August 30, 2011
Two captains shared lessons that they learned the hard way: (To read the full results from this month's survey about running costs, click here.)
First lesson: "A couple of boats ago, I would estimate expenses and have that amount deposited into an escrow account in my name, then I'd use my American Express card for operating expenses. I racked up hundreds of thousands of miles over a couple of years with the owner.
"I had negotiated this system with the boss in advance, and we were both in agreement that it was a win-win situation. He didn't have to provide me with a card (something he didn't want to do), and I got miles. The money was always there in advance to cover my bill at the end of the month. I'd provide a full accounting for the money that had been deposited, and get another advance.
"However, toward the end of my time with the boat, expenses started to creep higher than what was in the escrow account. We were in the Bahamas and needed fuel. The boss was coming aboard in two days, the new controller was being difficult and didn't want to send funds in advance of the expenses. I did the professional thing, fueled the boat, got provisions, flowers, etc., and prevented delaying the boss' trip, trusting that I could sort it out with the boss sometime later.
"We got back to Florida, I left the boat for other reasons, but I of course wanted the money to cover my Amex bill. It got ugly and I ended up having to hire an attorney to get the reimbursement that had been promised.
"Thankfully, everything was well documented and I had made copies of receipts before sending them to the office. They paid in full, luckily before my credit rating was put at risk.
"My lesson: never, never, ever use your own finances to fund the yacht, no matter how safe you think you are, or how much you trust the owner."
Second lesson: "1. When upon interview or initial hire the owner asks you or your crew to use their own credit card or cash for some expenditures which are promised to be reimbursed, often with the explanation that the previous captain and crew had this arrangement, beware. Never, never, never use your credit card or cash for yacht expenditures. Set the rules from the beginning and do not budge. Very few true professional captains use their own funds or allow the crew to use their funds for yacht-related expenditures.
"2. Always be punctual, accurate and detailed in your monthly accounting report as well as keeping the owner well informed about larger expenditures that are due to be paid. Do not hesitate to let him know (not at the last moment) when petty cash is due to run out. You will most likely gain respect from the owner and his accountant and get the reasonable funds you need. A side perk result will probably be that he will know that you are fiscally responsible and aware and he may realize that he cannot pull the wool over your eyes.
"3. If you apply for a position and have good info that the yacht goes through captains due to financial challenges, beware. You will probably not last long either. Usually, the captains who take these jobs are desperate financially themselves and just want to make a quick buck until something else comes their way. I don't blame them because I have done the same in personal financial struggles, but go into it will your eyes open."
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