Kerry Cloyd - The Financial Edge of Roofing - PODCAST TRANSCRIPT

Editor's note: The following is the transcript of a live interview with Kerry Cloyd of ABC Supply. You can read the interview below or listen to the podcast.

Intro: Welcome to Roofing Road Trips, the podcast that takes you on a thrilling journey across the world of roofing. From fascinating interviews with roofing experts to on the road adventures, we'll uncover the stories, innovations and challenges that shape the rooftops over our heads. So fasten your seat belts and join us as we embark on this exciting Roofing Road Trip.

Karen Edwards: Hello and welcome to another episode of Roofing Road Trips from Roofer's Coffee Shop. My name is Karen Edwards, and today's episode we're going to be talking about finance and financial challenges that roofing contractors are facing in the roofing industry and all about what they should know to find success. Joining me today is Kerry Cloyd from ABC Supply. Kerry, welcome.

Kerry Cloyd: Hi. Thanks, Karen. Good to be here.

Karen Edwards: So could you just introduce yourself for those listening and tell us what your role is at ABC Supply?

Kerry Cloyd: Sure thing. My name is Kerry Cloyd. I've been at ABC Supply about 22 years now, working on my 23rd. My background is all in finance, so I've been a regional controller, I've been a controller here at the corporate office and my current role is Vice President of Customer Financial Services for ABC.

Karen Edwards: Wow. So you've got a long tenure at ABC Supply. You've seen a lot of changes over the years while you've been there, haven't you?

Kerry Cloyd: Yeah, certainly have. I moved here from Denver, Colorado. I was working out there. I've worked in Dallas before and through all the acquisitions that ABC's been through, I happen to be a product of one of those acquisitions and hopped on with ABC and couldn't be happier.

Karen Edwards: Excellent. Well, thanks for being here today to talk about this important topic. So often roofing contractor will get into business because he is a craftsman. He loves construction, working with hands, protecting homes and buildings from the elements, but they're not always experts on the finance side. Honestly, I have a business and I hate the financial side of it. I rather would just do what I want to do, and so many contractors have that. ABC Supply actually has credit and financial services that they offer and I want to know exactly what that entails. Why is it important for contractors?

Kerry Cloyd: Well, Karen, just like you said, a lot of our contractors do great work, but thriving as a contractor goes beyond doing great work and effective financial management is the key to their business growth. So managing finances can be overwhelming and complicated, just like you said, everybody kind of freaks out when it comes to the bookkeeping portion of their business. But whether you're just starting out or maybe you've been a contractor for a long time, that's where we come in. We can design tailored financial services and tools to address the unique challenges contractors face, trying to simplify that financial management so they can focus on what they do best.

Karen Edwards: So what are some financial challenges that you have seen contractors facing?

Kerry Cloyd: Oh, yeah. During this period of time, it's been kind of crazy. We went from doing pretty well and then COVID hit and that brought a whole new sector of customers and different financial tools. Now, we're post-COVID and seen a lot of difficulties with our contractors and collecting from their customers, the homeowners, the insurance companies and general contractors. Which slow collections for their customers means paying their suppliers slower and also can damage their employee relationship in making payroll. We've also seen it impact project timelines. Getting delayed payments can slow down the project and then everybody in the process can be impacted by it and they're not very happy with it, even though it's great work. And then of course, there's losing that competitive edge. Sometimes contractors miss out on great projects because they didn't have the access to the right financial tools to help support that project. Without reliable cash flow, taking on new jobs or expanding your business becomes much harder. So working with us can help out and get through these challenges.

Karen Edwards: Okay, so I'd like to know more specifics about what CFS does to help address some of these challenges that the contractors are facing. You're not picking up the phone and calling my people and saying, "Hey, you're late on your payment." Right? What does this service look like?

Kerry Cloyd: Well, a couple of different things we do. The biggest thing is we offer flexible credit lines, and we do that via job accounts. As our credit lines can grow with our contractors, aligning our terms with job completion and customer payments. Keep in mind a trade credit line isn't like an installment loan, the material has to be paid for within the payment terms that are set up, not over a period of years or time like you would do your car. But it's important to know that we'd like to set up what we call job accounts, those really increase the purchasing power for our contractors because it gives us an avenue to secure our interest in that job, both for ABC Supply and for the contractor themselves with the building owner or the GC. The other thing we offer is the lien services. Each state has mechanics, lien laws. It's a great tool for contractors to use to ensure they get paid for the great service and products that they supply to building owners, property owners, homeowners, et cetera.

