Latest / The SmallBizChat with Melinda Emerson / Collecting the Cash with Dee Bowden

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Collecting the Cash with Dee Bowden · The SmallBizChat with Melinda Emerson

• 0:00
  I believe that a lot of reasons that small businesses don't do this is because no one
• 0:03
  tells them that, listen, yes, while you've got your contract and while you've got your sale,
• 0:07
  you off you also have to build a relationship with the person who's gonna pay your And a lot
• 0:10
  of times because number 1, nobody talks to you about what's a proper invoice.
• 0:13
  Well, it's it's the name of your customer.
• 0:15
  It's the remittance address.
• 0:16
  It's the what did they buy from you How much is the contract?
• 0:18
  I'm I'm sorry.
• 0:19
  How much the invoice for?
• 0:20
  When are they where they supposed to send the payment to?
• 0:22
  And then did you send it to I'm sorry.
• 0:23
  First of you dealing with corporate contracts or government contracts?
• 0:26
  Who do you send the invoice to?
• 0:27
  It's those things.
• 0:29
  32100
• 0:32
  technician.
• 0:35
  Rips off.
• 0:37
  Ending small business failure.
• 0:39
  Welcome to the smallbizchat podcast with the number one small business expert, Melinda
• 0:45
  Emerson.
• 0:46
  Melinda's goal is to end small business failure.
• 0:49
  And she'll give you the information you need to succeed and live the life you dream of.
• 0:54
  Now here's your host, the small biz chat lady herself, Melinda Emerson.
• 1:03
  Hey there.
• 1:03
  Have you been sitting at your desk?
• 1:05
  Daydreaming about starting your dream business, but don't know what to start.
• 1:10
  Well, honey, I got just what you need.
• 1:13
  My become your own boss online course is coming back this June.
• 1:17
  Starting June 20th, I'm gonna be teaching live my 10 week online course, how to become your
• 1:23
  own boss?
• 1:24
  If you are ready to start your dream business, you need this course.
• 1:28
  I'm gonna give you everything you need.
• 1:30
  To start and run and stay in business.
• 1:33
  Alright.
• 1:34
  Register today.
• 1:39
  Alright.
• 1:39
  Welcome back to the small biz chat podcast.
• 1:42
  I'm Melinda Emerson's small biz lady, your host.
• 1:45
  Now listen, I don't know a small business that hasn't at some point experienced some cash flow
• 1:52
  challenges.
• 1:53
  But listen, if you are watching us right now on our small business lady fan page on Facebook or
• 1:59
  on YouTube, Give me a yes in the chat if you have had cash flow issues in your business.
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  Well, if you have, you are in the right place because my next guest is gonna tell us all how
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  to collect the cash.
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  And I'm so excited to have her with us today.
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  So don't forget to subscribe to our channel and share this show so that other people can get
• 2:24
  all this juicy insight about how to run their business better.
• 2:28
  Now let me welcome my next guest.
• 2:29
  Her name is Dee Fauden, and she is the founder of BCS Solutions, and she is the author of the
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  book collect, the cash.
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  She works with small businesses who wanna solve their cash road problem.
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  Her mission is to keep businesses in business.
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  After collecting $6,000,000 60 days while working for a small IT company, she realized
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  small businesses had fall fallen prey to revenue loss because they don't collect
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  outstanding debt.
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  And so She has a revenue recovery strategy that she's used, and she's been featured in force by
• 3:04
  enterprise and Thriving Global magazine.
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  One of her strategies she uses is reciting affirmations.
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  I wanna hear more about that.
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  Welcome d bound into the small bitch chat podcast, and you guys can check out her book at
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  collect the cash dot bizforward/book.
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  D.
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  Welcome to the small business chat podcast.
• 3:25
  Thank you so much, Leonard.
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  I can do a course correction.
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  My last name is actually Boden, but it's all good.
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  Alright.
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  I'll make sure I hope to fix that going forward.
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  So Detail is your backstory.
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  How did you become an entrepreneur?
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  Well, the story goes like this.
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  You were the way I say this, you wanted to know what had happened was.
