Freddy D (00:01:36) – So let’s talk about that, because as independent contractors are also the face of a business. And if they’re not happy, they’re not really promoting the business. And in fact, it’s the opposite. They’re probably talking neutral at best of that particular business. So let’s talk about what did you do to get that turned around at that company.
Tyler Stillman (00:02:01) – Yes. So in terms of the contractors, what I didn’t really start initiating until around a year in to start treating them better because the owners were very steadfast in their approach. And I was completely brand new to the accounting world. But then I started growing a backbone, and I created a document to at least put into writing how we should treat our contractors.
Freddy D (00:02:35) – I think that’s important. I don’t think that having that organized and put into a process, a systemized process is very important, because otherwise you’re just winging it and winging it doesn’t work in the long time.
Freddy D (00:02:53) – In the long game, I should say. Right?
Tyler Stillman (00:02:55) – Also, word gets around because these are very specialized contractors. Word gets around in their community that you aren’t doing good by them. So one of the very first things that I needed to realize to make their lives better is to give them a little income. Basically, if something is out of everyone’s control, the way that the company used to do it is that the contractor would take the hit.
Freddy D (00:03:27) – That’s a short view of of the business, because you’re not creating superfans out of those contractors. More importantly, you’ve got the mindset that you’re doing them a favor versus them helping build your business.
Tyler Stillman (00:03:42) – Exactly. And when I realized that, I realized we need to give these contractors a little grace.
Freddy D (00:03:53) – That’s huge, because these people are going wonder contributing to the business, because if you didn’t have these particular contractors providing the services that they provide because of their uniqueness, that business is out of business. Exactly. So the contractors is really the front of the business and is the business.
Freddy D (00:04:16) – So they should be number one in the business eyes as we got to take care of our our team, because no team, no business, especially in that type of a business, which is language communications. Yes.
Tyler Stillman (00:04:31) – Very much beforehand. It was always company first, contractors second. The viewpoint was we would always try to pay ourselves before we paid them. And I realized for half a year or two, a year after I created the documents, that things needed to change even more. They needed because the documents were a step in the right direction. But then we needed to actually make even more changes.
Freddy D (00:05:05) – And what were some of those changes? What were outcomes of the implementing those changes?
Tyler Stillman (00:05:11) – One of the very first things that we did was we started to pay the interpreters more. Okay. Originally started it originally started out in a weird way where we would pay them a month after the assignment, essentially. Okay. So essentially you do the first two weeks of the month, you’ll get paid in the first week of the next month, that kind of thing.
Tyler Stillman (00:05:36) – And while people enjoyed getting paid more, but there were still contractors that we didn’t use often that were still waiting a month to get paid.
Freddy D (00:05:46) – That’s a long time when, you know, especially independent contractors. A few hundred dollars in today’s economy is really important. Absolutely. So how did you start converting these guys into superfans of you and the services that you’re providing to those contractors? And in turn, changing the bottom line for that company?
Tyler Stillman (00:06:10) – I became much more involved and talked to the interpreters myself. I subsequently also started to do some tech stuff to actually get in the field with interpreters. One of the very last things that I did for the company before I left was I went to a interpretation function and actually got to see interpretation being done live. Okay.
Freddy D (00:06:39) – So you started building relationships with those contractors that started to build trust in and you and being able to take care of them. And so in turn, they became superfans of not necessarily the company but a view because you had their back.
Tyler Stillman (00:06:57) – Yes.
Tyler Stillman (00:06:58) – And I always made sure to let the.
Freddy D (00:07:00) – Independent contractors.
Tyler Stillman (00:07:02) – Know. I know that things were done differently in the past, but I am stopping the bad stuff now. Going forward, I have your back. I’m doing my best for you.
Freddy D (00:07:14) – That made a big transformation into how the contractors related to you, and started transforming the image the contractors had about the company, because now the company was more pro contractors and making and had the minds and the mindset was changing that. This is our front line. We need to take care of the front line versus be grateful we’re giving you a job.
Tyler Stillman (00:07:40) – Exactly. And very much that improved our bottom line because we had more people willing to do work, and we had more people that wanted to do work with us.
Freddy D (00:07:51) – That’s huge right there. That’s monster. Because again, they’re independent contractors, so they don’t have to work for that particular company because they can sell their services to anybody else. But if you start treating them like you did with respect and appreciation when they get to calls, and this is company A and this is your company, they’re going to say, you know what? Tyler takes care of me.