So between our two teams, we can work together to secure both those interests. And then of course, is our online account management platform. It's one of the best in the business. You can go online on the myABCsupply app, you can download invoices directly into the software that you choose. You can also set up automatic payments so you don't miss a crucial deadline, and you can, of course, view invoices and statements 24 hours a day, seven days a week. So when you have time to get to it, you can take a look at your own finances and be a better businessperson looking into those activities that are going on.

Karen Edwards: So it's interesting, because it's sounds like your customizing this for each contractor, but yet another step is for each specific job.

Kerry Cloyd: Yes, that's correct. We do it for each specific job, and it can be a small, medium, large job. We can do these for any size job, for any size contractor.

Karen Edwards: Because when we go into the commercial realm, we're talking about sometimes some pretty high dollars and some pretty large projects, so it doesn't matter.

Kerry Cloyd: It doesn't matter. We know those projects can get intricate, they can get lengthy with delays. It's very important to communicate, make sure we have all of our ducks in a row to ensure the best products get up to that roof, on time with ABC's delivery promise and to make sure you can start your job off on the right foot, both with the supplies and the financial tools backing you.

Karen Edwards: What are some of the common mistakes that you've seen? Because you've been there a long time, you've been working in the financial side. What are some of those mistakes or pitfalls that contractors should avoid, and how does CFS and ABC Supply help them steer clear of these?

Kerry Cloyd: The biggest thing is staying silent. It's great to have a relationship with your supplier to ensure things that are going on so that when you run into these pitfalls, we can easily work together to overcome them. That's probably the biggest thing, is getting your relationships all squared away with both your suppliers and your lending institution. I sometimes see contractors don't want to go that route with a line of credit with a bank, but it's a great backer towards their financial health when they have a backup plan and have that in place and ready to go. The other thing is being transparent with your supplier about what's going on in your business so we can ensure that we both have a good understanding of your cashflow. Another thing I see is have an accounting system in place. Don't just be fly by the night.

Get something in place, if it's QuickBooks, if it's Peachtree, there's all sorts of various softwares out there that you can utilize. Be sure to have an accounting system in place to manage that cash flow so you can have insight into your business of what's upcoming and what pitfalls you might want to see. And then of course, have someone on your team that's willing to make those hard calls and collect from your customer, from that homeowner, from that property owner and make sure you have that lined up to have assistance in collecting from those folks.

Karen Edwards: Yeah, that's the hard thing, right, one is being transparent and being honest, because sometimes things happen in business and it might not be your fault, it might be extenuating circumstances. But it's good to know that ABC Supply, when you have that relationship that you're willing to work things out and say, "Okay, well, let's look at the account. Let's look at the project and let's see what adjustments we can make." Because your goal is to make it easy for everybody involved, right?

Kerry Cloyd: Correct. That's correct. Yeah, being transparent in communicating with us is the biggest help that a contractor can find.

Karen Edwards: Okay. I want to talk a little bit, we just touched on there's a lot of differences between a residential roofing replacement versus a large-scale project that has building owners, maybe general contractors involved. How does CFS help contractors manage this? Because a lot of times those large-scale projects their contracts spell out this payment doesn't come until this date, or when this timeline or milestone is reached. So how do you work with the contractors to help coordinate all of that and make sure everything works out?

Kerry Cloyd: Right. Again, that's where those job accounts come in, that we can have flexible credit lines and tailor the terms of our agreement along with that contract that our customer, the contractor, has signed. We want to make sure that we help them out what they understand when their cash flow is arriving so everybody understands when they can get paid. That's one of the ways we do it. Also, we have a lot of regional expertise, people that are out in that marketplace, what's happening in your region, whether it's a storm, maybe you're getting a new construction boom or just some regular repair work. We have that regional expertise to know what's happening in your local areas. And then, we just provide support for any size business, whether you're just starting out and running your operation or you maybe you've been in business for quite a while and you want to expand in different product groups. That's where, again, that communication is key, letting us know what your plans are so we can tailor the terms and the credit line to fit what you have upcoming.

Karen Edwards: You mentioned regional. Are there folks out in the field in the branches that, because this program from ABC Supply, the CFS program, how does it look on a local level? Is that I just call up my local rep and say, "Hey, I want to talk to you about this service?"

