Tips for Choosing an Online Bank and How to Get Paid on Time – Small Business Show Episode 142

The Small Business Show Episode 142 for Wednesday, October 25, 2017 folks and welcome to the Small Business show here at BusinessShow Co, where we talk about small business. We're by for and about small business owners here in Durham, New Hampshire. I'm Dave Hamilton.

And in Lafayette, California, I'm Shannon Jean. How's it going, man?

Well, today I believe will be the first time after this show. It hasn't happened yet, but after we do, this will be the first time, I think in seven years that I will send out a consulting invoice.

Oh, is it seven years old?

No. You know what's funny though is I had so, you know, I used to do a lot of consulting, just helping people with their computers and that sort of thing. Sure. And that hasn't stopped. It's just taken on different forms and you know, that's what we do over at MacGeekab. And several listeners over time have, you know, asked, would you help? Would you help? And I always sort of am able to help them in a minimal enough way from my standpoint that it's great. Like I help them just because they're a listener and everything's good. And then like, you know, I don't have to a billable event. I mean it could be, but you know, it's like I'm okay with it not being. But last week I actually had not one, but two people really start leaning on me like I, I want to pay you, I want to, I want you to help. It's like, huh, all right, well, you know what? I. Okay, fine, fine, great. In fact, not just fine, great, but, but yeah, it's sort of interesting. I saw.

That's cool.

I looked in the QuickBooks that I use for that company. I have Dave the Nerd llc and, and I still keep it alive because I still run some things through it. I have some income that comes into it, just not technically consulting and not that same kind of thing. And, and I looked to find out, you know, when the last time was and it was back in, in 2000 that. Sorry, 2010. Not 2010. Yeah, that's cool that I sent out an invoice but I did find I had one client who still owes me money and the guy's like, he owes me like 350 bucks or something. Right. I don't expect to ever collect on this by the way. Right. It's clearly a year old debt. I think it's more like nine. But he's like, he was a day trader, still is involved in all kinds of high finance and stuff. More money than he knows what to do with and he can't pay him. And this one invoice, he was a client for years. We used to hang out together and everything. But just this one invoice, he just went off the radar on me.

That's wild.

It's just weird. It's like, why. I don't even understand. I don't even hold it against him. I have no ill will towards him about it, about this, because I could have like, fought for it back when it actually, you know, was relevant. Sure, yeah. Yeah. But, yeah, well, I want to.

Yeah, that's funny. I want to talk about that getting paid and continue with our, our, you know, how to, how to get paid quickly and how to collect if you haven't gotten paid. I want to continue that. We started a couple shows ago and. But, but first I'd love to talk about banks for a few minutes. Well, I, I shouldn't, I shouldn't say I would love to, but let's talk about banks for a few minutes. You know, it's kind of the necess. And I was just starting when we called right before the show talking about things, you know, and the challenge I always face is I have a set of specific needs, kind of like Liam Neeson, you know, a set of specific talents or skills.

Yeah.

And, you know, and I think they're pretty basic. You know, I want to park, you know, a pretty sizable chunk of cash in a bank that I can easily access online and that I can move money out of it on an as needed basis as quick as I need. And, and I move money out of, in and out all the time because, you know me, I'm always doing different things. Yeah, doing different.

You just want to have money at your fingertips, so to speak.

And I don't, I don't ask for a lot for that. You know, banks typically, you know, are under. They call it a high yield savings, you know, paying maybe a little over 1% right now.

I was just going to say it's not like, you know, when they used to pay 6 or something on that.

Yeah, that's correct. That's corre. So it's pretty basic. And I have, I found myself, you know, having to kind of jump around because I keep hitting a wall with one bank or another. First one I was. And I'm not going to name any names, but, you know, you maybe can figure it out. But first one, I joined, you know, and I wanted to dump this in a personal account.

Okay. I did want to jump through business thing, right.

I just wanted to dump it into either a high yield savings or a checking whatever. Now the government apparently has certain rules, or at least the bank, it's the government that you can only send six wire transfers or they call them transactions. Six transactions per month. Per month.

So. So I was just going to ask because, you know, I used to be in the banking business. Yes, this is a money market account is what this is, or this falls under the rules.

Yes, that's correct. They don't call it a money market, but the only way you can get.