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  What had happened was I used to work for a small IT company outside of Boston where I'm
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  originally from.
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  You've worked in corporate, all of you have, and you know how it is.
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  You you you they say welcome aboard.
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  Here's your cubicle, your office, your box, Your plant, in my case, it was Welcome aboard.
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  Here's your cubicle, and here's $8,000,000 that's outstanding, and we have a collections
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  team, and we've not been able to crack code and getting getting these accounts collected.
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  And so I sat in my cubicle and I thought y'all have $8,000,000 of sales on the books, but the
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  money's not in the bank.
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  They're like, Yep.
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  And your resume says, you know, how to collect cash, so we need you to do this.
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  So I'm a believer.
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  I said in my prayer, and then I got quiet.
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  And I real realized that accounts receivable business and business collectors is 4 things.
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  It's problem solving, customer service, gratitude, and eligibility.
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  Those are the softer skills of AR as opposed to the day of sale, like standing, etcetera.
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  So I go to work, collect $6,000,000 and then the unthinkable happens.
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  The CEO of the company says, come downstairs.
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  I'm thinking that that my team, collections, and sales, because we're gonna get bonuses and
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  and commissions.
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  Now he says, listen.
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  Thank you so very much for what you've done, collectively.
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  We've made a executive decision for closing the company today.
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  And we're letting all 100 of y'all go today 2 months before Christmas.
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  This is a true story that's actually in my book.
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  And so after I get out about the floor, I thought I came to work to collect this money.
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  I came and worked, you know, worked in this company, but what what got me to become become
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  an entrepreneur and tell the story was that I wondered how many other small businesses had
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  this issue because everybody talks about you have to get sales, and marketing and all the
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  other things.
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  When nobody talks about the back office or if they do, they talk about it very small.
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  I was like, no.
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  Sales and AR to go together.
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  And when you can learn that sales and AR go together, My book is called Lily, collect the
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  cash.
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  The sale is not complete until the money's in the bank.
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  And so what made me decide to to tell the story write the book Speak about this is that I don't
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  want to fast forward to COVID.
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  I sat and watched large companies, small companies, Broadway.
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  All kinds of things happen.
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  And I watched them go, I wonder how the first question that kept coming up was, I wondered
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  how many of them at sales on the books, but the money was in the bank, but they were also were
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  more thinking about collecting the cash because they just knew, okay.
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  I'm gonna get paid.
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  But I'm like, no.
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  Maybe not.
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  And if you don't track this, That's how that's what got me here is is because what happened to
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  me personally, and I never I didn't wanna see another small business or meter size business
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  go out of business because If you can learn to track your payments, you can preferably collect
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  your cash and stay in business.
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  Now I was reading a survey that Inc.
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  Magazine did, and they basically said that One of the 3 biggest challenges that small business
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  owners face is managing cash flow and payment collection.
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  Does that sound accurate to you?
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  Absolutely.
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  Sounds accurate.
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  And I think that's because number 1, the small businesses is looking at looking at all the
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  things.
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  It's like, okay.
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  I'm getting my first sale.
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  Now I've got my contracts.
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  I've not gotta do my deliverables.
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  I've gotta do other things.
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  And the last thing I'm thinking about was, oh, I've gotta bill bill for the services, and then
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  I gotta collect the cash.
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  And it's like, oh, Yep.
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  That part.
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  And so when when I think when people start to when businesses start to talk about this as a
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  complete cycle, meaning from sale to contract, to order entry, to fulfillment, to deliver an
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  invoice and get paid, then I think they'll see that because it's like right now, that's that's
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  not top of mind.
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  The top of mind is usually getting the next sale.
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  It's not top of mind to collect the cash.
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  So what are the reasons why it's so hard for small businesses to collect their money?
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  1, they're afraid.
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  I believe that they're afraid to to engage with their customer because I think about it like
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  this.
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  If you finally got your pro you finally got your first contract with your first customer,
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  you're like, yes.
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  I got my contract.
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  I'm gonna do this work, and then it's like, oh, I gotta go to back go back around and ask him
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  to ask him to pay me.