Freddy D (00:08:17) – He’s got my back. I’m going to do Tyler. I’m going to go for the project that his company is requesting.
Tyler Stillman (00:08:22) – Yes. And one thing I actually did realize after we made the change in pay is we needed to be better. We needed to break the mold of the type of business we was it? I decided, you know what? These contractors need to be paid employees. And that affected our bottom line for a little bit, because when I decided that we needed to make this change, I made it pretty much immediately with the approval of my manager, of course. Sure.
Freddy D (00:08:55) – And how was that received by these independent contractors?
Tyler Stillman (00:09:00) – We had an independent contractor actually leave us when she found out she would have to wait a month for her. I got in contact with her saying, hey, we actually changed everything. Would you be willing to come back to us? She said, yes, of course I would. Essentially, you’re treating me like a human now. And so she came back to work with us.
Freddy D (00:09:19) – That’s important. So kudos to you for bringing back an independent contractor back to that company. It’s right because employees were paid bi weekly. But you had these independent contractors that are dependent upon being paid timely because again, they’re not getting a salary. They’re getting hourly wage. But for assignment it’s paramount that they get paid timely. Exactly.
Tyler Stillman (00:09:45) – And of course, along with that I made a few minor changes, like just changing it, everyone to be paid at a minimum of two hours, even if their previous stuff was an hour minimum for on site stuff, and everyone started getting happier with the company, they started.
Freddy D (00:10:04) – Changing the culture of the independent contractor. In the sense that you were turning them into superfans for the company, because now the company was in turn respecting them and showing appreciation and gratitude by, at a minimum, paying them timely on a regular basis and creating a regular basis for the payments.
Tyler Stillman (00:10:26) – Absolutely.
Freddy D (00:10:27) – So how did that affect the bottom line of the company? Let’s talk about that. Those payments to those independent contractors affect the bottom line compared to when you started working with that company.
Freddy D (00:10:40) – Where was the bottom line?
Tyler Stillman (00:10:41) – When I started working at the company, the bottom line was through the floor. We had really bad years the prior like three years.
Freddy D (00:10:51) – Negative income, not positive income. Yes.
Tyler Stillman (00:10:55) – Okay. When we started making these changes with our workforce, our contractors, one of the very first noticeable changes was one. You’re getting more assignments done. So more assignments meant more money and more money meant more profit and more profit means went straight up.
Freddy D (00:11:15) – So let me rephrase that in a sense that. Because now that you started paying the contractors on a regular basis, the contractors were more willing to do assignments versus saying, I know I’m not available. And whatever the excuses that they had to say, yeah, I’m willing to do this. And the company was able to fulfill more assignments, which in turn started to affect the bottom line from a negative net income to in the time that you were there, to becoming a positive net income.
Tyler Stillman (00:11:48) – Absolutely. Okay.
Freddy D (00:11:51) – Now, what are the other things that you did that you found in the books that also affected the income because of the fact that things were not properly categorized?
Tyler Stillman (00:12:03) – Yes.
Tyler Stillman (00:12:03) – So stuff wasn’t properly categorized. Stuff wasn’t properly done in the proper months. So basically we were working on information that was false during 2022 2023. I made the decision to go through the books and change as much as I could, to be more accurate to the proper timeline.
Freddy D (00:12:30) – So by doing that, that also revealed what the company was really doing in revenue. In some cases it was negative. But overall, once it got fixed, that the efforts that you put in to fix the books, that’s when all of a sudden you could tell and track the income starting to go up because of the fact of the things that you put into place, the relationships you were building with the contractors and more importantly, having accurate data. And so how important is accurate data and tracking that?
Tyler Stillman (00:13:05) – Oh, goodness, accurate data is very important. Essentially, you want the books to tell a story. And when I got in there, the books were were a choose your own adventure book backwards.
Freddy D (00:13:23) – Okay.
Tyler Stillman (00:13:23) – Essentially. And basically I went in and edited the books.
Freddy D (00:13:29) – Okay. So talk about that. So what were some of the things that you did as an accounting consultant? What are some of the things that you found? You don’t have to get into all the details, but what are some of the things that you found that were mis categorized that a small business may do because they don’t know any better? And that in turn affects their bottom line, their financial statements and everything else. And what is it that you would do or recommend a small business to do to make sure that their financials are properly classified?