That, that's that six thing like savings, you know, when, when it's savings and you got that six per month limit, like that screams. In fact, I was going to ask are these money marketing accounts? And then you said, that's right. And I'm like, ah, yeah, we have a winner.

And I only, you know, because I'd like to make a little bit of money on there, you know, and pays, pays a little bit of bills and you know, that kind of stuff. And so, yeah, so. And that's usually fine because I typically need to access the capital once a week. Okay, that's it, once a week and do about four, maybe five transactions a month. And it's fine and it works out great. And the trouble I have is no matter how much due diligence I do or fine print, I read phone calls, I make FAQs, I go through, there's always something that pops up as a roadblock. First one was a bank I was using last year was, I did not know this and nowhere was it in their documentation that they limited you to $150,000 a week per transaction. Yeah. And normally that maybe, you know, that, that sounds great, sounds like a lot of money. But it typically, you know, I often involved in, you know, some things that are larger than that and I would have to actually call them and try to work around this and, and they just, they just wouldn't allow it.

So I had said so that. Okay, so the issue is if I can sort of take a step up from this. The issue is with an online bank, because that was one of your criteria is that you don't necessarily, at least in this scenario, you don't have someone there that knows you. Well, I would take a local bank, okay.

And no problem if they had very good online services and this, and as a matter of fact, this was a local bank, I can say it was Union Bank.

Okay.

And I know them and they, you know, I've done business with them before, and for this product, that was just their limit. And for me to go up to the next level, they call it. I can't remember the technical name, but I actually had to install some software which, imagine you'd be surprised to know it would not run on a Mac.

In this day and age.

Yeah. I couldn't believe it. And so I hit that and I said, okay, I got it. I'll deal with it. So I realized I need to go. Maybe if I go to a purely online bank and I'll name names. Doesn't matter. So I jumped in with Ally bank, which used to. Darn it, I can't think of the name. Oh, it was GMAC.

Okay.

It was. It was GM's credit branch. And they spun it out and, and did this thing and. And it was fine. I put it in, no problem. I knew that if I sent the wire transfer by a certain time during the day, everything would go through. And that's very, very important, of course.

Yeah. Because you're probably doing business, you know, overseas a lot of times.

Yeah, overseas or. Or one of these things where he. This deal with you, you have to pay us within 24 hours. And if you don't, it makes, you know, made me. Makes me kind of look flaky and shady. So I did this with Ally. And after, you know, I guess, four, five, six months, I thought everything was great. And then they missed two wire transfers in a row. Didn't get them sent out in time. Oh, yeah. And, you know, again. Okay, it happens. And I realized, you know what? I can't do this. It's just too much. And they really had no excuse. They just apologized and their customer service was fine. They just said, yeah, we just missed it, and it went out the next day. Okay. So I said, I have to change. So I jumped to Synergy bank, which used to be GE Capital.

Yeah, I worked for them, too.

Yeah. And so to kind of wrap this up, I'm going to take the whole show. But again, all this due diligence, I do everything. Turns out they. Right when I joined, they put some new controls in to where I would have to call to do the wire transfer.

Oh, yeah, that's good. Yeah. Right. So this isn't just an online bank. You just want online access to be able to do things like this?

I just want to be able to do whatever I want with my money.

Yeah, man.

Is that asking too much?

No. I mean, it is, but evidently it is. Yeah. I used to. You know, I've often employed Russians Right. To do a lot of work. And I've actually got three different teams of that all happen to be in Russia, and only two of them are related. One of them is completely separate. But these days, with things like once elance and guru and those sorts of things existed, it became easier to send money to those people. But I still have, like, the first team that I've been working with for 20 plus years. We don't use any of those things, but we do use wire transfers, and, man, it's always a disaster.

It's difficult.

Yeah. And not only is it, like, difficult on their end because things are always changing for them too.

Yeah.

But. So I have to make sure I have the right information. I can't just wash, rinse, repeat, but on my end, yeah, I have to, like, go in and queue it up. I can queue it up online sometimes, but sometimes I have to use, like a phone tree to do it. And then I get a. And then 10 minutes later or whatever, I have to wait by whatever phone number I remember them having, you know, to them to authorize it. It's like, well, you know, we're. That happens to be a business account. What if Lisa's doing it, you know, and my cell phone is with me on an airplane somewhere? Now she can't approve that transaction because there's only one phone number associated. It's like, man, guys, I get that you're trying to protect me. And once the horse leaves the stable, once the money's gone, you can't go and collect it back. I appreciate that, but can I sign something somewhere that says I'm going to be responsible for what I tell you to do with my money all the time?

