This is the fifth in a series of six articles about the volatile financial misfortunes and turnaround of trucking company YRC Worldwide. See parts one, two, three, four and six.
When YRC Worldwide was going through epic financial troubles, starting in 2008, to outside observers a perhaps unsung hero was Joe Whitsel, the company’s vice president of cash management.
With YRC at times battling to stave off bankruptcy, the daily accounts receivable inflow made the difference all too often for comfort. It became extremely crucial that everyone in Whitsel’s group understood how their roles impacted the company’s revenue collection capabilities. As well, they needed to know exactly where the company stood with respect to days sales outstanding (DSO) and the weighted average days to pay vendors. It was also a high priority for the group to make sure the sales and finance teams understood those metrics too.
Whitsel’s team was also educated on how YRC’s lending agreements were written, as the incoming cash wasn’t necessary just to fund daily operations. “A lot of the financing we were able to get in that time frame was the result of the quality of AR we were able to maintain,” says Whitsel. “It played a major part in ensuring that we were able to stay alive and move the business forward.” He notes that DSO, which had peaked at almost 53, fell to a more reasonable 38 by the end of 2014.
The AR and AP staffs knew as well as anyone how close to failure YRC came. “I’d be lying if I said it wasn’t painful coming to work some days,” Whitsel says. “There were many days when we didn’t know if the doors were going to be open or not. But I can say truthfully that all of us, I and the employees who reported to me, felt we owed it not only to ourselves but to every employee in the company to do everything we possibly could to make sure we did live another day.”
Whitsel joined predecessor company Yellow Transportation in 1999 as vice president of revenue management. His charter was to manage AR, doing everything possible to ensure payment from the time a shipment was booked, including ensuring that the appropriate pricing was applied to the freight bill, sending invoices, and collecting funds. He’s still in charge of that, but the job has grown much larger. He now is in charge of both AR and AP for all four YRC Worldwide operating companies, as well as enterprise procurement strategy.
One of the most important items on his plate is keeping everyone just as motivated as they were during the toughest times, with the company now on sounder financial footing. People tend, he notes, to relax a bit when situations improve. In the case of AR and AP teams, that means being more lenient with customers and vendors. “Just because we’ve moved forward doesn’t mean we can afford to let up on what we’ve implemented and are trying to do.”