Tyler Stillman (00:14:02) – I would review mostly invoices and bills. One of the main sticking points that I found when doing my review process was this bill. It was dated say that Muri 15 or something that was done back in January. Basically a simple way to fix that so that it could be categorized properly, is to change the date of the invoice to be in January, while also keeping the original due date for the invoice.
Freddy D (00:14:41) – So Tyler told us how a small or entrepreneur type business can make sure that their books are correct because and provide a clear picture of where their business is at.
Tyler Stillman (00:14:54) – When I was fixing the books for this company, one of the major things that I found was that 80 to 90% of the problems were in invoices and billing, mostly with having to do with dates.
Speaker 3 (00:15:11) – So.
Freddy D (00:15:13) – So help us understand dates. I don’t get it. What? What’s so important about dates?
Tyler Stillman (00:15:18) – So when especially in accrual basis, which is how you track how your business is doing, one of the major things is if you accrue your income in January, what you’re say accounting software recognizes the income being done in February. That’s not being accurate to what you realistically got. The revenue are the things that you can do is backdate and invoice.
Freddy D (00:15:47) – Okay, and talk more about that. And how does that impact the books?
Tyler Stillman (00:15:52) – Basically, let’s say that you have $1,000 invoice that you originally recognized in February. Okay. Or income that was generated in. By backdating the invoice. What you accomplish is you recognize that income in January rather than February. What that does is helps with the accuracy of your business.
Tyler Stillman (00:16:19) – It helps you recognize this is when I gained this revenue. This is when I gained this bill. This is when I gained everything all in the same month.
Freddy D (00:16:29) – So in turn, properly invoicing and making sure that the dates match when the service was provided, the books are going to present a much more accurate picture of where the business is at, where it’s going, and that can have a profound impact for the business, knowing that the data is accurate and then it gives them an idea of, okay, I’m doing really good, or wow, I need to make some changes because I’m going in the wrong direction.
Tyler Stillman (00:16:58) – Absolutely.
Freddy D (00:16:58) – Let’s discuss other things that you did to turn that company from a negative income to a positive net income.
Tyler Stillman (00:17:06) – Another thing that I did was get to know our customers, at the very least their accounting departments. One one of the major things that the company wasn’t doing correctly was collections.
Freddy D (00:17:20) – Did they have any invoices that were beyond 3060 days?
Tyler Stillman (00:17:25) – They had many invoices.
Freddy D (00:17:26) – So how far what was the furthest one that was out there?
Tyler Stillman (00:17:30) – I think that there was when I joined 1 or 22.
Freddy D (00:17:33) – Wow. So you’re talking several years?
Tyler Stillman (00:17:35) – Yes. How do you rectify that? Unfortunately, the reality of the situation is if it is 90 days or over, you’re most likely not getting that money. It is entirely possible that you can, but a lot changes in a year to begin with, not to mention three years. You need to thoroughly examine your art and determine what’s collectible, what’s not, and then you just need to write it off. Because if you’re not going, if a lot of stuff over 90 days is uncollectible, not to mention stuff over three years old, you don’t want to carry that. You don’t want to carry that weight.
Freddy D (00:18:17) – So from a tax basis, it probably would be better off to just write off the stuff that it’s okay. Anything beyond, let’s just say six months and there’s no chance of getting collections. After you’ve reached out to the company, sent letters and everything else, you’re probably better off from a tax perspective to write that as bad debt.
Tyler Stillman (00:18:37) – Absolutely.
Freddy D (00:18:38) – So that in turn makes your books look better?
Tyler Stillman (00:18:40) – Yeah, absolutely.
Freddy D (00:18:42) – Not immediately, but over time that clears them up, I would think. Yeah.
Tyler Stillman (00:18:48) – The main issue is essentially you have a blemish and you’re not getting rid get rid of the blemishes.
Freddy D (00:18:55) – So what would be a cutoff time for a small business to say, okay, this isn’t going to go on. Would you say six months is a fair number.
Tyler Stillman (00:19:02) – Yeah, absolutely. Of course it is on a case by case basis because you can have some customers that that are contractually obligated that are still paying different stuff. They can pay this one. It’s just that they haven’t gone through their processes properly. So it depends. But six months is a good cutoff okay.
Freddy D (00:19:23) – Now let’s go back to creating superfans from customers. How does that how does accounting play into that role.
