All of us are liable to make mistakes every now and then; after all, we’re only human. But there are some seemingly small mistakes that can snowball into something big and bring irreparable consequences to businesses.
If you have typos in a book report, or forget to pay a bill on time, it is easy to be forgiven for these minor errors. However, when you are part of a large company, a simple mistake can turn into a million dollar lawsuit that can render your business helpless or bring it to the brink of bankruptcy.
Listed below are some of examples of little mistakes that resulted in some of the most terrifying losses for businesses.
In 2006, Alitalia made one wrong move on their website that cost the company millions of dollars. By leaving out a couple of zero’s in the cost of their Toronto to Cyprus fare, the company had to shoulder 2,000 tickets at only $39, when in fact the tickets were worth $3,900. A $3,900 plane ticket for $39! Surely you won’t find a bigger discount out there.
In light of this huge slip-up, Alitalia tried their best to cancel all the tickets purchased at the incorrect price. Eventually, though, they had to honor the $39 price tag to appease their disgruntled customers and protect their company name. Now, you do the math. For 2,000 tickets, Alitalia had to cover roughly $7.72 million from their own funds.
Wrong Move on the Stock Market
One stock broker in Japan will probably never forget the fateful day in 2006 when he encoded the wrong digits on his stock market ledger. Instead of selling each share of J-Com stock for ¥610,000, he ended up selling 610,000 shares for a measly ¥1 with a few doomed key strokes. Despite attempts to correct the oversight, the error was not corrected in time and cost the company a whopping $240 million.
Surely all of us misplaces a comma from time to time, but no businessman would want to forget this grave error in comma placement. In a contract with Aliant Inc, Rogers Communications made a tiny error in one clause that resulted in an 18-month long court battle which required them to pay an additional $2.13 million to Aliant. The culprit? A simple comma that should not have been present in the first place!
A Grave Oversight that Clouded Sunny Hawaii
Back in 2009, Hawaii was experiencing a daunting budget deficit made infinitely worse because of a small clerical error. As the 2009 fiscal year was about to come to a close, one government department posted an $8 million growth, when in actuality the department was facing a $34 million budget deficit. Before they even realized what had happened, the Hawaiian government spent the money, digging themselves further into debt.
Looking at these examples might give you pause and serve as a reminder to be extra careful from now on and avoid following in their footsteps.
If you love to budget and the idea of a misplaced decimal point haunts your dreams, you may be a natural born accountant. Take a look at your options for accounting degrees online, such as these accounting associate’s programs.
- Get Free Bankruptcy Help (debt-consolidation-2u.com)
- Top Ten Most Overlooked Tax Deductions (2009taxes.org)
Small Money Mistakes With Large Financial Consequences