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  I think that you need to see it.
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  I think there needs to be a paradigm shift, which is at as confident as you would ask for
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  the sale, you have to be just as confident to ask for the cash.
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  I think that's tweetable,
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  what you just said.
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  As confident as you are to get the contract, that's how confident you need to be to get the
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  cash.
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  I love that, by the way.
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  So how can small business owners avoid these cash flow issues?
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  Number 1, you
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  need a tracking system.
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  I'm old school.
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  I like Excel.
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  Believe you need to set up tabs.
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  You need to have the name the, you know, I'll give you a quick quick lesson.
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  So first tab needs to be the the name of your your customer.
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  2nd tab needs to be the contract number, ideal in contract.
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  So I'm always looking for a number.
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  3rd is how much is the contract for?
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  4th.
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  What do they buy from you?
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  5th, but did he supposed to invoice him 6 when he's supposed to collect the cash, 7 notes.
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  Really simple, very easy, but you need to track that.
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  And that thing is when the payments don't get your bank account, the next day, there needs to
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  be a system replaced, whether you have our email reminders, phone call reminders, all all
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  the above, but you need to have something that's gonna remind you to go and collect the
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  cash because here's the thing.
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  When you don't what what what doesn't get track doesn't get measured.
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  And when you measure it, that's fine.
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  No.
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  Okay.
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  These payments were expected.
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  I you know, because because, basically, if you think about it, it's a fur it's today's is May
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  2nd.
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  So we're looking at the this this month.
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  However, many sales you have on the book is how much money you're expecting to come in on the
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  back end.
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  And if you're not tracking that you won't know, and then that the thing is to diminish a a cash
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  I'm sorry.
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  The minute that I came for payment is missed, that's when you need to realize, okay.
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  I need to have a better system.
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  And so if you have your tracking system, you'll know I'm expecting, say, $10,000 this month.
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  If I don't get 10, When am I what what's what's the next step?
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  Well, I say it this way.
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  The fortune is always in the follow-up, but if you don't do the follow-up, you
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  don't get the fortunes.
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  I think that that is exactly right.
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  So what I mean, but why is this such a common issue?
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  I mean, I I I certainly have experienced this in my business, and and my rule of thumb is the
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  larger the company, the slower they pay.
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  And I've also seen situations where companies will issue net 60, net 90 invoices, but then
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  they'll have a 3rd lar a third party company come along at day 35 or day 38 and say, hey.
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  We'll deposit this cash in your account tomorrow if you give the client a 3% haircut on
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  the invoice.
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  Right.
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  You're talking about factoring.
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  That's that, unfortunately, that's that's not my land of expertise.
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  So I don't really know how to speak to that, but I I I realized I I teach and talk to
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  customers about, basically, track your payments, follow-up with accounts payable,
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  prepare our proper invoice, make sure you and also make sure you're building relationship
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  with the person who's actually gonna cut the check.
• 9:51
  I believe that a lot of reasons that small businesses don't do this is because no one
• 9:55
  tells them that, listen, yes, while you got your contract and while you got your sale, You
• 9:58
  off you also have to build a relationship with the person who's gonna pay your bill.
• 10:02
  And a lot of times, because number 1, nobody talks to you about what's a proper invoice.
• 10:05
  Well, it's it's the name of your customer.
• 10:06
  It's the remittance address.
• 10:08
  It's still what did they buy from you?
• 10:09
  How much the contract?
• 10:10
  I'm I'm sorry.
• 10:11
  How much the invoice for?
• 10:12
  What are they where are they supposed to send the payment to?
• 10:14
  And then did you send it to I'm sorry.
• 10:15
  First of you dealing with corporate contracts or government contracts, you send the invoice
• 10:19
  to?
• 10:19
  It's those things.
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  And I feel like that's a piece that gets missed because it's like, oh, I wasn't paying
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  attention to the details, but it's always you always have to pay attention to the details
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  because If you don't, that's how it would just get lost.
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  That's how payments gets missed.
• 10:32
  That's how your your your cash flow gets impacted.
