Wake up, Buy Here, Pay Here people. It's a beautiful day. Go grab yourself another cup of joe and say hello to Jim and Michelle Rhodes on the Buy Here, Pay Here morning show. Take it away, you two. I'm here. Hello, hello, hello. Good morning. Good morning, y'all. Good Wednesday. Welcome to Wednesday. White hat Wednesday. Yeah. Time to start another day. Yesterday was pretty intense. You know, it was. Jim, those of you who know Jim, know that he's usually, usually like really... Even. Even. Even. And he was a little cranky yesterday. I had some stuff that I was dealing with. And, you know, I don't see him cranky very often. So, yeah. And, you know, Jim, show your cranky face. Looks like this. Okay, show your happy face. This is it. You don't recognize it? Unless you're around him all the time, you wouldn't know. By the end of the day, he had a really, really great meeting with one of the V8 groups, the bigger dealers. By the time he came upstairs, whatever it was that happened during that meeting, he was like, yeah, life is good. Oh, it was a fantastic meeting. We had really great participation. We, you know, we're kind of turning the corner on some of the important data elements of the V8 stuff. And so, yeah, part of what happened last night is, you know, we had just really great discussion. Good group. Everybody enjoyed the meeting. And these are seasoned people. dealers these are yeah these are the ones yeah the larger group yeah they run with like 500 to 2 000 accounts it's kind of that group size but um but yeah it was it was good discussion and it was um It kind of prompted some of the conversation that we're going to have to hear today. But I think before we get into all that, we wanted to have a chance to talk about some of the upcoming events. Okay. Okay. Shall we? Yes. Upcoming events. Yeah. So we got some topics. I mean, one thing I've reached out to... the um incoming uh president of nieda so asked about having uh him appear yeah we had gordy on the show on monday yeah and so um asking for the who would be the incoming president um yeah to come so we're gonna um we're gonna ask them to appear hopefully it works out for them to be with us between now and uh monday there's a really important vote there is a really important vote And there seems to be a lot of controversy. And I think we're going to invite people to be there. We're going to encourage people that are at the event at the conference to attend that particular session. I believe it's at four o'clock on Monday. Yeah, so if you're going to be around Monday, isn't Monday night they have the cocktail hour and stuff in the evening? I think so. Yeah, I haven't really studied that part. Yeah, so this is not something that normally you would say, be there. for this, it has a chance to be historic. It really does. Every indication is that it's going to be historic. So if you're going to be in town, be there. Um, and you know, we, uh, you can see how the machine works. Uh huh. Like here we've got an association that's been around 75 plus years. Um, a lot of what happens to use Gordy's expression on the, the morning show on Monday, like a lot of what happens in that session will not be sexy. Um, But then it's just kind of the working, the business of the association, right? But then there will be a vote. And so it'll be a different thing. And I think it'd be important for us all to be kind of there to observe how the thing works. We've heard some different ideas about how the vote actually happens. And some have said it's an individual. People that are there get to vote. And then others have said that it's more like the electoral college. Yeah, so that like the associations have so many votes. And then they get to vote on that. And until we get that sorted out, let's just be there. As a member, you may be able to cast a vote. We're not 100% sure. Well, and do you want to discuss why? Not much detail. I would just say people can get out there and learn and we may share more. I would rather wait and see if there's just some stuff around this vote that that it really would be good as part of the association that you're aware and and. Yeah, that we can that we can move forward because I may talk more specifically about it between now and Monday. But I'm just saying for today, it's not it's not about the controversy as much as it is the process. So we just want people to be there and be informed and be aware they can they can. you know, find information on the controversy probably elsewhere. This is, you know, it's a matter of public information. Well, it was interesting when you were mentioning that at your meeting last night, the V8, that one of the dealers brought it up. Oh, true. And that more than half, were not aware at all of what was going on and so it's always it's always important as association members um to stay kind of in the know as best as you can but some of the stuff that's going on is is not so much news of the association as it is just stuff that's going on um individually so it kind of goes back to the thing you know um When did we do our appendix I? This thing about integrity. It was a couple weeks ago. The subject is really not about these individuals. It's really about governance of the association, how you want to be represented as a body, as our dealer members that are listening. How do you want to be represented as a body? This is really not about individuals. When you say appendix I, the I stands for integrity. Integrity. And yeah, among other things. And so, you know, we have, I don't know for sure if all of the governmental agencies will be there during that, but they certainly will hear about it. Yeah, I would think, I would think. And so, yeah, this is part of what the dealer brought up last night in our meeting was like, he just asked for a moment to address the group before we adjourned. And, and so it was interesting. And to see the reaction of the folks who, you know, when the story was related about what was going on there and, that the immediate reaction