Yeah, yeah, absolutely. It's tough. And so, you know, first I was really frustrated because. Well, and I still am a little frustrated because I was doing. The reason why we're talking about is I was doing this right before we got on the show when I was running out of time. If now that the efficiency of how well the wire goes through all depends on who I get on the phone. Okay.

These are great people.

They're super friendly, and I try not to be. I tend to move kind of quick sometimes, and I don't want to be a jerk.

You're not impatient or anything.

Yeah, that's right. And so sometimes, if I get the right person, I can get the wire done in literally five minutes, which. Which should be about what it takes. All you really need.

And I've been sending wires for 35 seconds.

You got it.

Yeah.

You Need a routing number, a bank account number, and a dollar amount.

Yeah. Or a SWIFT code.

Or a swift code. Yep, that's correct. You're going to China, going to Russia, whatever, And. But these folks need. I. I need the address of the company you're sending it to. Yeah, I need the address of the bank you're sending it to. Even though that's completely irrelevant.

Yeah. They want the branch address of the bank. Yes. I have heard tell. I would never do this, but I have heard tell of people making up street addresses out of thin air. Well, feeding them to those people on the phone without any issue whatsoever.

I will tell you that it happens to be this town that I. The company that I Ascend wires to often is very difficult to spend or dispel.

Sure.

And so I just picked a town right next door, which is very easy. And nothing happens. Nothing happens.

They have no clue.

No, they don't. And it's not their. It's nothing. It's not the person. Yeah. It's the bank. So then on top of it, they have to pass it on to another person who says, okay, I want to go over this and confirm everything with you. And I have to go through it again. And so it's.

But then I started story straight at that point, too. If you made something up.

Yeah, yeah, there you go. So I have a whole script now I've come up with, and I keep it in my notes in my Mac, and I go through. Okay, here we go.

I have a thing in Evernote. It used to be in Yojimbo, and it was in whatever I used prior to that. I think simple note or something, but it's the exact same thing. It's like, okay, here's the answers to the questions that you're gonna ask me, and I'm ready.

That's right.

And then the next person's gonna ask me the same questions, and I've got the same answers.

That's correct. And so after going through this, and I do get frustrated because sometimes it can take, like, 20 minutes to get this done. But I realize it's actually a pretty good security system, because I really don't think anybody could go through this that didn't have all these little bits of data.

Right.

Other than me. Other than me. So, you know, so maybe it's okay. I just have to allocate the time. I get a little frustrated. But if, you know, if anybody out there is using an online bank service that they really like, we'd love to hear about it. Feedbackusinessshow Co yeah, you heard my complaints. I mean, my requirements here, here, before. But definitely, you know, share your information and you know, we, we would love to, love to hear from you. For sure.

It's crazy, man.

It is. It is crazy. And you know, I, I want it to be smooth. I want it to work out well and I want to be really nice to these people. But sometimes it can just get a little frustrating, you know, and, and being on the west coast is absolute worst. First place to send, have to send a wire because everybody else run on Eastern time. Yeah, yeah. So I'm always hustling. It's okay. I got to get it there by 9:00am you know, this kind of thing. So to get it, to get it.

To go out, I said feedback@businessshow.co folks.

Yes, I did. Yes, I did. At least I hope I did. Anyway, so I, I want to continue. One of the things you mentioned here, that, that when we first started, that kind of peaked my. When you said, my first invoice in seven years and I joke said, oh, has it been that long, you know, since you did the work? You know, one of the most important things about getting paid is just billing on time. And I think that's especially important. And I want to talk about it for a couple minutes. For people in consulting or service businesses.

Oh, yeah, no, this morning it was like one of the first things I thought of was, okay, wait a minute. Like if I, because I've got these two appointments this afternoon, I figured, well, I'll stack them up, we'll just do them back to back. It's fine. But it was like, okay, wait a minute. I need to make sure that when I finish with each of these, I can send these people an invoice that's easy to pay because I know I'm not going to have time to do that tomorrow. That's right. I know I'm going to be busy. Like, whatever's going to happen is going to happen tomorrow. So. So I did. That's why I went back through QuickBooks and made sure. Okay. Yep. I can, I can generate an invoice here. But I also went and added a web form to my website so that people can go there and pay the credit card if they want.

