculating an important total was not considering all the required cells.

In my experience with companies using the most sophisticated systems, significant analysis is often performed on spreadsheets and when that is done there is a meaningful risk of error.

YOU WILL BE WELL SERVED TO CHECK THE FORMULAS ON THE SPREADSHEETS YOU RELY ON FOR KEY DECISIONS.

The plan was to discuss another major area that can blindside a business. It is late. Check back for a continuation of this thread.

The name of this blog is Build  Cash Profits. Cash profits will not be built if the math is wrong.

All the best,

Steve Pohlit, President

Exec Net Consulting

www.ExecNetConsulting.com

www.BuildCashProfits.com

www.TruckingCompanyConsultant.com