Tyler Stillman (00:19:34) – Like I said, with contractors need to be willing to extend a little grace to your customers as well. Everyone you are dealing with is human and they make mistakes. You need to be willing to let late fees go away, and you need to be willing to let bygones be bygones.
Tyler Stillman (00:19:52) – What that in turn does is it shows that your company is willing to work with the custom.
Freddy D (00:20:01) – Right? That’s the important statement right there, because customers can have things come up unexpectedly, issues that they’ve got, and they get sidetracked. And the fact that you’re willing to work with them because you understand their business and you have as a business have things that come up. So the fact that you’re willing to work with them creates a partnership, which in turn leads them to start becoming a brand advocate, or as I call them, business superfans. These guys are okay. They’re willing to work with us while we’re going through this challenge. They start telling other businesses that this is a great company and you should deal with this company, and that’s how you start getting word of mouth going.
Tyler Stillman (00:20:46) – Yes, basically every single department needs to work together to give the customer the best experience. That includes the accounting department.
Freddy D (00:20:56) – It’s the same thing with the contractors. If the contractors being well taken care of and are being paid timely as we talked earlier.
Freddy D (00:21:03) – They start telling other contractors within that industry that, hey, this is a great company. They they really take care of us. And so that company starts attracting more contractors willing to provide their services for that particular company.
Tyler Stillman (00:21:20) – On that same thought, I do remember hearing a story of how we use specialized contractors. But even within those specialized contractors, there is a more like specialized version of those contracts and the more specialized contractors we treated the exact same way originally when those changes were made. One of the big things I remember hearing is, hey, you guys were originally in bad faith with these specialized contractors, but I’ve been advocating to let those to let everyone know that you have changed. There is new management and we are being treated properly now.
Freddy D (00:22:03) – And that’s huge because that that in turn is a super fan that’s starting to to get everybody else to change the mindset and their thoughts about that particular company. And so they start looking at being more open to dealing with that company. It’s the same thing with a contractor going to do a particular project, and they’re happy with the company.
Freddy D (00:22:26) – So they’re becoming a superfan saying, oh yes, I’m with this company. It’s a great company to provide a great service, and I’m excited. So now they’re promoting the company. So you’ve got the independent contractors becoming your sales force because they’re out there telling the client that they’re dealing with, oh yeah, I love the company a great company. And so now the client feels even better that they picked the right company to provide them the service. And it starts to snowball. And that’s what is, as you alluded to, is that changed the net income from a negative income to a much more positive income, which in turn changed the whole dynamics of the business?
Tyler Stillman (00:23:10) – Yes, absolutely.
Freddy D (00:23:11) – So, Tyler, we talked about how you change the contractors pay to in turn create them into superfans, which got them to be willing to do more projects for the company. More importantly, talk positively to customers, which then reinforced customers that they made the right decisions to request that company’s services. And you’ve also talked about building relationships with existing customers to turn them into superfans, in the sense that you’re willing to work with them through their challenges and being flexible.
Freddy D (00:23:44) – So how did this impact the overall bottom line for the company and what was where did that lead to?
Tyler Stillman (00:23:50) – So we ended up positioning the company in 2020 with a positive net income for the first time the year, which ended up positioning the company for sale in 2024, the company was bought and subsequently my job was done. We met our goals and so I have gone on to a new venture with a new company to help them.
Freddy D (00:24:17) – So that’s pretty powerful statement there that you basically, in a three year period, you turned around a company with negative income and to having positive income, which in turn positioned it to be bought by another company. That doesn’t happen every day. So that’s a great accomplishment on your part of being able to take a mess, in the sense, from what you described and turning it into something that was attractive to somebody else to acquire.
Tyler Stillman (00:24:46) – What can I say? I used to work as a janitor at a grocery store. I’m used to turning messes into attractiveness.
Freddy D (00:24:57) – That’s a great way to end the show, man.
Freddy D (00:24:59) – Tyler. Pleasure having you on the Business Super Fan podcast. Great advice to businesses. So to sum it up, basically a making sure that your invoices are properly invoiced and the dates paying attention to the billing. Same thing with billing, making sure that you’re billing timely. More importantly, making sure that if you’ve got contractors, you take care of them as part of your team because they are your team as well as your customers. Because no customers, no business, no team, no business. Tyler, thank you very much for being on the show, and we’ll look forward to having you on another episode down the road.
Tyler Stillman (00:25:39) – Hey, thank you for having me on.
