1 00:00:00,000 --> 00:00:05,167 < Intro > 2 00:00:05,167 --> 00:00:06,400 - Welcome To Count Me In. 3 00:00:06,400 --> 00:00:09,470 The podcast that brings you an insider's look at accounting 4 00:00:09,470 --> 00:00:12,150 and finance professionals working in business. 5 00:00:12,150 --> 00:00:13,570 I'm Adam Larson. 6 00:00:13,570 --> 00:00:16,270 My guest today is Robert Bendetti Jr. 7 00:00:16,270 --> 00:00:20,400 Robert is a CPA and the CFO of Lifecycle Engineering, 8 00:00:20,400 --> 00:00:22,430 and he joins me for a high-energy discussion 9 00:00:22,430 --> 00:00:24,230 about cash flow management. 10 00:00:24,230 --> 00:00:27,359 He shares timeless wisdom, he learned from an early boss, 11 00:00:27,359 --> 00:00:29,500 to how he uses the latest technologies 12 00:00:29,500 --> 00:00:32,680 to optimize his entire cash flow process. 13 00:00:32,680 --> 00:00:34,660 This is one of those inspiring podcasts 14 00:00:34,660 --> 00:00:38,230 where you can tell the guest is not only a true expert in his field, 15 00:00:38,230 --> 00:00:39,610 but passionate about helping others 16 00:00:39,610 --> 00:00:42,834 take their skills to the next level, enjoy. 17 00:00:42,834 --> 00:00:49,167 < Music > 18 00:00:49,167 --> 00:00:50,480 Robert, I want to thank you so much 19 00:00:50,480 --> 00:00:52,149 for coming on the podcast today. 20 00:00:52,149 --> 00:00:54,167 It's really exciting to have you on. 21 00:00:54,167 --> 00:00:55,440 And today we're going to be talking a lot 22 00:00:55,440 --> 00:00:57,739 about cash flow and cash flow management, 23 00:00:57,739 --> 00:00:59,833 which is near and dear to the accountant's heart. 24 00:00:59,833 --> 00:01:02,829 But before we get to that, I just wanted to start with 25 00:01:02,829 --> 00:01:05,000 if you could just tell a little bit about your story 26 00:01:05,000 --> 00:01:06,667 and how you got to where you are, 27 00:01:06,667 --> 00:01:09,833 and then we'll continue the conversation from there. 28 00:01:09,833 --> 00:01:12,119 - Adam, pleasure to be here. 29 00:01:12,119 --> 00:01:15,340 Cash flow management is my favorite topic 30 00:01:15,340 --> 00:01:17,833 and always has been. 31 00:01:17,833 --> 00:01:22,500 I describe myself as a CFO, husband, father, Ultrarunner, 32 00:01:22,500 --> 00:01:24,400 and when I'm doing all of those things, 33 00:01:24,400 --> 00:01:27,000 I'm thinking about cash flow management. 34 00:01:27,000 --> 00:01:28,333 I don't know about everybody else, 35 00:01:28,333 --> 00:01:29,666 but it's certainly important 36 00:01:29,666 --> 00:01:32,833 and it seems like everywhere I work it has been important. 37 00:01:32,833 --> 00:01:35,833 Yes, a little background, I've always done corporate accounting. 38 00:01:35,909 --> 00:01:40,820 I am a CPA and member of the IMA, best org ever. 39 00:01:40,820 --> 00:01:43,149 but I never worked in public accounting, 40 00:01:43,149 --> 00:01:44,740 it's always been corporate accounting 41 00:01:44,740 --> 00:01:48,000 and kind of the standard internal individual contributor 42 00:01:48,000 --> 00:01:51,950 to manager, director, to VP, to CFO. 43 00:01:51,950 --> 00:01:55,909 - So what is it about cash flow and cash flow management 44 00:01:55,909 --> 00:01:58,666 that excites you so much? 45 00:01:58,666 --> 00:02:01,899 - Really early on, I had a boss tell me, 46 00:02:01,899 --> 00:02:06,166 and he stole this quote, and I don't know who said it originally, 47 00:02:06,166 --> 00:02:11,166 "Revenue is vanity, profit is sanity, cash is reality." 48 00:02:11,166 --> 00:02:12,980 And it just really stuck with me 49 00:02:12,980 --> 00:02:16,019 that everything else is just fun and games, 50 00:02:16,019 --> 00:02:18,660 until we actually get paid cash. 51 00:02:18,660 --> 00:02:23,050 I cannot pay payroll with your hopes and dreams, 52 00:02:23,050 --> 00:02:25,833 your purchase order, your good meeting. 53 00:02:25,833 --> 00:02:29,160 The only thing I can make payroll with is cash. 54 00:02:29,160 --> 00:02:30,500 - That's very true. 55 00:02:30,500 --> 00:02:31,930 And speaking of cash flow, 56 00:02:31,930 --> 00:02:35,640 IMA has a Cash Flow Management course, 57 00:02:35,640 --> 00:02:36,999 that I know you took. 58 00:02:36,999 --> 00:02:38,989 So you can take that course 59 00:02:38,989 --> 00:02:40,640 and you can learn the basis of cash flow management. 60 00:02:40,640 --> 00:02:42,833 Which most accountants do know, but they probably forget, 61 00:02:42,833 --> 00:02:44,666 depending on what their job role is. 62 00:02:44,666 --> 00:02:45,980 But then what happens? 63 00:02:45,980 --> 00:02:47,910 - Yes, first I'm going to plug the course, 64 00:02:47,910 --> 00:02:50,160 free CPE for IMA members. 65 00:02:50,160 --> 00:02:53,840 I am, like many CPAs and CMAs, 66 00:02:53,840 --> 00:02:56,970 always delinquent in getting my CPE. 67 00:02:56,970 --> 00:03:01,150 It's two months before the time to send in the paperwork. 68 00:03:01,150 --> 00:03:02,666 I'm like, "Ha, what? 69 00:03:02,666 --> 00:03:03,720 Do I have to do that again? 70 00:03:03,720 --> 00:03:04,720 Is that every year?" 71 00:03:04,720 --> 00:03:07,332 I don't know how I've forgotten it for 20 years. 72 00:03:07,332 --> 00:03:10,499 But, yes, I love it when there's free CPE, 73 00:03:10,499 --> 00:03:14,166 as a member of the IMA, and, yes, statement of Cash Flows tutorial. 