Yeah.

And that was great. 30 minutes. Even if I never do anything more than these two appointments, it's worth that 30 minutes. Yeah, I agree.

And we had, if you remember Britt from Handler, that was on the show a few months back, she had that same problem where she waited and invoiced a customer, like, six months down the road, and the customer's like, this is 1000 bucks for walking my dog. I can't do this. This is crazy. And so it's critical to invoice frequently, as quick as you can, if you want to get paid on time or set up auto payments.

Yeah, well, auto payments are the best. And then remind the customer, if you don't get payment immediately, just shoot a note and you'll know in your business what the right frequency is, but certainly no longer than 30 days. I even find that just sending a note a week later saying, hey, just wanted to make sure you got that invoice. I often say this way, I'm not pestering you after it's due. You've got time. I just want to make sure you got it, you know?

Yeah, that's right. Yeah. So, you know, making sure they. And to your point, making sure it's easy for them to make the payment, you know, and when we were sending technicians on site, you know, many years ago, I would try to tell them, hey, you guys are just like the plumber, you know, and the plumber doesn't leave until he gets paid. And, you know, when things go back up now it's different because, you know, when your toilet stops working, you're highly motivated to write a check.

Yeah, but I feel like people with their computers these days are similarly motivated. But, I mean, but you're right. The dog walk was a great example. They like, the person wasn't even home. So that's right. You have to leave before you get paid.

Yeah, yeah. And now it's so easy to get to. There's so many payment options.

Right.

And once you just get their credit card, man, and set it up on a billing cycle for them. And you can do that with PayPal, with Square, with Stripe, with, you know, Braintree, all these different services. I just think it's really, really important. But if. But if you're. If you don't get paid, I think again, you have to, like you said, follow up quickly and don't let it lag. And make sure that as you're following up and sending things, or your accounting department is keep a record of every time you're following up. So, you know, and you have that history on their account, whether you go into that invoice and leave notes on it or whatever in your system. And then the one thing that used to drive me crazy is I would hear in our accounting department make phone calls, this kind of thing. And I would walk around the corner and say, hey, don't apologize for trying to get paid.

Right.

I mean, you're just trying to get paid. We're trying to get, you know, we're trying to collect. And some people who. And often I find that it's. People that don't pay their bills on time are very good at spinning things around to try to make, you know, the person who's collecting the funds feel bad. And I think that's really important that you know that, you know, not. You're just. You're trying to get paid for services rendered. So I think it's. I think it's important. Don't apologize.

You don't know. You don't have to apologize for asking to be paid. You know, sometimes I'll say, you know, I know I'm being a pest about this. Right, right. But that, like that. That diffuses it while also still acknowledging. I know that I have to be a pest about this.

Yep. Yeah.

Like, that's right. I'm aware of what's going on. It didn't really have to happen this way. But, you know.

Yeah, yeah. And I think that oftentimes you should. When. When people are not paying, you have to back up and try to look around that and say, you know, why are they not paying?

Right.

You know, what is it? Usually it's not that they don't have the money. It may be something else. And I can recall, and I said this, you know, a couple shows ago, how the value of your services drops precipitously after the fact.

Right, right.

When you perform them. And I think that in service businesses, the longer it goes, again, they start thinking, ah, you know, that that person didn't really do much. And he wasn't. Yeah, he was here for a couple hours, but, you know, he only worked for an hour or whatever.

Sure.

So you. You got to try to talk with them. Whoever you're dealing with is, hey, is there a reason why this has not been paid? And find out what's going on and try to come up with a solution to where you can get some money out of the customer. I think it's a definite, important way to look at it. Try to figure it out.

Yeah. It sucks when you've got to be in that scenario, but there's not much to do.

They're not paying. That's right. At the same time, I found you don't want to back people into a corner because then it becomes just a very negative thing. And if you. If you don't give them some kind of out in some Way either to save face or to.

That's really what it is, is the same face. Yeah, yeah.

They need to be able to say, you know what, oh, this one slipped through the cracks or oh, I didn't get approval. So and so's not, you know, you got to let them have a way to explain it. And then again you, you'll get the money sooner. It's an important part of it.