of many of the dealers who just were hearing it for the first time had an immediate reaction. And so I think it's important. Again, I don't think it's really appropriate for us on the morning show to really... Just to educate yourself. And so, yeah, I'm not exactly sure where you would go to find out what's, you know... Well, they can reach out to us. I can share what we know, but I just don't feel like this format is really the right place to discuss it in any kind of detail. But I would just say that for us as, you know, the founders of White Hat Way and everything that White Hat Way represents, you know, integrity, trust, transparency, you know, we're we're, we're mindful of the fact that there are human beings involved here. We're not trying to, it's interesting that Gordy, it's, I hear more and more and Gordy used it a few different times and I've heard it more and more. And, and I, and I, I want to think that it's because we kind of brought up the word and making and are making it a thing, but the word transparency. Right. has become a real, it's like, it's a core thing, is we want to be transparent. And I really, really appreciate that. I'm wondering though, if there is, you know, something that could be added, you know, we've talked about appendix I, but, you know, we've talked so many times about optics. Right. And how another person's perception is our reality. Right. When it comes to like a perception of us, perception of whatever is our reality. And so I'm wondering if we should add something into there. It's like being aware as well. And, you know, yeah, being aware of what the optics are. Sure. And to be clear, you know, in the conversation with Gordy, what we we chatted with him on the morning show Monday, you can find that episode if you missed it. And so he was able to to and we didn't talk specifically about any of this stuff as much as just this idea that there was a vote that was going to be occurring on on Monday. And it was in the context of his. Transitioning, obviously, his role as the president is coming to an end. Traditionally, that changes over at the convention, and the new person gets confirmed, if that's what they call it. But that's kind of what was kind of the crux of the thing, as he shared there. But we just think folks ought to be at this. If you're there, be there. Yeah, be at this session. I'm inclined to do a calendar invite and make sure people know where it is and those people that we know that are going to be there, the dealers in particular that we know are members. And I suppose your vendors are members as well in a different, at a different level, perhaps. But, but. Well, we'll be there as vendor members. That's true. Yeah, we're vendor members. And we're members of the Texas Association. Yes. It's kind of where we're, where we made entry, if you will. We made entry. It's kind of like a cell phone number. Is it just because the cell phone number prefix says whatever, it doesn't mean that's actually where you live? Oh, good point. That's a good analogy. That's right. So. So anyway, we just think it's important. It's something that's potentially very impactful. And we'll do what we can to keep folks informed. In the meantime, just be aware that you can be there. And so that's going to be at 4 p.m. on Monday. And then another thing that's happening at the conference, and I may butcher this, and I sent Gordie a text message in the afternoon. He, he answered the first part and I followed it up. Um, the fellowship of Christian dealers, when they did something last year and they had a musician come, well, this time they have a comic coming and, um, we've seen this comic and I'm pretty sure it's the, the one that we were like, okay, I think it was this cause we watched dry bar comedy. a lot and dry bar comedy is comedy hilarious comedy without um a lot of the the cussing and and you know suggestive stuff as much and so it's pretty clean and it's fun and it's funny and and so the comic that's coming is from that arena and he has been on dry bar and I what did we say it was I think it's Jeff Allen. Jeff Allen. Yeah. So I'm saying that from memory. Yeah. And so it's free. I mean, normally if you went to go see Jeff Allen, you'd be paying a ticket to get in. And this is something that's being done by, like I said, fellowship of Christian dealers. Um, and so it's just, it's hosted. And so if you like comedy and you don't, you know, you're not really wanting to, uh, hear vulgarity or whatever. Um, Uh, that it would be a really great option. It's at 8 PM on Tuesday and I'm not exactly sure where, but it's at 8 PM on Tuesday. You can reach out to us or, or reach out to Gordy or, or, um, I think that, uh, our founding sponsor, um, is, uh, Tim bird. And, uh, I don't know if it's just Tim or dealer are either also part of, of, I know he was involved last year and I suspect he is again, but yeah, Yeah, and for those of you who prefer vulgarity, I'm sure you can find it in Vegas. Oh my gosh, Absinthe. You have to go to see that in front of Caesar's Palace. Okay. Yeah, I've not seen it, but I have heard so many things. It's like, it's so bad, but it is so funny. But come to, you know, everyone's always looking for something fun to do in the evening. And this is, it's being hosted. So you should come. What else do we have before we... I'm inclined on Friday, we'll see if we can bring a couple of guests together. I'm inclined to bring together this topic around dealers and their service department wrestling with this balance between customer repairs versus their own recon. It's a really interesting paradigm thing they have to figure out. And so there's a lot to talk about there. I think it'd be better if we could get a couple of dealers lined up to come and kind of add their two cents. So we'll see if we can bring that together. But just look for that as an upcoming topic. I'm just kind of saving space for, you know, we've got some other guests that we've extended an invitation to, and if they're available Friday, we'll