74 00:03:14,166 --> 00:03:16,499 Great course, one hour, little hitter, 75 00:03:16,499 --> 00:03:19,340 is a fantastic reminder on the foundation 76 00:03:19,340 --> 00:03:22,130 of the cash flow statement and how important it's. 77 00:03:22,130 --> 00:03:23,666 But to, "Now what?" 78 00:03:23,666 --> 00:03:27,510 It started to get my creative juices flowing, 79 00:03:27,510 --> 00:03:32,740 and I started to think about also the framework of the days of the fast, 80 00:03:32,740 --> 00:03:35,666 cheap, easy money might be over. 81 00:03:35,666 --> 00:03:42,689 That we might look back at 2010, '18, '19, even '20 82 00:03:42,689 --> 00:03:46,849 as the good times and that the future '23, '24, '25 83 00:03:46,849 --> 00:03:50,700 might be rising interest rates, recession, 84 00:03:50,700 --> 00:03:54,665 it might be inflation all in the same stew. 85 00:03:54,665 --> 00:03:56,900 So no time better than the present 86 00:03:56,900 --> 00:03:59,832 to get your cash flow in order. 87 00:03:59,832 --> 00:04:02,059 - So how do you do that? 88 00:04:02,059 --> 00:04:07,165 - Number one, I think is, obviously, the cash conversion cycle, CCC. 89 00:04:07,165 --> 00:04:10,665 That is the foundation and, yes, check mark. 90 00:04:10,665 --> 00:04:11,700 And I'm not going to cover that 91 00:04:11,700 --> 00:04:13,400 because we're a bunch of accountants. 92 00:04:13,400 --> 00:04:18,739 But next, maybe 102 level accounting, is going to be; 93 00:04:18,739 --> 00:04:21,229 you need to review your customer and job selection 94 00:04:21,229 --> 00:04:22,832 for profit and credit worthiness. 95 00:04:22,832 --> 00:04:25,340 A lot has changed in the past two years 96 00:04:25,340 --> 00:04:27,498 and maybe you looked at it pre-pandemic 97 00:04:27,498 --> 00:04:31,780 and you understood your customer profitability, project profitability. 98 00:04:31,780 --> 00:04:33,880 Or you understood your job profitability, 99 00:04:33,880 --> 00:04:35,780 or your customer credit worthiness, 100 00:04:35,780 --> 00:04:37,998 a lot has changed. 101 00:04:37,998 --> 00:04:40,665 Somebody that was credit-worthy before may not be in the future 102 00:04:40,710 --> 00:04:44,270 And, so, I think right now is the perfect time 103 00:04:44,270 --> 00:04:45,832 to be checking those things. 104 00:04:45,832 --> 00:04:48,040 Number two is what are your policies 105 00:04:48,040 --> 00:04:51,832 and procedures around job or milestone, invoice timing, 106 00:04:51,832 --> 00:04:55,665 and, for that matter, what's your invoice processes like? 107 00:04:55,665 --> 00:05:00,180 Well, did it used to all be physical and now you're fully remote? 108 00:05:00,180 --> 00:05:03,930 Did it used to be lean and now it is cumbersome? 109 00:05:03,930 --> 00:05:05,600 That's the number two thing. 110 00:05:05,600 --> 00:05:08,850 And then the third thing is collections, 111 00:05:08,850 --> 00:05:10,560 not everybody likes collections. 112 00:05:10,560 --> 00:05:13,449 Some people find that it's a little uncomfortable 113 00:05:13,449 --> 00:05:15,090 to, "Am I being annoying? 114 00:05:15,090 --> 00:05:16,150 Am I being rude? 115 00:05:16,150 --> 00:05:17,831 Will the salespeople not like me?" 116 00:05:17,831 --> 00:05:19,580 You need to stop caring, 117 00:05:19,580 --> 00:05:23,640 there is somebody on your team who is a little rough around the edges, 118 00:05:23,640 --> 00:05:26,150 and that is the perfect person to promote 119 00:05:26,150 --> 00:05:30,331 to leader of collections and to be right on top. 120 00:05:30,331 --> 00:05:32,860 Because the squeaky wheel gets the grease 121 00:05:32,860 --> 00:05:35,240 and you want to get the grease, you want to get the cash. 122 00:05:35,240 --> 00:05:40,319 As maybe we are entering into Q4 '22, and '23, and '24, 123 00:05:40,319 --> 00:05:43,539 maybe we're entering into some tough financial times, 124 00:05:43,539 --> 00:05:47,560 if not you, potentially your customers. 125 00:05:47,560 --> 00:05:50,150 - So as the customers enter that tough financial times. 126 00:05:50,150 --> 00:05:52,319 As we're looking at rising interest rates, 127 00:05:52,319 --> 00:05:55,331 and all the different things that are affecting us. 128 00:05:55,331 --> 00:05:59,050 What can accountants do to prepare for that? 129 00:05:59,050 --> 00:06:02,139 You just mentioned some things that they can do. 130 00:06:02,139 --> 00:06:04,280 But I imagine that there are other elements 131 00:06:04,280 --> 00:06:07,498 that they would have to do like technologies, 132 00:06:07,498 --> 00:06:09,498 making sure that all their systems are in place. 133 00:06:09,498 --> 00:06:13,550 Making sure all the regulations and all those things are in place. 134 00:06:13,550 --> 00:06:15,164 But what recommendations can you give them 135 00:06:15,164 --> 00:06:16,831 as we look to that future? 136 00:06:16,831 --> 00:06:21,164 Because it's not going to get better yet. 137 00:06:21,164 --> 00:06:23,320 - Yes, I'll give you level one and level two. 138 00:06:23,320 --> 00:06:25,220 Because sometimes you skip level one 139 00:06:25,220 --> 00:06:26,664 because you assume everybody's doing it. 140 00:06:26,664 --> 00:06:28,998 But maybe there's one person on the call that isn't. 141 00:06:28,998 --> 00:06:31,139 Level one stuff is just to remind the team 142 00:06:31,139 --> 00:06:35,780 that it's really important, that maybe you got PPP money, 143 00:06:35,780 --> 00:06:37,190 or customers were paying you early. 