No, you're right. You can't just go to them and say, I'm right, you're in the wrong. Even if, if everybody knows that that's true, it doesn't matter. Unless that's what matters most to you. Right. If the money matters, then that's not the way to do it. But if being right matters and making sure you say it out loud, then sure. But it just cost you whatever that invoice was worth.

Yeah, well, it could also cost you whatever that client is worth.

That's a much better way of saying it. Yeah, that's right.

You could collect on the invoice, but they could be so frustrated with the way it was collected upon. They could say, you know what, we're not going to use these, these, these guys anymore. And, and I've seen that with emotion.

Happens at that point. Yeah, yeah, that's right.

And, and that's why I think it's important if you, if you can you or whoever's collecting or you know, managing payments for your, for your small business, it's important to have a contact in your customers, either your customer directly or if your customer, if you're billing another business and they have a accounting department, have a contact there, not just accounts payable. I mean, who are you going to call? Are you going to call and talk to Dave or are you just going to call and hit 2 for Accounts Payable and wait on hold and get whoever answers right. The more you can connect with them on a personal level. You know, I think you can get an advocate on your side and be like, hey, look, I know things are tight or whatever. You know, hey, we're a small business. You know, your check really matters to us or, you know, that kind of thing. You can pitch it better than just running into somebody new every single time you call.

Yeah, yeah, for sure. Yeah. It, you, you've, yeah, you've gotta, and, and you gotta, you've gotta find a way to, like you said, offer them something, come up with a payment plan, whatever, whatever that is. They need to, you need to give them a choice, even though really what they need to do is pay you. They. You need to give them some sort of control. So you just have to plant two or more options for them that are acceptable to you. I was going to say equally acceptable, but they probably aren't going to be equally acceptable. But you need. Whatever the worst one is, you need to be able to live with and then present that to them.

Yeah, right. And I think that I used to have a business partner and this. He's a great guy, but he would just get so upset about it because he was like, we're right. We perform the services. We need to get paid. And we would often be talking. Yeah, we are totally right. Right. But you know, you're going to prove yourself right. At the expense of any future business with this customer. And they may not even pay the invoice they have right now. Right. You have to give them those options and, you know, a way to continue the relationship. Because it just be. It just may be. Look, every. We've talked about it here all the time, and people we've had on have talked about it. Cash is king. Maybe they're just having cash flow issues, and you've got to come up with a way to maneuver through those with them. And I think that if you handle or your accounting department handles things correctly, you really can instill loyalty in that client for future business. If they're going through some tough times, they owe you some money, and you can come up with a solution that gets you a little bit of money at a time, maybe, or you negotiate something else. That customer can be loyal to you for a long, long time that you were there and you helped them out. You know how you feel when somebody, you know, really, you know, does something that maybe above and beyond from a customer service standpoint, it's totally true.

Yeah.

It's a customer.

It's a.

Yes.

An unpaid invoice is a customer service opportunity.

Yeah. Well, it's like you said, Dave, we are all in the customer service business.

Right, Right.

And so is your accounting department, you know, and so the amount of care you use when trying to collect payment should be as important as the amount of care you were using to get the customer in the first place. And I don't think you can put too fine a point on it because it all backs up. So if you mishandle the accounting department or some bookkeeper, well, they're not going to have nice things to say to you about, you know, to the rest of the company or whoever. And so you may lose that relationship. But if you handle it really nice and treating with respect and give them the opportunity to make it right, that's a different thing. And it's good customer service.

It's just good customer service. Yeah, you're right. Yeah. Yeah.

So what happens? So the other question I have, I was gonna ask you, Dave, is you have an unpaid bill or more, maybe two, three. When do you stop performing services or selling products to the customer.

Yeah.

That owes you money.

Yeah. So I don't have a hard and fast answer on that. It depends on how the communication is going. If the communication is going. Right.

Yeah.

So if, you know, and a great example of this is like somebody that's on a monthly ad cycle or something. Right.

Okay, sure.