bring them back here on Friday. But otherwise, we'll take on that subject. Yeah, and that's something I've been seeing on one of our friends, Vic Everett, out of Southern California. um, he asked a question and, and, um, and it was, it was interesting cause it was interesting to see people weigh in on that. And we do have some experience and we've, you know, worked with all size dealerships and, and, um, and it's, you know, it's an interesting, it's an interesting topic to cover. And Vic is relatively new to the, to the arena too. And so, um, So it'll be good learning experience. But I think, yeah, we worked with a dealer sometime last year. I made a recommendation to a dealer who was wrestling with that and made a recommendation, which they followed. And he said, it's been one of the best things we've done. Our tech team is thrilled about it. So I check in with him and get an update and see if that pivot has made a difference for them still and see if they still like being in that position. So we'll see. We'll talk about it. Yeah. And there's a lot of reasons why the tech team was so thrilled about it. Yeah, for sure. Yep. Okay, so the subject of the day. This is a recurring topic. Well, and this subject came up. It is a recurring topic, and it was part of the reason why Jim was in such a bad mood yesterday. And so we talked about that at the beginning of the show. Jim was in a really cruddy mood. Yeah. And, and, you know, he came upstairs and was like, what's going on? And, and kind of described some of the things that are going on. And so, and it was around DMSs. Yeah, and maybe it helps to tie it together. Like one of the things we're doing in V8, because we had a V8 meeting last night, so that meant kind of an intense day of last minute preparation and identifying any mistakes and getting the report ready for the meeting. And it's so frustrating to work with some of the DMS systems Um, and I just, man, I've been talking about this. I share with you this morning, like we go back and find the video. I will absolutely find the video and share it. It's been about five years ago that I went out there on YouTube. This is before we had the podcast. And I just said, this is crazy that, you know, back then it was probably 2019. Did you find, you didn't find the recording. Okay. Cause yeah. Yeah. Cause it was, it was something that you were like, uh, this it's, it's redonkulous. Yeah. Is that even a word? It is a word because I just used it. And the funny thing is that the topic came up from yesterday because you were trying to get to what number? Oh, it's the same number we're always chasing, which is to reconcile receivables, the principal balance on receivables. It doesn't matter if you're a lease here, pay here, buy here, pay here. Like this is something that, so I'm going to recount the story. I'm not going to name the name of the provider, but I'm just the, I've had enough. Like I'm just frustrated and I'm, and my frustration is on behalf of dealers. I'm going to show you a slide in a minute. It's going to show you these portfolios that these dealers work with and being off by one or 2% doesn't sound like much. It's a huge. Huge amount when you're a big dealer. And it's like these numbers that I'm going to show you are better than where we started. When we started doing V8 back in January, a lot of the dealers that were coming in there, you know, we're asking for this and this and they're bringing, they're sending me the numbers and that doesn't balance. That's nowhere close. And so it's this, it's lack of familiarity on their side or amongst their team, right. Of what to do. And then we just had an experience with one of the DMS providers that was just I mean, it just is. And it's one of these things that, you know, I just get pissed off about this stuff on behalf of dealers. Because if I was talking about this five years ago, and I made the request of people, you know, five years ago, and here we are in 2024, and we're still dealing with some old. You can't get to it. Okay. Yeah. Yeah. With some, it's not in the standard reports. Yeah. To reconcile receivables to the principal balance. And what bigger asset does a buy here, pay here dealership have in their business? Than their portfolio? Than their portfolio contracts. I mean, I'm just telling you. That was a rhetorical, right? I mean, it's the largest asset in their company, and they can't tell you. If it's off by $200,000, they can't tell you where and why. It's like we've got to bring that to an end. And we do understand because there's been – dealers out there I mean there's everyone has their own business model but there are some things that really should be standardized in the industry and when I say should I use that knowingly because jim's like no one we should we strongly strongly advise it's that there are some things that should be standardized and one of those things is you know how you enter certain portions of, um, of, uh, data that's coming into your, your dealership and, and, um, and the reporting too, is that there, there really should be, any dealer should be able to at the first of the month run this report and you're going to get such a, a great look in a simple way to the health of your portfolio. Right. Boom. Yep. And, and I can say that with some of our clients that we've been working with, it took time with some of them. Um, depending on the DMS. But with some of them, we're able to now reconcile it to the penny. We're able to find the reports, identify which report produces which column of data. And now when we have all the right data, we can say, okay, started here, ended here. Here's all the points in between. And that's just, I'm not going to let this go. It's like, so I'm going to email everybody. They walk in the door at 8 a.m. on the first, they should be able to produce this report and have it on their desk, like bam. And so when we asked the DMS provider, you know, one, we couldn't produce it. And this is like, this is like a CFO and myself with direct