144 00:06:37,190 --> 00:06:38,940 You're a government contractor and the government 145 00:06:38,940 --> 00:06:43,100 was paying you in seven days instead of 27 days. 146 00:06:43,100 --> 00:06:44,250 That's not going to happen in the future 147 00:06:44,250 --> 00:06:46,830 and I know everyone's overtasked, 148 00:06:46,830 --> 00:06:50,831 and they are super busy with other things. 149 00:06:50,831 --> 00:06:53,670 Level one is just reminding the team, 150 00:06:53,670 --> 00:06:56,669 "Hey, sending those invoices out on time, 151 00:06:56,669 --> 00:06:59,831 collecting on time, confirming everything on time. 152 00:06:59,831 --> 00:07:01,440 Know our customers are not going to pay 153 00:07:01,440 --> 00:07:03,960 until receipt of a valid invoice." 154 00:07:03,960 --> 00:07:07,389 Just that basic reminder of the importance. 155 00:07:07,389 --> 00:07:10,110 Number two, is having a conversation 156 00:07:10,110 --> 00:07:12,530 with your key salespeople. 157 00:07:12,530 --> 00:07:15,164 Your sales and growth leaders, reminding them that; 158 00:07:15,164 --> 00:07:18,997 "Revenue is vanity, profit is sanity, and cash is reality." 159 00:07:18,997 --> 00:07:22,130 And that means the two best salespeople, 160 00:07:22,130 --> 00:07:23,580 just reminding them, "Hey, I'm your friend. 161 00:07:23,580 --> 00:07:25,164 I'm your biggest cheerleader. 162 00:07:25,164 --> 00:07:26,610 I'll give you anything you need, 163 00:07:26,610 --> 00:07:29,664 but it is important that these people actually pay us. 164 00:07:29,664 --> 00:07:32,110 Let me know if you hear anything, 165 00:07:32,110 --> 00:07:36,330 any words on the street about any pending doom 166 00:07:36,330 --> 00:07:38,330 because you'll know before I will." 167 00:07:38,330 --> 00:07:40,979 And then also talk to your worst, two salespeople, 168 00:07:40,979 --> 00:07:42,240 you know who they are. 169 00:07:42,240 --> 00:07:43,910 The ones who cause all the trouble 170 00:07:43,910 --> 00:07:46,310 and remind them, "Hey, I'm watching you. 171 00:07:46,310 --> 00:07:49,497 You are not my favorite, Julie and Jessica are my favorite. 172 00:07:49,497 --> 00:07:51,650 You are a troublemaker and I'm watching you, 173 00:07:51,650 --> 00:07:55,164 please don't ruin this for me, it is important that we get paid. 174 00:07:55,164 --> 00:07:56,819 It is not important that you had a good meeting 175 00:07:56,819 --> 00:07:57,970 or that you got a purchase order, 176 00:07:57,970 --> 00:07:59,030 it's important that we got paid. 177 00:07:59,030 --> 00:08:02,830 Do not be promising payment terms that I'm going to deny." 178 00:08:02,830 --> 00:08:05,810 So those are some basic, super basic things. 179 00:08:05,810 --> 00:08:10,410 And, then, yes, technology is super key here. 180 00:08:10,410 --> 00:08:12,330 If you do not have a system 181 00:08:12,330 --> 00:08:14,710 that automates this for you, they are out there. 182 00:08:14,710 --> 00:08:17,663 You need to talk to the many IT vendors 183 00:08:17,663 --> 00:08:18,870 who are trying to help you. 184 00:08:18,870 --> 00:08:22,497 Or if you have a platform, but you haven't purchased that module 185 00:08:22,530 --> 00:08:24,121 that automates all this for you, 186 00:08:24,121 --> 00:08:26,150 because you just haven't gotten around to it, 187 00:08:26,150 --> 00:08:27,830 this is the time to get around to it. 188 00:08:27,830 --> 00:08:31,497 There are some amazing tools that can do a lot of this for you. 189 00:08:31,497 --> 00:08:34,490 So this is the time to look out for that. 190 00:08:34,490 --> 00:08:36,497 Or maybe you're like, "Hey, Robert, Adam, 191 00:08:36,497 --> 00:08:39,663 I've talked to the accounting team, I've talked to the salespeople, 192 00:08:39,663 --> 00:08:43,497 I got that on lockdown, I just integrated and updated IT. 193 00:08:43,560 --> 00:08:45,200 How about training?" 194 00:08:45,200 --> 00:08:48,210 You might have the tool and you might have the talent. 195 00:08:48,210 --> 00:08:50,330 Do those people have the training? 196 00:08:50,330 --> 00:08:51,163 Did you used to have...?" 197 00:08:51,163 --> 00:08:53,060 Now, that you're like, "Oh, yes, we trained them last year. 198 00:08:53,060 --> 00:08:56,830 Is there anybody from last year still around?" 199 00:08:56,830 --> 00:09:00,130 "Hmm, no, oh, they're around but you promoted them." 200 00:09:00,130 --> 00:09:02,610 "Mm, well, they're not doing cash flow anymore. 201 00:09:02,610 --> 00:09:05,570 So the new people, have they been trained?" 202 00:09:05,570 --> 00:09:09,330 So I think training is really key around here. 203 00:09:09,330 --> 00:09:13,663 And, then, also, in this area is if you think, 204 00:09:13,663 --> 00:09:16,830 "Oh, man, I am overtasked and under-resourced, 205 00:09:16,830 --> 00:09:18,620 I don't have time for any of this." 206 00:09:18,620 --> 00:09:22,190 Think fractionally; where do you have a little pocket 207 00:09:22,190 --> 00:09:25,240 within the totality of your organization 208 00:09:25,240 --> 00:09:26,663 that can help in this? Think that. 209 00:09:26,663 --> 00:09:32,410 Or there are people that have had 20, 30 years of experience 210 00:09:32,410 --> 00:09:34,496 and they've kind of semi-retired. 