• 10:34
  And like I said, share at the beginning of the conversation, I worked for a company that had
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  $8,000,000 of sales on the books and not in the bank, but there was no there was no problem
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  solving with that.
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  And then yeah.
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  Well, I'll see.
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  I'll I'll end it with them.
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  That was a there was no problem solving with that.
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  Well, how you want you have to wonder how could a company survive with 8,000,000 dollars
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  outstanding, a small business anyway.
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  I mean, that seems like a lot.
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  I don't
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  think the company was overall, but that's, like, How do you go with $8,000,000,000 unpaid
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  invoice?
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  I'll I'll I'll speak to that because when I when I got hired, my Yeah.
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  I I'll be I'll be totally transparent.
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  When I got hired, I was in shock.
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  I was like, y'all have how much?
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  They're like, yeah.
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  And I and here's the thing.
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  It wasn't just me.
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  They actually had a collections team So the first thing the first thing the first question
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  that came up for me was, okay, level of skill to do this work because, clearly, When you're
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  doing accounts receivable, you have to be a problem solver.
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  You have to get into the weeds.
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  You have to ask direct questions.
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  You also have to figure out, okay, follow follow the sales transaction.
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  So what happened with sale?
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  What happened with the contract?
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  What happened with the payment terms?
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  And then in one in one of the cases of one of the contracts or one of the vendors, they said,
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  deep.
• 11:45
  Of the of the $8,000,000 that's that you're owed, 2,000,000 can be collected be can be
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  collected when you change your when you acknowledge that we change our billing system.
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  So for example, I called the vendor and said, hi.
• 11:56
  MGM calling on behalf of whatever company.
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  They said, well, we changed our billing system.
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  We'd be like going for, like, Microsoft Excel to say quick books or another another billing
• 12:04
  system.
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  And I said, when did you notify the company?
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  They said, oh, we sent a we sent out an email to all of our vendors saying we're channeling
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  changing billing systems.
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  My first thought was wow.
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  How did how did my team my former team miss this email?
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  That's the first question.
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  And then how come nobody thought to call him and say, hey.
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  What happened?
• 12:20
  So I asked for the email.
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  I took it to the comp controller at the time, and she was like, are you serious?
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  So we can get 2,000,000 of the 8,000,000, and we just reformat the invoices and submit it to
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  the new system.
• 12:29
  Yes.
• 12:30
  That's called problem solving, but that's the piece.
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  That's the key that was missing because no one took the took the time to ask the question of
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  how come this isn't happening versus What the way the way AR is usually seen is that you're
• 12:41
  basically dialing for dollars.
• 12:43
  And, unfortunately, that's the that's the perception everybody thinks that AR collections
• 12:47
  is straight dollar for dollars.
• 12:49
  It's usually seen as very extremely aggressive.
• 12:51
  It's not seen as you have to do the problem solving, the customer service, the gratitude,
• 12:54
  the relationship building, and the follow-up.
• 12:57
  That's how I do collections, which is very different than than most than most people talk
• 13:00
  about it or do it.
• 13:02
  But you also use affirmations as part of your process.
• 13:05
  Can you talk to
• 13:05
  us about that?
• 13:06
  Sure.
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  The reason I use affirmations.
• 13:08
  Affirmations is a mindset.
• 13:09
  It's basically, how are you talking to yourself before you get on the phone?
• 13:13
  I believe I do it this way.
• 13:14
  I call it the collect I do call it the collection zone.
• 13:16
  This pregame.
• 13:17
  There it's a fall y'all who like sports y'all appreciate this.
• 13:20
  If you are like I'm your sports fan, you'll love this.
• 13:23
  Collection zone, pregame, How many accounts do you have that are that are net 30, net 60, or
• 13:27
  net 90?
• 13:28
  You have to get into the mindset of how you're gonna deal with those customers because some of
• 13:31
  this, there's one or more reasons why you haven't gotten paid.
• 13:34
  So that's the pregame game day.
• 13:36
  You gotta you gotta set set aside a time to make your calls.
• 13:40
  And you have to be ready for challenges.
• 13:43
  Questions, course corrections, invoices that were misplaced, data entry, errors, all the
• 13:49
  things.
