Follow by Email

Monday, January 2, 2017

The Cheque - Happened December 2005

This is the first story I have written in nearly 2 months. The long hiatus was due to our move from Toronto to Saint John, New Brunswick, and the fact that it has taken me a long time to give myself permission to begin spending time on non-work related pursuits.

This is a story about determination in the face of fear. Have you ever been in a situation at your job where you were fairly sure you were going to be in a world of shit if you couldn't pull something off? That something seems nearly impossible, but you have just long enough to give it a shot, and your stomach is in such tight knots that you can't help but try, as it is all you can do to keep your mind off your impending doom. This story is about one of those very moments.

In November 2004, I had moved from Bathurst, New Brunswick to Toronto, after being unceremoniously fired by my employer, Gary Lyon over what amounted to a personality clash. In retrospect, I accept more of the blame for what happened than I was prepared to do at the time. Despite the horrible situation that this presented my family with, I did manage to land a good job, with a mid-sized accounting firm within 3 weeks of our arrival. This firm was called EvansMartin, and it doesn't exist anymore, having been acquired some years ago, by a growing national firm. However, it was a fantastic job, in which I grew tremendously, and nearly made it to partner, before I left in frustration in May of 2009.

However, my first year there was not all rosy. Although I had some early successes, I also found myself in some shitty situations that had the potential to cost the firm money, or a client. As many of you reading may know, once you have an established rapport with the partners, and once they have decided they like you, you can usually weather these situations. But when you are relatively new to a firm, not so much: you can very easily be blamed and find yourself either out on your ass, or pigeonholed into the "do not promote" category. You know this category. Every office I have ever worked in has the "non-promotable lifer". This is the man or woman, who occupies a somewhat senior role, is fiercely loyal to the organization, works five times harder than anyone else at the office, including the owners or, in this case partners, and never, ever, moves up. Their very existence is confounding, when you first see them - until you realize that at some point early in their career, they got pigeonholed for an unfortunate situation that they were just never able to live down.

Just before I reached my first anniversary I was given the responsibility for a new corporate client. This was a guy in his late 50's who had formed a pharmaceutical partnership with another guy 20 years earlier and had just sold his interest in the partnership for 25 million. He was the type of guy who had never had a lot of money, worked really hard and was now suddenly rich. His company was really a holding company to manage his investment portfolio. I was to be in charge of giving him tax advice and looking after all his filing obligations.

In this previous year, his company made a TON of money and was facing a significant tax bill. Naturally we were looking for ways to defer payment of the tax. A common way this is done is by bonusing out the company's income. Usually there is little to no overall tax advantage to doing this, but in 2005, with this particular client's situation, there was a slight overall tax advantage to be had in doing this. So we bonused out all $3,000,000 of the company's income to the only shareholder - the client. Now, whenever a company pays a bonus to an employee or  shareholder, it has to send the required tax and source deductions in to Canada Revenue Agency (CRA) no later than the 15th of the month after the payment was made. This bonus was paid at the end of November, so the payment for the $1,600,000 of source deductions was due by December 15. I had met with my client and the partner on the file, on December 8, which was a Thursday. I still remember the trepidation that I felt when I tucked the cheque for $1,600,000 into my Daytimer to be dealt with the following day.

At this point, I should mention that EvansMartin had three offices: one in Etobicoke, one in Brampton, and one in North York. I worked in all three offices, moving back and forth between them. This particular client was an Etobicoke client, and that was where I met with him on the 8th. However I had to be up in Brampton for a number of client meetings as well as to supervise on some files that the Brampton staff were working on in the afternoon of the 9th.

So I worked for the morning of the 9th in the Etobicoke office. Our receptionist, Janis was away for that week, and the only other person was a young intern, named Paul. So before I left, I gave Paul the envelope with the cheque and explained that this was an important tax payment that had to be received by CRA by December 15. He assured me that he would make sure that they got it. I left the office without giving it much thought and drove up to Brampton. Now, CRA levies a flat penalty equal to 10% of the payment amount any time a source deduction payment is late. What's more, they don't consider it to be made on time unless they actually receive and cash the cheque by the due date. Just getting in the mail by the date doesn't count. So just bear that in mind.

I spent the afternoon reviewing various audit files and other work that my team was doing, and was in my office at about 4pm when the partner on the file, Mr. Martin, who looks exactly like Bill Gates, walks in and asks me how everything is going:

Mr. Martin: "Chris, did you get that source deduction cheque off to CRA?

Me: Yes, I left it with Paul who said he would send it to CRA today.

Mr. Martin: "Umm, Chris, I do hope you had him send it by courier or registered."

Me: "Well, I didn't specifically tell him to do that. I told him that it had to be to CRA by the 15th."

Mr. Martin: "You must be kidding me Chris. This is $1,600,000! The penalty on this is going to be $160,000 if they don't get it by Wednesday. Today is Friday. I don't know about you, but I wouldn't be real sure that something sent regular mail on Friday would be processed by them on Wednesday. Unbelievable! Well if you want to gamble on this you can explain to the client if it doesn't get there on time I guess. I just don't know about your judgement sometimes."

