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Political Accrual

While this BW article calls it Stupid Accounting Tricks I would say it is emblematic of all the stunts we have seen in the corporate sector. We study managing earnings in accounting. Now candidates are managing everything from contributions to attendance.  For exmaple, knowing how much money was raised the first quarter put the pressure on to show lots of contributions by March 31. And so Obama’s grew from about 650 to over 3,000 in one day, counting postmarks and pushing at the last minute, he said.  I am not picking on Obama, it is across the board in both parties. 

It just goes to show that folks will  strive to make the numbers work for them, statistics don’t lie the saying goes….

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8 responses to “Political Accrual”

  1. Jordan McClary Avatar
    Jordan McClary

    My opinion is you can’t blame them, and two they’re supposdly falling all guidelines set forth by laws for candidates. I think there is actually a section in my liquidity management book that focuses on doing exactly what they are doing. They are taking in as much money as they can and waiting as long as they can to pay their bills. Hell this is exactly what Dell does so well if im not mistaken.

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  2. Jason Raper-the big mouth in class...... Avatar
    Jason Raper-the big mouth in class……

    My company does the same thing. The idea is to keep yourself just enough ahead so that the creditors don’t cut you off. The problem that it poses is that when I look to change vendors, I must explain my company credit history for things that have no control over. Always fun and very embarrassing!
    Here’s the BS that I get from AP when I contact them and deliver my standard butt chewing for….hmmmmm…..not paying my damn bills and adding interest expense to my income statement…..
    “Mr Raper….our cash flows are structured to be invested and tied into new business ventures. Paying your bills ontime would slow the growth rate that WE as a company have established for ourselves….” LET ME SHOW YOU MY MIDDLE FINGER AND THE GROWTH RATE IT IS EXTENDING TO MY SATSIFACTION OF SHOWING IT TO YOU…..(sorry I am bitter after 9 years with these idiots)
    Also, to make things worse, my contract is the top revenue and income producing contract in the whole damn company…..I am the one who sold it as well. I engineered it, sold it, and run it. I have to take the hit on my income statement for other contracts that are not doing so well. I love it when we score a new account in my contract and Phoenix gets the revenue for the account. And guess who’s bonus gets affected for this extended courtesy? You guessed it…OL UNCLE JASON……SORRY……that statement brought an “acid flashback” of neverending BS back to me for a moment.

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  3. Jason Raper-the big mouth in class...... Avatar
    Jason Raper-the big mouth in class……

    My company does the same thing. The idea is to keep yourself just enough ahead so that the creditors don’t cut you off. The problem that it poses is that when I look to change vendors, I must explain my company credit history for things that have no control over. Always fun and very embarrassing!
    Here’s the BS that I get from AP when I contact them and deliver my standard butt chewing for….hmmmmm…..not paying my damn bills and adding interest expense to my income statement…..
    “Mr Raper….our cash flows are structured to be invested and tied into new business ventures. Paying your bills ontime would slow the growth rate that WE as a company have established for ourselves….” LET ME SHOW YOU MY MIDDLE FINGER AND THE GROWTH RATE IT IS EXTENDING TO MY SATSIFACTION OF SHOWING IT TO YOU…..(sorry I am bitter after 9 years with these idiots)
    Also, to make things worse, my contract is the top revenue and income producing contract in the whole damn company…..I am the one who sold it as well. I engineered it, sold it, and run it. I have to take the hit on my income statement for other contracts that are not doing so well. I love it when we score a new account in my contract and Phoenix gets the revenue for the account. And guess who’s bonus gets affected for this extended courtesy? You guessed it…OL UNCLE JASON……SORRY……that statement brought an “acid flashback” of neverending BS back to me for a moment.

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  4. Dennis Elam Avatar
    Dennis Elam

    Jason
    I am sure there is a thread to these stories but occasionally I feel like I have walked in on the second reel of a four reel movie…..the point of the article was that campaigns ‘accrue’ contributions when it helps them whether they have been received or not. No doubt they delay recognition when that helps also.

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  5. Jason Avatar
    Jason

    I was just responding to a point that Jordan was making in his statement.

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  6. Jason Raper Avatar
    Jason Raper

    Here I will relate to the article the same point that I was making in my previous post. They hold back payment and underestimate their ability to raise funds for two reasons:
    1. It makes them look better if they can come out ahead of expectations…gee kinda like padding the budget. Nothing can hurt a companies stock price any harder than unexpected losses in a quarterly report.
    2. It keeps the competition on their heels. If the competition thinks that they will do worse than they are going to, maybe one politician will hold back and not try as hard to make such a harse effort towards raising money. This gives others an egde and some sort of a psycological edge.
    IS THAT BETTER?

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  7. Dennis Elam Avatar
    Dennis Elam

    I was just having a bit of trouble following your travails at work, this and that were good comments.

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  8. Matthew Moore Avatar
    Matthew Moore

    Not having alot of real world experience in the business world, but disregarding that statement I’d like comment with my own thoughts behind this subject. You could only imagine that if government officials are acting in this manner, how can we expect businesses to perform ethically from this standpoint? The way I look it, it is a smart way to operate as long as there is no law governing this practice (because we all know ethics in business is unheard of these days). I can’t believe they allow candidates to count contributions that are postmarked before March 31, but not actually received until after that date as contributions during the first quarter. I’d love to see one of those checks fall through as a “hot” check. Like I read above, candidates and financial engineers are definately padding the budget, when they give a projection of expected contributions and they receive way more than they actually projected. I know this makes them look good from a candidate standpoint and I doubt there is anything you can do to prevent it, but it goes to show that not only are business managers and officials constantly practicing this philosophy, but government officials as well. As it goes to show, businesses will almost do anything they can possibly do to make those quarterly earnings look good, when ultimately they are about as reliable as our Texas weather (snow in April).

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