211 00:09:34,496 --> 00:09:38,490 They are a fractional, virtual resources that can help you. 212 00:09:38,490 --> 00:09:39,663 Your system is completely virtual, 213 00:09:39,663 --> 00:09:41,329 people can work from wherever, 214 00:09:41,329 --> 00:09:42,680 and you're like, "I only need somebody 215 00:09:42,680 --> 00:09:43,940 to do this four hours a week." 216 00:09:43,940 --> 00:09:47,510 Oh, my gosh, there are tons of resources available. 217 00:09:47,510 --> 00:09:49,300 If you don't know them, your peers know them. 218 00:09:49,300 --> 00:09:51,370 They could be former employees; 219 00:09:51,370 --> 00:09:53,870 they could be people in industry that you've met at conferences. 220 00:09:53,870 --> 00:09:57,100 You're like, "Oh, I was just talking to Barbara and Latasha, 221 00:09:57,100 --> 00:09:58,839 they recently retired, they were awesome. 222 00:09:58,839 --> 00:10:03,163 I bet they would work for you for four hours to do this." 223 00:10:03,163 --> 00:10:05,160 - Hey, Robert, can you give us some examples 224 00:10:05,160 --> 00:10:08,180 about how technology, and all of these 225 00:10:08,180 --> 00:10:12,620 that you've been discussing, can help the team? 226 00:10:12,620 --> 00:10:15,880 - Two things come to mind; one is just integration of systems. 227 00:10:15,880 --> 00:10:18,329 I've worked at a couple of companies 228 00:10:18,329 --> 00:10:20,662 and this one, my present employer, 229 00:10:20,662 --> 00:10:23,230 have had seasons, where things were not integrated. 230 00:10:23,230 --> 00:10:26,690 And the pieces of the puzzle that have to talk to each other, 231 00:10:26,690 --> 00:10:29,662 were automated until it needed to jump to the next system. 232 00:10:29,662 --> 00:10:32,162 Automated till it had to jump to the next system. 233 00:10:32,162 --> 00:10:34,670 And then there was a physical person 234 00:10:34,670 --> 00:10:36,960 in between those processes, 235 00:10:36,960 --> 00:10:39,662 and that is unbelievably inefficient. 236 00:10:39,662 --> 00:10:44,162 Especially nowadays where people are remote or fractional. 237 00:10:44,162 --> 00:10:46,470 I've got people who have flexible schedules. 238 00:10:46,470 --> 00:10:48,680 So some people take every other Monday off 239 00:10:48,680 --> 00:10:50,149 or every other Friday off. 240 00:10:50,149 --> 00:10:52,329 And it just seemed like they were always 241 00:10:52,329 --> 00:10:55,829 in the middle of an approval process on the every other Monday. 242 00:10:55,829 --> 00:10:58,640 So instead of processing an invoice in three days, 243 00:10:58,640 --> 00:11:02,162 it was taking seven days because people had a flex, 244 00:11:02,162 --> 00:11:05,995 and technology is there to resolve these issues. 245 00:11:05,995 --> 00:11:09,810 And sometimes the systems themselves integrate 246 00:11:09,810 --> 00:11:13,995 and it's a great benefit of using an ERP, sometimes they don't. 247 00:11:13,995 --> 00:11:15,662 Maybe you, at your current employer, 248 00:11:15,662 --> 00:11:19,160 you're using the best-of-class contracts tool, 249 00:11:19,160 --> 00:11:23,162 best-of-class accounting, best-of-class tools 250 00:11:23,162 --> 00:11:24,995 and, so, you need them integrated. 251 00:11:24,995 --> 00:11:28,995 There's external IT resources that'll do that. 252 00:11:28,995 --> 00:11:30,770 One thing I've found real benefit from 253 00:11:30,770 --> 00:11:33,839 is bringing that talent in-house. 254 00:11:33,839 --> 00:11:37,020 I think the importance of somebody understanding 255 00:11:37,020 --> 00:11:39,662 how your systems work, and mapping, 256 00:11:39,662 --> 00:11:42,240 and bridging these are so critical. 257 00:11:42,240 --> 00:11:43,810 That it's an absolute requirement 258 00:11:43,810 --> 00:11:47,995 to have that technology, that skill in-house, 259 00:11:47,995 --> 00:11:54,162 and not necessarily an obvious skill in your standard IT group. 260 00:11:54,162 --> 00:11:58,320 It's not exactly networking, it's not helpdesk, 261 00:11:58,320 --> 00:11:59,980 it is that integration and mapping. 262 00:11:59,980 --> 00:12:03,500 But very often I've found people with the same data analytics skills, 263 00:12:03,500 --> 00:12:05,970 they have a passion around turning data 264 00:12:05,970 --> 00:12:08,495 into the actionable information. 265 00:12:08,495 --> 00:12:11,589 They've got the skills to be able to integrate these systems 266 00:12:11,589 --> 00:12:15,490 and connect them, so that is really critical. 267 00:12:15,490 --> 00:12:17,662 And then these just some cool bolt-ons 268 00:12:17,662 --> 00:12:19,828 that I think are really helpful. 269 00:12:19,828 --> 00:12:22,100 Cloud-based tools, and you can find 270 00:12:22,100 --> 00:12:27,995 a lot of information around collections and credit, in particular. 271 00:12:27,995 --> 00:12:30,180 And I'll just give you two examples 272 00:12:30,180 --> 00:12:34,810 that are coming to mind, one is there are credit watching services. 273 00:12:34,810 --> 00:12:38,769 Back in the day, you had to physically type in a name 274 00:12:38,769 --> 00:12:39,870 because they were a new customer 275 00:12:39,870 --> 00:12:41,310 and they'd give you your report. 