You know that moment on Titanic, where first officer Murdoch first sees the iceberg and realizes that if he doesn't act fast, the ship is going to hit? Well that was a pretty good approximation of exactly how I felt at that moment. My ass was on the line - big time.

I looked up at John and all I said was "John, please do not worry. I will handle this.". I said it in the calmest voice I could muster, with my best game face on. There would be many more times like this in my professional career where my mettle would be tested like this. The only to pass this test is not to panic, to take charge, to reassure, and then to figure out what the hell to do, and just do it. John looked at me for a few seconds and said "Fine, I will leave it with you." and then he walked out the door.

I immediately call down to the Etobicoke office, where Paul confirms that he had indeed dropped it into the building's mail slot at the end of the hall. My first thought was "I have to get it back out of the mail stream!". My second thought was "OMG! How can I possibly do that? There must be millions of mail items going through the Toronto postal system each day. "Think!" was my next thought. So I thought for a few minutes and realized that the mail for that building would be collected between 4 and 6 and taken to a sorting facility. It was about 4:30 now. If I could just find out where the sorting facility was and I could speak to someone there, I might just be able to intercept it - that is, if I could speak to a government employee who was actually willing to bend the rules to help me out of my predicament.

So I start calling all of the postal outlets near the office. I ask each person if they know where the local sorting facility is, and if they have a telephone number for it. All of the outlets I call confirm that the local sorting office is just down the street from the office and they all give me a number all right, but it leads absolutely nowhere - a series of menus that end in a voicemail box, with no option to speak to a real human being. Then, after calling 10 outlets, I call the last one in the area, and an east Indian man answers. I ask him the same question, only this time he gives me a different number, saying that he knows one of the employees who works there. I call the number and a very co-operative man answers. He tells me that he is one of the sorters there and that this is his cell phone. I apologize and explain that I work for one of the mid-sized accounting firms. I tell him that we had accidentally mailed a $1.6 million cheque to CRA instead of couriering it and that the consequence for doing so could be $160,000 in penalties. I ask if there is any way to get it back from the mail stream.

Surprisingly, he listens and is very sympathetic.

Mail sorter: "I'd like to help you, but I don't know if we will be able to locate it. We have over 100 bags of mail sitting on the floor in the plant from today's collection. I'd be happy to try and find it if you can tell me what I am looking for.

Me: "Oh thank you! I will come down and help you.".

Mail sorter: "I'm afraid that isn't allowed.  We work until 8pm tonight, so if I can't find it before then, I'm afraid there won't be much else I can do. Do you know what the envelope looks like?

Me: "Yes, it is a white #10 envelope with our logo, EvansMartin in the top left corner. Our logo is just our name in bold Times New Roman black letters - nothing fancy.

Mail sorter: "Ok, I will start looking for it. What number can I reach you at?"

Me: 416-628-7716.

He then wishes me luck and hangs up. I look at my watch and see that it is 6:50 pm. I figure that there is nothing more I can do, except pack up. My mind is racing the entire time. I keep thinking that he probably won't find it before quitting time. I finish packing up, posting my time, get my coat and leave to go to my car. It's now 7:15 pm.

I get into my car, place my phone on the passenger seat, and then begin to make my way down Queen St. East in Brampton, toward the 410 south, that will take me to the 427 south, which is they way to the Etobicoke office, and finally home. Just about 2 minutes after I leave the onramp onto the 410, my phone rings. I answer it. It is the guy from the sort facility telling me that he has found the envelope, but I have to get there by 8pm to pick it up. I look at the clock on the dashboard - 7:25 pm. It's going to be close - rush hour is normally over by now, but it's Friday night. So I step on the gas and take my speed to 125 km to try and get there as fast as I can.

I manage to get to within 2 km of the exit that will take me to the West Mall, where the sort facility is and the traffic slows to a crawl. I look up at the dashboard in panic: 7:49. Fuck!! I can't believe this! I am so close and yet so far. So I wait for what feels like 10 minutes, when suddenly the traffic starts to move quickly again. I am able to accelerate and I very quickly reach the exit to West Mall. I look up at the dashboard, and see 7:55. Then I remember that Funke drove this car usually and purposely set the clock fast by 5 min. So it was really only 7:50. I was going to make it. I drove with purpose and care, pulling into the driveway at 7:55 pm. I called the number back on my phone and said I was there. A balding Japanese Canadian man came to the door and handed me the envelope with the cheque. I couldn't stop thanking him. All he said was that he was glad he could help, as he shut the door and wished me well.

The relief that came over me was beyond description. No moment in my professional career even comes close. I got in the car and drove back to the Etobicoke office just up the road. As I pulled in, I could see John Martin and another client talking in the conference room. I parked. got out of the car and went into the office. The conference room door was shut. I knocked and John answered.

John: "Yes Chris?"

Me: "I got it!"

John: "What? How? That's not possible."

Me: "Oh yeah?", as I waived the envelope.

John: "How did you?"

Me: "With great determination and a lot of luck",

John: "Here, give it to me. I will courier it to CRA tomorrow. I have some things to do anyway. Seems I underestimated you."

Yes! I thought, as I walked out of the office and back toward my car feeling triumphant and secure in my knowledge that my path to promotion wasn't blocked after all. I got in the car and drove home.