experience with this DMS and we cannot get there. And it's like, we asked, we reach out to the DMS and we exchanged some emails back and forth and they say, well, yeah, that we can do a custom quote for you. We can quote. They want to charge you. They want to charge me to produce the most basic report that any DMS should produce. Yeah. And so they want to charge me, which I'm just asking on behalf of the dealers that we can prepare a quote for you, Jim. And I said, well, I'm not interested in a quote. Can we maybe you can do a training for us? Yeah. Oh, absolutely. We'll do a training. So I shot back to them. I said. OK, now I don't require any training on reports. I'm quite familiar with how to do reports. So let me ask you this. Can this training session be recorded? One and two, will it result with you showing us how to reconcile? Like, will we be able to balance the principal outstanding at the beginning of a period? In this case, we're working with a calendar month beginning to an ending period. No on both accounts. One, no, the session will not be recorded and we won't allow you to record it. So, wow. Right. Training. Wow. Training. Then they come back and say, so I ask them, tell you what, let's do this. Why don't you give the time that you were going to give the training and just prepare an email for us. Give us instructions on how to, and let's pick this dealer with this month. And you tell us what reports to run, how we're going to reconcile. I haven't heard from him yet. And you better believe I'm going to be waiting impatiently to see those instructions. Well, I don't know if y'all are like observing this, but as Jim's talking about this, this is the irritated person that I experienced yesterday. It's like, oh, you're snappy. Yeah, and I'm just... It's just like when I can do this kind of thing on behalf of dealers, I'm happy to go out there. that we work on so that they can see in a very, you know, just run a report. There's your thing. Make sure that your office manager or whatever has this on your desk the first of the month. And guess what? I'm not paying for it. I'm not. I'm asking on behalf of dealers, I'm going to suggest that, that folks produce this, I'm also be asking them to make it called a white hat way. Receivables summary report, receivables, reconciliation report, whatever. Like it's the idea is I want people to know if I run this white hat way report, this is what it's going to look like. And I don't need to be paid for it. I'm not going to pay people to produce it. What I am going to do is when a DMS provider creates it, I'm going to invite them to the show. And we're going to come in here and we're going to show how theirs works and help dealers understand why it matters. So I'm going to do that today. We'll start that conversation today. So this stuff matters because you're talking about, um, and this one system, by the way, they have GL accounting. So what an accounting person, general ledger accounting, like they have their own accounting system. So why wouldn't people who have their own accounting system, um, be able to because the answer when whenever I asked them to produce that email the answer should have been or the training oh absolutely we can record that training we understand how important that is for dealers to to have that information absolutely record that training and you can share it with all of our our users that should have been the answer yeah and so I don't have it yet which tells me until I have that what that tells me is they don't know how to do it I'm just going to say they do not know how to do it. We've dealt with other DMSs, and we've actually dealt with... I remember one of the dealers we worked with quite a while ago, we were trying to get to this and that they had just hired someone on their team that was an expert, had gone to all of the DMS training, was an expert. They felt like they were just like, we hit paydirt, gold, expert. You asked them to come up with that, that we need to do this. Couldn't do it. Couldn't do it. Yeah. And so this is why I say just this is ridiculous. And so that's a different DMS than the one we're talking about. As a former dealer, I tell you what, it's almost like it's this condescending tone. Like it feels like, and this is, it's like, oh, well, they're just buy here, pay here dealers. These are just small independent buy here, pay here dealers. And I said, I've just had enough of that sort of attitude because this is something that we're talking about dealers livelihood. We're talking about, and a lot of them don't know it. Like we're seeing this in these V8 groups, you know, we're asking them to produce it. And first of all, they don't really understand why I'm asking for it. And they don't understand why I'm pressing for the number to be pretty tight. Well, part of that's for in our group, that's part of just integrity of the data that we're looking at. But beyond that, we're using this information to project performance. Like we're tracking historical performance and we're extrapolating that into future performance. And I'm simply saying, this is something that, you know, I'm just, I'm watching these systems out there. We've got this old tech stack technology. Like we've got, it just baffles me that we're in 2024 and we're still using remote desktop connections. It kills me that dealers are expected to operate their businesses in that way. And I just think it's, We can do better. And it's not that the DMS people aren't probably capable of doing this. It's just that with this one, until I get that email and they show me, I'm going to conclude they don't really have any money on their team that knows how to do it. So that's my position. Until they show me they know how to do it. When you say the small buyer pay here, whatever, it is a multi-billion dollar industry. It is a big industry. There is a lot of a lot of money that goes through a buy here, pay here dealer. And, and, and, you know, you, you, uh, an independent, there's a lot of money that goes