276 00:12:41,310 --> 00:12:43,180 Now it does it automatically 277 00:12:43,180 --> 00:12:45,889 and they will send you a color-coded report, 278 00:12:45,889 --> 00:12:48,910 on all your existing customers 279 00:12:48,910 --> 00:12:51,660 or any customers that are in your CRM pipeline 280 00:12:51,660 --> 00:12:53,995 and just let you know red, yellow, green. 281 00:12:53,995 --> 00:12:57,495 So you can manage by exception, I think that's really great. 282 00:12:57,495 --> 00:12:59,995 And then another tool that I found that's really helpful, 283 00:12:59,995 --> 00:13:02,328 that my salespeople were using. 284 00:13:02,328 --> 00:13:06,328 I was paying for, and I didn't have a license, nobody in accounting, 285 00:13:06,328 --> 00:13:09,440 but they were raving about an online tool 286 00:13:09,440 --> 00:13:12,060 they were using to get contact information. 287 00:13:12,060 --> 00:13:13,661 Cell phone numbers, business phone numbers, 288 00:13:13,661 --> 00:13:16,994 email, personal email data. 289 00:13:16,994 --> 00:13:21,120 People were posting on the internet about companies. 290 00:13:21,120 --> 00:13:23,828 We got a couple of people who do inbound and outbound sales, 291 00:13:23,880 --> 00:13:26,300 and they were talking about, "Oh, please don't cut this off. 292 00:13:26,300 --> 00:13:27,530 We think it's great, it gives me all this stuff." 293 00:13:27,530 --> 00:13:30,051 And I was like, "Oh, that sounds really good. 294 00:13:30,051 --> 00:13:32,500 I could use that for collections." 295 00:13:32,500 --> 00:13:34,720 When somebody's supposed to approve something 296 00:13:34,720 --> 00:13:37,250 or pay something, and they're not responding 297 00:13:37,250 --> 00:13:39,400 and I need more contact information 298 00:13:39,400 --> 00:13:42,380 or I want insights into the company 299 00:13:42,380 --> 00:13:43,328 and I want to set up for alerts. 300 00:13:43,328 --> 00:13:47,100 So I was like, "I will pay for this cloud-based sales 301 00:13:47,100 --> 00:13:50,639 and growth research tool, if you'll give me a seat. 302 00:13:50,639 --> 00:13:53,410 And now I have a license to the tool and I'm just typing in there. 303 00:13:53,410 --> 00:13:59,161 I found out, alarmingly, accurate stuff on Robert Bendetti. 304 00:13:59,161 --> 00:14:02,180 And if you're ever wondering, "How are these people 305 00:14:02,180 --> 00:14:06,750 finding my email address, my cell phone?" 306 00:14:06,750 --> 00:14:08,540 Email me, call me, I'll tell you where they're getting, 307 00:14:08,540 --> 00:14:11,949 and I have a license to the site now. 308 00:14:11,949 --> 00:14:14,190 - Hmm, it is just alarming on how much 309 00:14:14,190 --> 00:14:15,994 of our information is out there 310 00:14:15,994 --> 00:14:21,327 and unless you're living under a rock, somewhere, your data is there. 311 00:14:21,327 --> 00:14:23,161 It's quite alarming. 312 00:14:23,161 --> 00:14:25,994 It seems that collections seems to be the only thing 313 00:14:25,994 --> 00:14:30,494 that can't be automated, honestly, when you think about it. 314 00:14:30,494 --> 00:14:31,494 - I think it can. 315 00:14:31,494 --> 00:14:34,994 Actually, I'll challenge that. - All right. 316 00:14:34,994 --> 00:14:39,269 - And I'll illustrate it by something we all are burdened by. 317 00:14:39,269 --> 00:14:41,440 Have you noticed, Adam, that when people 318 00:14:41,440 --> 00:14:43,610 are trying to sell you something. 319 00:14:43,610 --> 00:14:47,270 There is an obvious schedule, an email schedule, 320 00:14:47,270 --> 00:14:51,827 how they are going through a process of first contact, 321 00:14:51,827 --> 00:14:54,259 second contact, third, and fourth? 322 00:14:54,259 --> 00:14:55,880 And then the fifth one is always, 323 00:14:55,880 --> 00:14:58,570 "Oh, have I reached the wrong person, Adam? 324 00:14:58,570 --> 00:15:00,750 If you're not the person who makes these decisions, 325 00:15:00,750 --> 00:15:02,560 could you recommend who I should?" 326 00:15:02,560 --> 00:15:05,300 And then the sixth, I mean, really final email 327 00:15:05,300 --> 00:15:10,827 is that "Hey, just pinging you one more time." 328 00:15:10,827 --> 00:15:12,827 And trying to be funny. 329 00:15:12,827 --> 00:15:17,149 So it's just an email automation tool 330 00:15:17,149 --> 00:15:19,660 for inbound and outbound marketing. 331 00:15:19,660 --> 00:15:22,540 So those email automation, 332 00:15:22,540 --> 00:15:26,327 the same exact tool and principles can be used for collections. 333 00:15:26,327 --> 00:15:29,660 Everybody, who's listening, has a process that; 334 00:15:29,660 --> 00:15:33,327 "Here are whatever my standard payment terms are at..." 335 00:15:33,327 --> 00:15:36,827 Well, I'll just say my company, there's the reminder, 336 00:15:36,827 --> 00:15:39,827 but just before it's due or when it's due. 337 00:15:39,827 --> 00:15:43,120 Then it's the day after it's due there's another reminder, 338 00:15:43,120 --> 00:15:48,279 and then escalating over time with escalating words. 339 00:15:48,279 --> 00:15:52,579 And there's a number of emails and then there's phone calls. 340 00:15:52,579 --> 00:15:54,493 You don't have to just remember that process, 341 00:15:54,493 --> 00:15:59,120 you can set up a bot to automatically do that. 342 00:15:59,120 --> 00:16:02,827 "If this happens, then I want this cadence to automatically happen." 