Isn't that just pretending to work? The structure of 'free-riding' revealed by the loan schedule

It was shortly after I transferred from sales to finance. I couldn't answer the president's question, 'How much are we repaying this year?' I felt very ashamed as the finance manager who knew nothing.

Monthly bank repayment amounts are set precisely for up to 20 years into the future.

There are things where the monthly payment amount is decided far in advance, right? The most typical example is loan repayments to financial institutions. The monthly repayment amounts are set for 10, 20 years into the future. Financial institutions send over a schedule. I used to keep them all separately, but I transcribed them for all loans into a single table and created a summary list. It's a super simple table, but once I made it, it became a convenient tool I checked all the time.

How much are we repaying this year again?

Shortly after I transferred from sales to finance, the president asked me, 'Takahashi-kun, what's the current balance of the loan from Bank XX?' and I couldn't answer immediately. Man, that was embarrassing. After that, I memorized the loan balances for each bank, but then the president asked, 'How much is our group repaying to all the banks this year?' and I couldn't answer that either... I felt frustrated and ashamed. This is an excuse, but since several corporations were borrowing from multiple banks, and some loans had irregular repayment schedules—like once every few months—it was quite hard to remember.

All you need to do is write everything down and add it up

So, what I did was write down every single loan for every group corporation. The loan amount, the current balance, and the monthly repayment amount. In particular, I wrote out the monthly repayment amounts for about the next 60 months. This way, you can know the exact repayment amount even if there are irregular repayments mixed in. *Since the loan balance decreases every month, I update the loan balance section of this table once a month.

Thanks to this table, I can immediately tell how much we need to repay this month and how much we will repay this year. It is extremely useful when creating a cash flow statement. Also, if you review it before negotiating with a bank, you can immediately see what kind of loans and how many we have with that bank, and what the current loan balance is. I think many companies create a loan list. I believe the orthodox ones include the bank name, loan amount, purpose of funds, repayment period, and collateral. If you're going to make one anyway, it becomes a much more useful table if you include the monthly payment amount. It's low-key, but I highly recommend it.

Why does a finance department where obvious things weren't being done exist?

Thinking about it now, it's obvious that you should know the loan balance and repayment amount for each financial institution. After all, the job is to control how to borrow and repay in response to funding needs. However, that wasn't even being done at our company. I, who came from the outside, created the table, taught my subordinates, and made it a routine task. Why wasn't such an obvious thing turned into a rule? In my opinion, it's because 'it's a service industry that doesn't require purchasing or inventory. And because it was a B2C cash business with a high gross profit margin, it was an industry prone to being cash-rich. As a result, it was a sound financial situation where the business could run without grasping loan balances or monthly repayment amounts.' In other words, we were doing business by choosing an easy-to-profit, good business domain. Because the finances were sound, money was circulating even if the finance department wasn't doing its job properly, so the finance department was just complacent.

Am I doing my job? Or am I free-riding on someone else's work?

I think this is actually happening in various places in our company. My former self, who was showing off and feeling proud of the results in store sales, actually had a large part of those results because 'I was allowed to compete in an easy-to-earn domain.' That means, in other words, I was allowed to free-ride on the past work of the person who chose the easy-to-earn domain (in our company's case, the founding president) and was allowed to win. Oh, I can't say anything about the long-time employees in the finance department now. Isn't this something that can happen not only in our company but in many workplaces? It's an inconvenient truth, so it's probably not talked about much. Because everyone wants to believe that their achievements are due to their own efforts.

Can you really call the task you think you're 'working on' your own achievement?

If you currently feel that 'I'm producing results, but I'm not being rewarded,' why not ask yourself, 'Am I actually working, or am I free-riding on someone else's work?' It might be unpleasant, but you might gain more insight than just complaining.

Afterword (Structure of this article)

I wrote this article using a pattern I recently learned: (1) My own experience, (2) The background, reason, and structure of why it happens, (3) Generalization/Universalization, (4) A question to the reader!

Here is the Voicy where I learned that