• 13:49
  And then there's postgame, which is celebration I form firmly believe that you need to
• 13:53
  celebrate your payment.
• 13:54
  The affirmation is, what are you saying to yourself?
• 13:56
  Are you saying that, oh my gosh, this customer is so challenging.
• 13:59
  Oh my gosh.
• 13:59
  This customer is is such Hey.
• 14:01
  Or are you saying, you know what?
• 14:02
  I'm confident I can do this.
• 14:04
  I know how to collect the cash because I know how to problem solve.
• 14:06
  I know how to engage with my customer.
• 14:08
  I know how to get from what had happened was to how do we win?
• 14:13
  That's the affirmation process.
• 14:14
  That's what I use.
• 14:16
  I love that.
• 14:17
  That is so empowering And, you know, I think really, really important.
• 14:23
  So detail us how can small business owners make it easier for customers to pay them?
• 14:29
  Number 1, ask ask your customer what what's the what's the form of payment?
• 14:33
  Is it electronic funds transfer?
• 14:34
  Is it ACH?
• 14:35
  Also, number 2, prepare a proper invoice and submit it submit it properly and on time.
• 14:39
  That's one of the ways you can make sure you can get paid.
• 14:41
  And 3, if the if the invoice hasn't come in on time, do the follow-up said it earlier, and
• 14:46
  I'll say it again, the fortune is always in the follow-up.
• 14:48
  And unless you unless you don't have a system in place, you won't you won't know that you're
• 14:52
  missing a payment, but basically, prepare proper invoice, Like I said, you know, he's
• 14:56
  asked him, how's their payments?
• 14:57
  Are they paying, ACH or EFT, do a proper invoice, and then make sure that your tracking
• 15:02
  system, you have a date that if this payment doesn't come in the next day, you're doing the
• 15:06
  follow.
• 15:07
  Alright.
• 15:07
  You heard it there first, folks.
• 15:09
  Alright.
• 15:09
  What is the best business advice you've ever been given to?
• 15:13
  Best business advice I've ever been given is this.
• 15:15
  You are a lifelong learner.
• 15:16
  Just because you got into business doesn't mean you know everything.
• 15:19
  You have to be willing to invest in yourself, and that and the investing we can be a variety
• 15:23
  of ways, want its books, to its classes, 3.
• 15:26
  It's being around, be around, and connected with people that are further along in their
• 15:30
  business and asking them, hey.
• 15:31
  Do you have a couple minutes to talk to me about?
• 15:33
  I got this question.
• 15:34
  And making sure that you are willing to learn, you have to be what I call teachable and
• 15:38
  coachable.
• 15:39
  I love it.
• 15:40
  Teaching and coachable.
• 15:42
  Yes.
• 15:42
  And, yes, I'm I'm a believer in all of that.
• 15:45
  Thank you so much, Dee.
• 15:47
  And I just wanna thank you for all of your wonderful advice I'm Melinda Emerson small biz
• 15:51
  lady.
• 15:52
  America's number one small business expert, and I will leave you with this last thought.
• 15:56
  You never lose in business.
• 15:58
  Either you win or you aren't.
• 16:00
  God bless everybody.
• 16:05
  Hey there.
• 16:05
  Have you been sitting at your desk?
• 16:07
  Daydreaming about starting your dream business, but don't know what to start.
• 16:12
  Well, honey, I've got just what you need.
• 16:14
  My become your own boss online course is coming back this June.
• 16:19
  Starting June 20th, I'm gonna be teaching live my 10 week online course, how to become your
• 16:25
  own boss?
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  If you are ready to start your dream business, you need this course.
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  I'm gonna give you everything you need to start and run and stay in business.
• 16:35
  Alright.
• 16:36
  Register today.
• 16:44
  Thanks for listening to the small biz chat podcast with Melinda Emerson.
• 16:48
  Sub scribe to this podcast wherever you listen to podcasts and join us next Wednesday for more
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• 17:01
  website succeed as your own boss.com.
• 17:04
  Thanks again for listening, and we'll see you next week.