Kerry Cloyd: You sure do. You start with your salesman that's right there on the ground with you that's there to support you, and he can call one of our many credit analysts to start analyzing the details and looking at those contracts that you're thinking of bidding on or you're thinking of quoting to make sure that we can align our terms and our credit agreements with that particular project coming up. So it starts on that local level with your salesman and your branch manager, and then they have a suite of products that are available to them. And then as it gets more complicated, we can bring in more of those financial, what you guys would probably call accounting nerds, into the business to see what happens.

Karen Edwards: Definitely. But wow, this is pretty impactful and powerful support because the dangling carrot of, "Ooh, look at this big project I could bid on," It might not be the right one and you have resources and people that can say that, "This isn't something that you should probably go after right now. This is going to be your sweet spot." I think the best part is, you're doing all of this at no cost to the contractor, right?

Kerry Cloyd: That's correct. We don't charge an extra fee or an extra financing fee for any of that type of work. [inaudible 00:13:07]. Pay on time, and we're good to go.

Karen Edwards: Yeah. And it's really great that you have this resource because as a contractor, you are running your business day to day, sometimes you feel like you're on an island. I'm out here all by myself, I don't have anybody to talk to. I need to ask a question, and you're right there, right in their backyard.

Kerry Cloyd: Yeah, right in their backyard. We also provide awesome support from our national support center here in Beloit, Wisconsin. So we have a team of people here ready to go, ready to back up at any time for those local needs.

Karen Edwards: Excellent. Do you have any success stories that you might be willing to share?

Kerry Cloyd: Gosh, I can't probably single out just one, but we have a lot of success stories with our job account program. We find that, although we have a great relationship with our customer, they go bid a new project, maybe they don't know that GC. Maybe nobody's heard of them. Maybe nobody's known that property owner. Although we have a great relationship between the contractor and ourselves, we don't know some of the other people involved. So we work together to protect those interests in that job and then it works out for us to get paid faster. So again, we're first and we're most organized at going to the job site, so that helps the contractor get paid on time and within that draw schedule or even earlier.

Karen Edwards: Yeah, I like that. It's really a team effort, I think, because it trickles down the line from the building owner, to the GC, to the contractor, to the material supplier. Everybody is running a business and everybody needs to ensure that the work is and that the payments are made and that the materials are available and this is just taking that and helping it run smoother. What does it look like for a contractor who logs online or maybe is using the app and they want to check on the progress of a job? Are they getting real-time insight into where things stand? Is it a daily update or are we talking real-time anytime day or night?

Kerry Cloyd: Well, day or night, of course. Our platform provides, I know you've had some of my colleagues on a talk about my platform and where their deliveries are at, but by putting those in job accounts, you can see when we've shipped to that job site so that you can start tracking how much has been shipped to that job site, so you're aware of what's happening within there.

Karen Edwards: Okay.

Kerry Cloyd: And we set the terms so that we can make sure to get paid before any deadlines hit that we don't want to cross.

Karen Edwards: Excellent. Yeah. How does a contractor get started?

Kerry Cloyd: That first thing, fill out a credit application with ABC Supply if you haven't yet so we have it open on our website or you can call a local branch. They'll get you hooked up with a local salesman and you guys can fill those applications out together. We have an online platform that we have customers fill out our credit application for. And then once you get started, that local rep will get us going and get your needs met and then we'll expand the business from there.

Karen Edwards: I think it's just such an invaluable service, like we said at the beginning of the conversation, contractors are great at doing what they do, but not everybody has a handle on that financial part and that can be intimidating. It's really nice that you guys are there, you provide that support and you provide that service at no charge.

Kerry Cloyd: Right.

Karen Edwards: Yeah. Wow, Kerry, this has been a really great conversation. I want to thank you for being here today. It was a pleasure talking about this.

Kerry Cloyd: Yeah. Awesome. Thank you very much. I love an opportunity to talk about finance anytime.

Karen Edwards: Yeah. This was a little bit different from our usual topic, so I want to thank everybody out there for listening. If you're not taking advantage of CFS from ABC Supply, you really need to talk to your rep about that and check it out, because it could be game-changing for your business, I think, Kerry. Thank you.

Kerry Cloyd: Yes, sure can. Thank you very much.

Karen Edwards: And thank you everybody out there for listening to this episode. Be sure to subscribe, follow us, because we don't want you to miss a thing. We hope to see you on a future episode of Roofing Road Trips. Thanks. Bye-bye.

Outro: If you've enjoyed the ride, don't forget to hit that subscribe button and join us on every roofing adventure. Make sure to visit Rooferscoffeeshop.com to learn more. Thanks for tuning in, and we'll catch you on the next Roofing Road trip.