to independent, but buy here, pay here dealers have more money going through per car typically than an independent does. And so it is, it is a multi-billion dollar industry. And it's like, you should be, you should be busting your behind to, to like how how do we help make sure that dealers have good solid clean information yeah and I'm going to give you two quick two quick reasons that this stuff matters and a lot of dealers that listen to this don't even really realize how important this is to their operation but But one is because this is where we start when you're doing any kind of portfolio analysis. We got to make sure we know what all moved in and out of the portfolio. Like I said, this is the first thing that we do when we have a new client and we're working on their portfolio. This is the very, very first thing we do. We go back and we ask them. I had a dealer just in the last couple of weeks send me. I provide them a template. Give me the last 12 months of these numbers. And then they send it back and the numbers were just all over the place. They're just, they're nowhere close to balance. Well, and the reason why, you know, we've had this conversation with this DMS before, but we now know that it can be reconciled to the penny. I think we're talking about two different systems. Well, it is. I know that, but the one that we have, there's one that we work with frequently and it is reconciled to the penny. It is now, not from their standard reports. We had to produce a custom report. So even that one, we had to go add a column to produce a custom report that would give the numbers that... Because we just kept chasing our tail after a small amount, small amount, and finally realized, oh, they're not giving us this number. And so once we figured that out, we're balanced to the penny. And so people say, well, Jim, this is not accounting. I'm not doing accounting. When I say the word reconcile principle, I'm just saying I want to identify all of it. If I'm a dealer with a $10 million portfolio and my portfolio moves from 10 to 9.5, I need to know where that money went. I need to know where every penny of it went. And so this is why, this is why dealers don't recognize that they need to have it. If I step as an advisor with one of these folks, as you said, it's one of the first things I'm going to want to know why, because I have to assess performance. And in order for me to assess performance, I have to, I have to be able to identify all the moving pieces, right? What's we started here. We ended here. Where did the stuff go? What came in? What went out? So it sounds real simple, but it's like, and the other thing that the reason dealers would need disinformation is really in the context of, theft analysis. I was going to ask, is this a good, almost like an insurance policy? Well, not an insurance policy, but it's a way to just see, is there leakage? It definitely would be among the first things you'd want to do to identify leakage. Because when I show you these numbers on the screen, you're going to see that these dealers, even though they're off by 0.8%, it's still big numbers. And so it's like, Do we know where that money went? It's not that people are walking out of there with it, but we don't know. I don't know if it's going to be large enough. I brought it up. Yeah, so let me just see. This is actual summary reports. If y'all are listening to this on one of our syndicated podcast stations, please go to YouTube at... And you can see the screen, but I'll do the best I can. So what we've got is this screen has six dealers represented on it. These are actual dealers from our groups. And so these are I've removed the names, of course. And so and I just grabbed a screenshot of the summary section of these receivables. And let me just walk through this first one. Um, you know, they, they started the month with 25.5 roughly. I'm gonna give you round numbers here, but they started the month with 25.5 million in principal receivables. According to the numbers they send me. Okay. Sometimes they're, they're sending me an AR balance, which is really not a principal balance. It's got some other things in there and everybody's these DMS systems sometimes call these things different things. I had one of the tech people from the same company who, um, one of the, one of the support people rather told me, well, well, AR balance, that is your principal balance. And I said, well, yours will be the only system I've ever seen do that. Cause typically our AR balance includes some other stuff, you know, without getting into a lot of finance details, like it's usually not the same thing. I want principal. And so because principal, we can reconcile interest, simple interest, obviously accrued interest changes and late charges get added and stuff like that happens in a portfolio. But I want principal. I want to identify all the changes in principle. So again, this note, this dealer started with 25.5. They added about 1.5 in new contracts last month. This is data from the month of May. They had principal collected of 894. This is what they report. Okay. So they send me the numbers and if they're really crazy. And they have to be validated. So you'll go through the source reports and just best you can. It's like this. Only when there's, I don't do every dealer, every single number. What I do is when I see a significant discrepancy, then I go in, that's what we call validation. Like they provide me the numbers that I've got it available to go and verify. That's about data and integrity for the other members just to make sure they're not sending us really goofy numbers. Right. And so, you know, we don't really have that problem, but we're just trying to make sure we don't develop that problem. So now continue with the numbers, the dealer collected in principle, I'm trying to make sure I got the rows right. They collected in principle $895,000. They charged off $203,000 of principle. They did not have any other principal adjustments. That would be just a category for