Balance sheets are a somewhat esoteric topic for product managers. Balance sheets describe a company’s assets, liabilities, and stockholder equity on a specific date. Balance sheets contain many interesting facts. They help product managers do a better job of understanding customers, competitors, and even their own company. Product managers should care about balance sheets.
Three Examples of Why Product Managers Should Care ABout Balance Sheets
To help product managers understand why it is important to care about Balance Sheets. Let’s look at three examples.
Avoiding a Major Contract Renegotiation
A vendor-provided an outsourced service to a mortgage processing company. The service received mortgage applications, used OCR to extract data, and loaded them into an Oracle database. During the Great Recession of 2008, the company had large revenue losses, The contract cost $1.5 million a year. The customer wanted to reduce the cost to $500,000 or they would bring the application in-house. The salesperson wanted to agree since they were compensated on revenue. Some revenue was better than no revenue.
Fortunately, a product manager on the pricing committee did some research. Since the…