343 00:16:02,827 --> 00:16:05,380 You don't have to touch any of it until the phone call. 344 00:16:05,380 --> 00:16:10,130 And it's even possible to automate the telephone call 345 00:16:10,130 --> 00:16:11,759 and when somebody actually picks up 346 00:16:11,759 --> 00:16:13,993 and Adam says, "Hello." 347 00:16:13,993 --> 00:16:16,029 Then a human would ring their phone 348 00:16:16,029 --> 00:16:18,160 and they'd have to pick up. 349 00:16:18,160 --> 00:16:21,449 That's kind of hard to automate that step for accountants, 350 00:16:21,449 --> 00:16:26,130 but it is possible, all of that is absolutely possible. 351 00:16:26,130 --> 00:16:26,826 And you don't have to do it yourself, 352 00:16:26,826 --> 00:16:27,660 you can pay someone. 353 00:16:27,660 --> 00:16:30,339 If you're large enough, you can just pay a firm 354 00:16:30,339 --> 00:16:34,089 to do all of this for you, the entire process. 355 00:16:34,089 --> 00:16:36,160 - So I guess I can stand corrected, 356 00:16:36,160 --> 00:16:38,491 because the way you had originally described it, 357 00:16:38,491 --> 00:16:41,720 it seemed like it was the only kind of a manual process. 358 00:16:41,720 --> 00:16:43,430 But it sounds like you can automate things. 359 00:16:43,430 --> 00:16:45,120 And, so, everything that you're describing 360 00:16:45,120 --> 00:16:47,660 is RPA, Robotic Process Automation. 361 00:16:47,660 --> 00:16:50,769 And, so, maybe you can describe a little bit for our audience 362 00:16:50,769 --> 00:16:55,459 the importance of RPA and other AI elements within cash flow. 363 00:16:55,459 --> 00:16:59,826 And how important that is to being part of the future? 364 00:16:59,826 --> 00:17:01,900 - Yes, I think, it's supercritical 365 00:17:01,900 --> 00:17:07,159 and it's important right now more than before. 366 00:17:07,159 --> 00:17:09,640 There was a big push towards lean accounting 367 00:17:09,640 --> 00:17:11,760 over the past 10, 20 years. 368 00:17:11,760 --> 00:17:15,289 We've all taken the classes, I mean, it's lean. 369 00:17:15,289 --> 00:17:17,510 Our principles are not just applicable 370 00:17:17,510 --> 00:17:19,993 to manufacturing and operations, 371 00:17:19,993 --> 00:17:22,326 certainly, applicable to accounting. 372 00:17:22,326 --> 00:17:25,150 But a lot of our lean processes were lean 373 00:17:25,150 --> 00:17:28,493 when we were all physically next to each other, 374 00:17:28,493 --> 00:17:33,929 and not potentially either lean for the digital age 375 00:17:33,929 --> 00:17:38,200 or lean for the new process of being hybrid, remote-flex. 376 00:17:38,200 --> 00:17:41,326 I know my company wasn't, I can only speak for myself. 377 00:17:41,326 --> 00:17:43,860 We were lean for an old way of doing business, 378 00:17:43,860 --> 00:17:45,380 not the future way of doing business. 379 00:17:45,380 --> 00:17:48,159 So I think that is a foundational piece. 380 00:17:48,159 --> 00:17:51,490 Drucker famously said, "The worst thing you can do 381 00:17:51,490 --> 00:17:55,210 is automate a process that should never be done." 382 00:17:55,210 --> 00:18:01,870 So don't skip that step, re-look at your processes and procedures. 383 00:18:01,870 --> 00:18:03,040 Do you have procedures? 384 00:18:03,040 --> 00:18:04,050 Are they written? 385 00:18:04,050 --> 00:18:05,960 Are they the best? 386 00:18:05,960 --> 00:18:07,950 Are they being followed? 387 00:18:07,950 --> 00:18:12,220 Then lean them out, lean those steps out. 388 00:18:12,220 --> 00:18:17,000 There's something between 80 and 95% waste in all processes. 389 00:18:17,000 --> 00:18:18,880 Don't be surprised if you find waste. 390 00:18:18,880 --> 00:18:21,809 Be surprised if you don't because you did it wrong, 391 00:18:21,809 --> 00:18:23,679 if you don't find any. 392 00:18:23,679 --> 00:18:25,492 So don't skip that step. 393 00:18:25,492 --> 00:18:28,400 We all like to skip step one, 394 00:18:28,400 --> 00:18:31,020 I'm a big proponent of don't skip step one. 395 00:18:31,020 --> 00:18:33,289 And then, secondly, so it's lean, lean-ish. 396 00:18:33,289 --> 00:18:35,860 All right, now, process automation. 397 00:18:35,860 --> 00:18:38,260 Automate those steps within that process 398 00:18:38,260 --> 00:18:41,050 so that humans are not having to touch every piece, 399 00:18:41,050 --> 00:18:43,325 it's really hard to come by humans. 400 00:18:43,325 --> 00:18:44,650 It's hard to find young people 401 00:18:44,650 --> 00:18:47,049 who want to work in accounting and be at a desk. 402 00:18:47,049 --> 00:18:49,799 So, I mean, maybe you have an overabundance 403 00:18:49,799 --> 00:18:51,440 of accountants at your company, 404 00:18:51,440 --> 00:18:54,590 please share because the rest of us don't. 405 00:18:54,590 --> 00:19:00,970 So take those manual steps off of their fingers, process automation. 406 00:19:00,970 --> 00:19:03,760 The ERP that you bought, the accounting system, 407 00:19:03,760 --> 00:19:07,120 the contracts, HRIS, ATS, those tools already have it. 408 00:19:07,120 --> 00:19:10,419 If you're not using it or if you haven't purchased it, 409 00:19:10,419 --> 00:19:14,070 put that justification for the capital project and get the boss 410 00:19:14,070 --> 00:19:17,809 and the boss's boss to sign off, process automation. 