And they start to get behind. Well, okay. You know, I know that we rarely would take on a new client without getting prepayment from them. So chances are we're not going to be in this scenario with somebody we have no history with. Right. It's going to be somebody that we had some history with. They asked to get moved to payment terms. What? You know, whatever. Or their credit card didn't go through one month for the thing, and then it, you know, oh, we'll get you a new one. And then suddenly, well, it's been two months and you still haven't gotten us a new one. You know, like that kind of thing. And those things all happen. Yep. But the real question is, what gut feeling do we get when. Based on the entirety of that relationship? Right. Is it that they're not answering the phone at all? Because, you know, with that, you know, it's probably one cycle, maybe two. Right.

It makes sense. Sure.

I can't hear from them, like everybody gets busy or whatever. That's fine. But if, you know, certainly no more than two cycles. Right. If you're not paying, then we're just going to stop. But, you know, where I've had it and where I've gotten screwed is let's say somebody's paying. Let's say their ad costs a thousand dollars a month. Right. Okay. So two months go by, and now they're two grand in arrears. And they say, okay, you know, we had some. They get on the phone, whatever, we're sorry, we had some cash flow issues, you know, but we're good now. We want to keep advertising. We see the value in that. And, you know, so we'll pay you for the ones that we're doing, and then we'll slowly pay you 100 bucks a month or whatever for the two months in arrears. Right. Okay. Like Fine, great. I'm getting, you know, like that. If I told you to screw off, I can kiss all that money goodbye. So, you know. Okay, that sounds good.

They're working with you is the key thing. They're talking with you.

Right, right. But a lot of times people in that scenario, I've found, tend to be a little over optimistic.

That's nice. That's a good way of saying it.

Yeah. And so the problem is, you know what happens? So they pay, they pay for month three. Okay, great. Or whatever. You know, the. There's two months in arrear, so they pay for the next one. Great. Then maybe they pay for month four and they've made their hundred dollar payment and then their second $100 payment. So we're getting 1100amonth out of them. Okay, good. Now it's the third month of this new plan and the credit card doesn't go through again. Oh yeah, we're over our limit. But just bear with us in a week. Now suddenly it's like, okay, fool me once. In most scenarios, I assume that people are not actively attempting to fool me.

I would agree with you.

Yeah, yeah. But generally no. And you can sort of sniff that out pretty quickly. Quick. But now we're in. Okay, wait a minute. What's about to happen here? Because on that plan, you can suddenly find yourself six months behind, even though you never let it go more than two at a time. And I've been there because I'm, you know, I like to be a nice guy. I've sure. I prioritize customer service. That's perhaps a better way of saying I like to be a nice guy. Right, right. Is that, you know, I wanted, I want to do right by you so that you do right by me. And so there have, you know, I mean, there have been those over the years where, and sometimes years later those bills get paid. And sometimes. Yeah, but I have had it where the company will say, look, you know, it'll be six months after we've ever heard from them. You know, we've written off the debt and you know, I mean, internally, we write it off. We still send them, you know, monthly notices or whatever, but we don't actually, we're not counting, expect to get paid. And then suddenly, you know, we'll hear from them and they'll say, hey, okay, look, you know, we're starting to get our stuff back together here. I'd really like to make this right. You know, I'm just going to start paying you, you know, and, and, and a lot of times they just pay it off. And I. I've had a couple of companies say, look, I want to advertise again, but I want to get three months into this before, like, it's their idea to get to, you know, get on a payment schedule before they start incurring more debt.

That makes sense.

Yeah. That's great. Yeah.

Whatever works. Yeah. I think the key is, are you communicating? Are they working with you to come up with a solution, or is it just radio silence? You don't hear from them at all.

Yeah.

And I think the radio silence is the easiest.

I mean, it sucks, but. Okay, great.

We'd forget it.

We're not going to do it. Right.

Yeah.

Yeah.

And it's challenging. So, I mean, we'd love to hear, you know, about solutions you've come up with to ease, you know, the pain of sometimes getting paid. You know, jump up to the small business support group at BusinessShow Co Facebook, or use that email address. Feedbackusinessshow co. I knew I could get it right that time. You got it.

I think you got it right the first time. I just figured, you know, repetition's not a bad thing, right?

That's right.

BusinessShow co.

They'll remember that. Yeah. So, you know, send us some. Send us your tips, and we'll share them with everybody and make sure everybody gets paid in time.

There you go. Yeah, that's right. Thankfully, we don't owe you money. At least don't think we do.

We do.

Let us know. Yeah.

One way or another.

Live that charm life, folks.