Jack TenneyExtra Point

by Jack Tenney, Publisher

January 2016

In business, time is seldom on your side, so we have invented tons of coping tactics. The beginning of the calendar year seems a good time to review some of the clever ways business people have come up with to beat the clock.

Four-four-five is a good place to start. Since it takes a bit more than 365 days for our fair planet to circle its sun and a week is seven days long, it’s no wonder that the 12 months must vary in length to have a year end on Dec. 31 and another to begin on Jan. 1. If you start with the assumption that a 52-week year is pretty neat and four 13-week quarters make sense, you may elect a fiscal year made up of 52 weeks with quarters each containing 13 weeks. That gets you a very manageable way to compare weeks to other weeks but, of course, you are a day off from the usual 365 and two off in leap years like this one.

So sooner or later, you are going to have a 53-week year to soak up those days. Picking the year is more art than science. A friend of mine made the bonus club at his publicly traded company when an extra week of sales was just what the CEO needed to make the nut for the year. An opposite problem is coming up this year for the state of Vermont budget managers, as an extra day of Medicaid is going to tilt the deficit — oh, my!

Speaking of time benders, “closing the books” early is sometimes justified by the bean counters in order to get statements published on time. Like, what were the sales again? If the order was booked and the inventory was on hand on the 26th, can’t we count it as shipped this month, even though this month started four days early? Well, perhaps, but how are expenses, purchases, cash receipts being tallied? As I said, time management is an art, not a science.

Speaking of timing, Mondays are seldom mentioned as workers’ favorite day. This year, Feb. 29 falls on a Monday. The good news: February rent is a better deal than usual. Which brings me to seasonal adjustments, calendar variances, and Monday holidays.

Seasonal adjustments are economists’ ways of figuring out whether what happened was normal or extraordinary. Accountants use calendar variances to equally burden all production with winter heating bills and summer vacations.

The Monday holidays present small manufacturers with a chance to run their factories flat out Tuesday though Friday, avoid paying for a bunch of Monday holidays, skip a startup per week, and give their folks a ton of three-day weekends. Thanksgiving weekend remains a scheduling bear, of course, and, if you haven’t produced enough goods to take Christmas week off, you must be a retailer.