411 00:19:17,809 --> 00:19:22,658 So then that's step 102, 101, 102. 412 00:19:22,658 --> 00:19:27,059 Next step is just because in its own little pool, 413 00:19:27,059 --> 00:19:29,825 you have process automation within one step, 414 00:19:29,825 --> 00:19:34,992 that's robotic process automation. 415 00:19:35,130 --> 00:19:38,450 I think of the difference between you can... 416 00:19:38,450 --> 00:19:43,825 I remember being super impressed that I created a macro, 417 00:19:43,825 --> 00:19:49,658 that I would when I was 20, 22. 418 00:19:49,658 --> 00:19:52,158 It was the reason I got my first promotion, 419 00:19:52,158 --> 00:19:55,825 is I had to download a bunch of stuff, 420 00:19:55,825 --> 00:19:59,491 and then format it, and then send it out. 421 00:19:59,491 --> 00:20:05,750 And I created a macro to eliminate all the timing of formatting 422 00:20:05,750 --> 00:20:10,491 and creating the visualization of the data in Excel, by the way. 423 00:20:10,491 --> 00:20:14,991 This is like one step away from stone tablets, people. 424 00:20:14,991 --> 00:20:19,325 I'm 47 years old, and it was revolutionary. 425 00:20:19,325 --> 00:20:22,789 And instead of taking four hours, every Monday, 426 00:20:22,789 --> 00:20:25,600 it took10 minutes, 20 minutes or something like that. 427 00:20:25,600 --> 00:20:27,900 And then I also came in early, nobody knew that, 428 00:20:27,900 --> 00:20:30,220 so that all these reports went out to my division 429 00:20:30,220 --> 00:20:32,350 before the engineers showed up 430 00:20:32,350 --> 00:20:34,860 versus all the other bean counters 431 00:20:34,860 --> 00:20:36,824 they were sending their stuff out at noon. 432 00:20:36,824 --> 00:20:43,324 And, so, I got a reputation as being this amazing lean accountant 433 00:20:43,324 --> 00:20:45,658 when it was just a macro. 434 00:20:45,658 --> 00:20:52,070 Well, my FP&A and data analytics folks, 435 00:20:52,070 --> 00:20:54,080 it takes like no seconds. 436 00:20:54,080 --> 00:20:56,658 They don't download anything. 437 00:20:56,658 --> 00:20:58,929 They don't have to format anything. 438 00:20:58,929 --> 00:21:01,750 They don't attach anything to an email 439 00:21:01,750 --> 00:21:05,324 and don't decide who it goes to. 440 00:21:05,324 --> 00:21:07,910 RPA, all they have to do is identify 441 00:21:07,910 --> 00:21:11,491 what needs to get done, under certain parameters, 442 00:21:11,491 --> 00:21:15,750 and the tool downloads the information formats, 443 00:21:15,750 --> 00:21:19,320 and then attaches to an email that is pushed out 444 00:21:19,320 --> 00:21:21,960 to a distribution just based on authority. 445 00:21:21,960 --> 00:21:23,419 So if people come and go, it doesn't matter, 446 00:21:23,419 --> 00:21:25,210 it's just the authority group. 447 00:21:25,210 --> 00:21:26,210 And then they don't have to touch anything, 448 00:21:26,210 --> 00:21:31,470 it takes, I think, four seconds might be an overstatement, RPA. 449 00:21:31,470 --> 00:21:35,770 All stuff I thought was cool, I mean, I liked doing it, 450 00:21:35,770 --> 00:21:38,039 but there's other value added stuff 451 00:21:38,039 --> 00:21:42,490 I could be doing like collections and, so, that's RPA. 452 00:21:42,490 --> 00:21:45,620 And then IA, machine learning, 453 00:21:45,620 --> 00:21:52,520 that's like the machine suggested that this is a report that 454 00:21:52,520 --> 00:21:54,991 the executive team needs to see. 455 00:21:54,991 --> 00:21:58,990 And it suggests for you things that you're not looking at. 456 00:21:58,990 --> 00:22:03,490 Here, I through this dataset, have identified exceptions 457 00:22:03,490 --> 00:22:06,380 and is pushing that out to you. 458 00:22:06,380 --> 00:22:08,111 You don't have to pull it, you don't have to request it, 459 00:22:08,111 --> 00:22:10,990 it's pushing and suggesting because you've given the dataset 460 00:22:11,100 --> 00:22:13,990 some parameters, "Hey, I like to see exceptions." 461 00:22:13,990 --> 00:22:17,157 Well, then it'll suggest some exception management to you. 462 00:22:17,157 --> 00:22:22,660 That's exciting and new age, and where we're moving. 463 00:22:22,660 --> 00:22:27,880 I started and I'll end with all businesses are digital businesses, 464 00:22:27,880 --> 00:22:29,840 and if you're not, you're going to get left behind. 465 00:22:29,840 --> 00:22:32,400 If you don't know how to do this, you're going to get left behind. 466 00:22:32,400 --> 00:22:33,470 But you don't have to do it alone. 467 00:22:33,470 --> 00:22:36,809 Adam, I think we've said, all along, there's tools 468 00:22:36,809 --> 00:22:40,480 and or there's talent you might have on your team, 469 00:22:40,480 --> 00:22:41,323 you just need to equip. 470 00:22:41,323 --> 00:22:42,840 They might have a passion around this 471 00:22:42,840 --> 00:22:45,190 and you might just be able to say, "Hey Latasha, Julie, 472 00:22:45,190 --> 00:22:46,823 you're in charge of this, I'll support you. 473 00:22:46,823 --> 00:22:48,600 Tell me what you need, let's go." 474 00:22:48,600 --> 00:22:52,150 Or fractional, bring in some fractional resources 475 00:22:52,150 --> 00:22:55,490 that know how to do this if you're that medium-size company. 