up and down. And you can see across that line, we only had one dealer had any entries in that category as far as they know, because they don't probably know where to look for it. And they closed the month at $26.029. But when we pull the actual report from the close of the month, they said the actual report says 25.6, which means that dealer's off by $367,000. It's only 1.4% deviation, but that is 360. Let me ask you, Michelle, if you owned a business and you couldn't identify where $367,000 went last month, would that be a problem for you? That would be a problem for me if that was what was over a year. That would be a problem for me. Yeah. It's unacceptable. It's unacceptable. And so I'm just saying, this is what you're going to see White Hat Way go out and ask DMS people to do. And I think I've just had enough of them kind of talking to us like, we're small buy here, pay your dealers, and this stuff doesn't matter. You know, these dealers, that dealer I picked is the largest in the group, but the smallest one... was as a $5.4 million portfolio, their numbers, and this was their first month to report, but their numbers were off by $48,000. Again, if you're a dealer, is $48,000 a number that, oh, close enough, let's move on. I don't need to know where that 48,000 went. I mean, come on. Yeah. That's just, this is so, and we've got one dealer and I know what system they're on. And today I'm not naming names of systems, but I can tell you there's one system I can reconcile. I'm familiar with one system that I can tell you exactly which reports to run. Because you've learned from trial and error how to be able. But it's a number everyone should be able to get to. That's the thing. And we've been drumming or beating this drum for a while. And it still is not going to stop. Because it is really, really important. I'm looking at some of these. And some of these are in the positives. Which means that they actually have more. All that really means is their reports are off. Plus or minus, it's like it's still... The point is they can't identify it. They don't know why it's not in balance. And so it could be long or short. And on any given month, it'll be up or down depending on... Sometimes dealers forget to run their receivables report at the close of the month. And most systems... I would just typically tell dealers, I tend to not trust a report. If I run on the 12th of June, my report for receivables as of 5-31, I tend to not trust that. I would rather see dealers in some systems you can auto archive, which I think is a, is an essential thing. Like every system should really have that. They just like at midnight or whatever. I want boom every midnight or 2am on the morning of the first, it runs a receivables report. It runs an inventory report or those things that are, you know, moving numbers, grab those numbers for me because I need my accountant. So I didn't mention accounting. I'm over here, you know, as a, as a, consulting coach analyst, I'm really looking at portfolio performance and operational things. I'm not really getting involved in accounting, but everything that we're talking about here would also benefit the accountants and CPAs. This is all stuff that they, if they have that summary report, then they could know. you know, especially again, largest asset in the business, they could know that that summary gives them what it is that we're looking for. So again, these numbers are, but look at the amount of money that's going through these dealerships, like principal, just principal and interest collected. George is asking where, what are some examples of where the missing money could be? Um, there's some, I can share here, George, and some, I can't, um, some, and that's because, because of the theft analysis part. And because our show goes out to both dealers and managers, um, There's some of that stuff that I don't want to share publicly. We'll share it with the dealers about where to look and what it typically is an indication of. But I think part of what's happening here is the system just doesn't tell us. When there's a... A write down, you know, a write down for me that by definition would be something that is not a charge off. It's not it's not a repo. And we process the repo. We wrote off the account. This would be like an adjustment when a payoff happens. A payoff comes in. It's a settlement. We have, you know, eleven hundred dollars left over and we just write it off. OK, so there's write downs that could happen, which is something that I want to talk about standardizing things, because then it makes it easier because dealers are all over the board. Yeah. about how they handle that transaction. And it has nothing to do with their model. It's just about how they are attributing funds and how things are moving around in their DMS. Yeah, and I think I'm aware, like this is part of, and I haven't mentioned it, but folks who are tuning in maybe for the first time don't know that Michelle and I have gone to great lengths um to remain agnostic there's a reason that you don't hear a sponsor on the front end of our podcast right there's a reason that you don't hear ads in the middle of our podcast we it's important to us that we remain agnostic and we think that's how we can best serve dealers as we're going to serve all dealers just like this conversation today we're not picking on anyone dms yet we're not naming names but I'm just saying what we're really doing here is we're saying we're going to try to highlight the people who are doing what we ask they recognize the importance they make these things available for dealers and we're going to highlight that stuff that's you know that's the answer to so back to george's question so you're talking about write downs are there other things that are that are done that that uh might be because it's just not standardized. So many dealers that get started in this business, there's no playbook that says this is the way that you should do this stuff unless you spend a lot. There's just not something