499: When Leveraging Footprint Economics | Nadeem Moiz, CFO, Select Interior Concepts

Listen to the Episode Below (00:37:26)

When asked what his priorities are as a finance leader over the next 12 months, CFO Nadeem Moiz supplies an answer that uses the phrase “shareholder value” not once, but three times. Needless to say, shareholder value appears to be top-of-mind at Select Interior Concepts, a diversified building products and services company.

Explains Moiz: “In a public company, reporting becomes very important. Governance becomes more important and investor relations and shareholder base management are always priorities. So this requires some thought when it comes to the time allocation required for these added functions.” jb

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CFOTL: Can you share a finance strategic moment?

Moiz: There was an experience that I had when I was CFO of a transportation equipment leasing company. One of the areas that I was responsible for was billing and collections. It’s one of those businesses where the average ticket size is about a thousand dollars and the customer base is over 30,000 customers. The customers in that business were very small owner-operator trucking companies. What I found when I got to that role, very quickly, was that the receivables and the collection cycle were just long. We had a collections group, but we always struggled in collecting these small-ticket items; it was difficult. The customer base was very difficult to deal with.

I started evaluating it over a period of time, and then I started looking at the incentive structure for our collectors. What I found was that it was just basically straight pay. I made the case for changing that incentive structure to be more of a success fee structure, almost like a collections agency.

Initially, we started with a small group of folks. The collection group was originally set up. We started with one region of the country, we did a little experiment, and it was quite successful. We had these little incentive awards for hitting certain goals. What we found was that it became a competition. Within that group, that small team of collectors, people were competing with each other. What we found was that once you created a level of competition within the organization, through at least this aspect, it really changed behavior. jb