476 00:22:55,490 --> 00:22:58,409 - Yes, I think we all felt that same way 477 00:22:58,409 --> 00:22:59,657 when we made our first macro, 478 00:22:59,657 --> 00:23:04,823 when we were in our early twenties, honestly. 479 00:23:04,823 --> 00:23:07,823 - Yes, gosh, I literally got a promotion for that. 480 00:23:07,823 --> 00:23:13,140 And new age, now we live in a different time. 481 00:23:13,140 --> 00:23:16,657 I have conversations with my internal team, 482 00:23:16,657 --> 00:23:20,157 to talk about digital and data management around, 483 00:23:20,157 --> 00:23:22,529 and we're not perfect, I'm not preaching, 484 00:23:22,529 --> 00:23:23,710 we do not have this all together. 485 00:23:23,710 --> 00:23:29,490 On the example of a pain point is internally we're a Microsoft Office 486 00:23:29,490 --> 00:23:32,309 and we use Microsoft Cloud, Azure 487 00:23:32,309 --> 00:23:34,990 and we're a Power BI shop, and a passion around that. 488 00:23:34,990 --> 00:23:39,950 External, a different team, sales and growth, 489 00:23:39,950 --> 00:23:44,720 they like AWS and Amazon and Onesite, for data analytics. 490 00:23:44,720 --> 00:23:51,279 Yes, those are two different tool sets, two levels of mastery. 491 00:23:51,279 --> 00:23:54,990 You'd think like, "Don't you use the same thing inside and outside?" 492 00:23:54,990 --> 00:23:59,200 No, we don't, so we don't have it all perfect. 493 00:23:59,200 --> 00:24:02,990 I am a work in process and every company, 494 00:24:02,990 --> 00:24:04,840 we all work out, all the listeners, 495 00:24:04,840 --> 00:24:07,659 I'm sure even Adam and the IMA, we're a work-in-process, 496 00:24:07,659 --> 00:24:08,890 we don't have it all figured out. 497 00:24:08,890 --> 00:24:10,501 - Oh, yes, we all don't have it figured out. 498 00:24:10,501 --> 00:24:14,480 And I think the goal would be to how can we have all of our systems 499 00:24:14,480 --> 00:24:16,309 talk to each other in a better way, 500 00:24:16,309 --> 00:24:18,156 so that we can better help our customers. 501 00:24:18,156 --> 00:24:20,980 And, essentially, the topic of this podcast 502 00:24:20,980 --> 00:24:22,740 is so we can have better cash flow management 503 00:24:22,740 --> 00:24:24,870 because cash, until you get your cash, 504 00:24:24,870 --> 00:24:27,590 you can't do anything, like you said in the beginning. 505 00:24:27,590 --> 00:24:31,429 - So important now, and to test the importance of it, 506 00:24:31,429 --> 00:24:36,940 just a closing thought, Adam, I think is around test your assumptions. 507 00:24:36,940 --> 00:24:39,710 You just completed a budget or within the next quarter 508 00:24:39,710 --> 00:24:42,029 you will create a budget 509 00:24:42,029 --> 00:24:46,780 and now, more than ever, stress test your budget, 510 00:24:46,780 --> 00:24:50,989 and then stress test that not only for profitability but for cash flow. 511 00:24:50,989 --> 00:24:54,510 Because there's a chance things are much worse 512 00:24:54,510 --> 00:24:57,322 or could be much worse than you think. 513 00:24:57,322 --> 00:25:01,590 Everywhere I've worked, 20% of the products, 514 00:25:01,590 --> 00:25:05,760 or services, or SKUs drive 80% of the profitability, 515 00:25:05,760 --> 00:25:08,050 and it's important to know which one. 516 00:25:08,050 --> 00:25:12,530 Which are those 20% of SKUs that have that big of an impact? 517 00:25:12,530 --> 00:25:14,880 The clients, the SKUs, the products and services, 518 00:25:14,880 --> 00:25:17,070 and stress this what if that industry 519 00:25:17,070 --> 00:25:19,529 or that customer was really impacted 520 00:25:19,529 --> 00:25:24,679 by changing interest rates or by a recession inflation? 521 00:25:24,679 --> 00:25:28,450 And what would that do to your budget and, in particular, your cash flow. 522 00:25:28,450 --> 00:25:30,340 This is the time, this is a call to action, 523 00:25:30,340 --> 00:25:33,539 as I leave, to stress test the budget 524 00:25:33,539 --> 00:25:36,322 for those key assumptions. 525 00:25:36,322 --> 00:25:37,989 - Well, I think we'll end on that. 526 00:25:37,989 --> 00:25:39,170 Robert, thank you so much 527 00:25:39,170 --> 00:25:41,130 for coming on the podcast today. 528 00:25:41,130 --> 00:25:42,440 Your knowledge and expertise, 529 00:25:42,440 --> 00:25:45,799 I know, will help our members and all listeners. 530 00:25:45,799 --> 00:25:47,155 Whether they're a member of IMA or not, 531 00:25:47,155 --> 00:25:50,655 as they continue on and become better accountants. 532 00:25:50,655 --> 00:25:52,655 - Well, they better join the IMA. 533 00:25:52,655 --> 00:25:56,179 They have excellent conferences and an excellent podcast. 534 00:25:56,179 --> 00:25:58,019 Thanks for having me on, Adam. 535 00:25:58,019 --> 00:26:00,322 < Outro > 536 00:26:00,322 --> 00:26:02,822 - This has been Count Me In, IMA's podcast 537 00:26:02,822 --> 00:26:05,100 providing you with the latest perspectives 538 00:26:05,100 --> 00:26:07,655 of thought leaders from the accounting and finance profession. 539 00:26:07,655 --> 00:26:10,470 If you like what you heard and you'd like to be counted in, 540 00:26:10,470 --> 00:26:12,929 for more relevant accounting and finance education, 541 00:26:12,929 --> 00:26:19,488 visit IMA's website at www.imanet.org.