that says, okay, dealers, this is a standardized way of doing things so that we know that that uh or that you know that you're comparing apples to apples well you use the word standardized and I think it's it's unlikely that you're ever going to get to any real standardization in the used car especially to the chagrin of many accountants yeah yeah you're not going to have standardization people people's practices vary uh and we've talked about in the past part of the reason people are drawn to this segment is because they're fiercely independent and this is a great place to be if you But sometimes, you know, we've dealt with some big dealers that it's like this write-down thing. And there's like how they do their accounting for a repo or whatever. But when we get in there, it's like, oh, guys. Well, and you get into some stuff that's state-specific. Like I had a conversation with a dealer yesterday. He says, you know, we're doing it the right way. Well, so you're the only second dealer I've ever heard in my career that does it that way. So I don't know what's the right way. It's like, you know, there's a common way. you know but can I call it the right way I mean everybody has their practices I mean you know go ahead so write down Yeah. I write down again, some of the stuff I can't, I don't want to share here. It's like, so I think what you're really talking about though, if you look at that list though, what we can figure it out for ourselves. If I have a report on the first of the month that runs on the, the night after we end business and we have to allow for any, if our online payment portal is processing payments at midnight or something, let's make sure we allow for that. So maybe we always run the report at 4am on the first, but if I have that number and, at the start of the period and I have the same number at the end of the period then I'd be able to go in and identify this much was added new contracts this much just principal like you know the other numbers late charges not not um loan to value not I mean not as just what are the things the outstanding principal balances on my contract so the so I'm just saying this is part of why so for us we then take this information and we start to extrapolate and build roll forwards and projections and some really important stuff that the dealers are really benefiting. But if the numbers are incomplete, then it doesn't. George piped in again and said, so some could be just innocent errors, which, you know, you work with dealers and it's like, okay, let's make sure that we're, we're attributing things where they, where they would make most sense with these kinds of reports. Some could be employees working their pay plan and some could be just criminal. Yeah, so that's a good way. The way I've typically said that, George, is it could be outright theft or it could be mismanagement. It could be somebody's got a little too much authority in the DMS and they're doing some stuff that they think is what they're supposed to do or they think is the right way to manage an account. But it messes up the numbers. It's not that they're doing anything egregious or intentional or nefarious, I should say, but the numbers are still missing. We still don't know why. So, you know, in the simplest form of final report, like a white highway summary report would probably have a little more detail than this. I think what I'd like to be able to have the dealers do is click on it. Like if I want to click on expand any one of those and say, OK, principal collect, give me the detail. Click on it. Boom. Here's all the the summary that drives into that. But think about what I'm asking. I'm asking for here's a dealer, you know, that I'm working with that's got a multimillion dollar portfolio. And I asked their DMS provider to send us an email that tells us how to reconcile principal crickets. I'm getting crickets. And it's like, I just have had enough. It's like, this is, this is so fundamental to operation of a dealership. It's like, we got to be able to use this as an anchor. And this is like, this is so important. It's like foundation. This is, this is your baseline. This is, yeah, this is if, if you've got everything in your system so that it's running a clean number and then you have a discrepancy, that's a really great flag for you to like, look at. And how many, you know, we've, we've had accountants on the show before and they're like, if you got employees, you got theft. Um, yeah, I don't, I, I, we have heard that. Um, and, and so this is, you know, I, yeah, uh, this is a really great way to determine if there is something that is fishy. Doesn't mean theft, doesn't mean criminal, but something that's just, it's off. There's, it's not right. Well, and some of the outright theft won't show up in the DMS. The DMS might be just fine, unreceivable. So this is why we can't discuss all the particulars. So then you go with your banking accounts and all of that stuff. There's a lot of stuff you have to dig into, right, to be able to identify that. But it's like I remember a dealer years ago told me, and he was an entrepreneur from many businesses, and he said, you know, you kind of, if you're the analogy was people working in the rice fields, if they put a little rice in their pockets, you can probably live with that. It's when they start backing up the semi truck to the field that you got to guard against. Right. And so this is kind of, you know, you, can you have a little bit of theft? Maybe. I mean, I, I think for today, it wasn't really so much to get into that for me. My, my role is, um, performance of the portfolio. And if dealers sit in this group and they can see now, now they can look and see, because we use this information to drive what I call conversion rates, which is how well is the portfolio converting into cash, right? Like how well is it performing? Like, don't tell me about your delinquency. That doesn't tell me the whole story. Like I need to know how is it yielding cash? How is it generating cash? And so this is the baseline. This is foundational to that. And it also serves- It drives the rest of the conversation. It's theft, accounting, all this stuff. But it's like, you know, if you call yourself an accounting system, If you want to ask your dealers to use your accounting, then it should be super quick. Send me an email. This is how you get to beginning and ending balances on receivables. And so this is part that I say, it's just not something I'm going to tolerate. We're going to continue to talk about this until... And again, we will invite these folks to the, you know, as they produce this report and we can see that it works for our dealers, you know, especially in these group formats, then we can, we can then invite these folks to the show and say, thank you for doing this. This is so fundamental for dealers. We're thrilled to see that this is a solution now. And so, yeah, it's just, you're taking a little exhale. You got me a little worked up this morning. Yeah. I, well, I, you know, the intent was not to have cranky Jim. Just try to get past, just give me, give me a place to vent. But listen, I, you know, this is, you can tell this is for dealers, right? I'm, I'm going to bat on behalf of dealers. And I just, I think this is something that I don't hear other, other people talking about this. And, and, and it's not just me being particular. And it is time for dealers to not accept this is close enough from their DMSs. It is time for dealers to say no. It is time for DMSs to be able to balance that kind of stuff out to the penny. And I'm going to be corresponding with these folks and I'm going to say these dealers deserve this. They do. They deserve this. And I think it's going to affect my recognition. Close enough isn't what dealers deserve. And there's just the support element. So one of the other quick things I want to mention is, you know, if somebody's contemplating a switch to a DMS, Then obviously if they talk to the DMS, they're going to get a name of a couple of references and they're going to talk to the sales department who's going to have really good things to say. And they're going to do a demo and everything looks nice. So you can buy a car, sell a car, collect some car payments. It all looks nice, right, in the demo. The real questions are, you know, beyond that, some of this stuff, and then the whole customer service element, like how do they handle customers when they come forward to make a request? So I think for me, what I'm asking dealers to do is, look, reach out to me on behalf of White Hat Way. I can put you in touch with dealers who are using the software who may not be on the list that was given to you of people who really like them. So if you would like to get as agnostic as you can in a reference for a DMS, reach out. And of course, I'll share my perspective. So this is also important. We just throw this in here at the last minute, like, I currently, I have on my desktop and my device, I currently have access, and this is why I say remote desktop connections. I got to reach out to the company, get a remote desktop connection. That is so archaic. And so I've got connection. And over the years, I've had access to all of them. There's probably 20 of them out there. But I've certainly in the last few years, I've had access and currently have credentials to many of the systems. So I'm in there at least on the reporting side. I'm a former dealer. so I have a pretty good understanding of what separates them because again they'll all buy a car sell a car collect car payment right but will they reconcile the notes will they um you know do what do the integrations look like how does that pastor and how do they handle support like um you know a lot of this stuff so that's a big one because we've worked with some with some dms's where they're like yeah let's get in there and see what we can do to help you resolve the situation And then there are some, this one that you're specifically that you were feeling very frustrated about is they want to charge you. Yeah. every single time we turn around yeah it's like we want to charge you oh yeah you're gonna get charged you're gonna get charged and yeah and it's like yeah we'll have we'll be happy to help you with this and they're they're not the cheapest dms out there they're not and so that's why yeah and then they want a nickel and dime for every little thing is a custom thing and what I'm saying you're telling me that this report is custom and you're calling yourself a uh, you know, a general ledger accounting system, then you're going to try to charge me custom for something that should be so fundamental. It should be the very first report on the list when dealers go into their management reports, you know, or accounting reports. It's like, it's, it's like, it's, it's just baffles me that this stuff is not there. It's just, it's, um, and, um, so anyway, I think I've probably vented enough for today. I think people understand that I feel strongly about this and I'm, I'm going to continue feeling about it. Well, and, and it's, Sometimes it's very warranted. And I've seen Jim come out and it's like, this is unacceptable. And, you know, it's one of those things that... I don't know if you guys ever remember the old commercial EF Hutton. When EF Hutton speaks, everyone listens kind of thing. Because it's like, Jim doesn't get worked up about stuff very often. So when he is... might be worth taking a listen to well you know I think with my voice there's a lot of experience deep in the trenches right and a former dealer like and managed a lot of this stuff and now as a consultant advisor analyst like yeah I see a lot of this stuff yeah yeah all right well we went really long today but it was a it was a good conversation uh see you on monday I will see you friday as well but we'll see you on monday at niada don't forget that vote is it 4 p.m. So if you're going to be there, be there. All right, everybody. Have yourself a great rest of your day, and we will see you on the other side.
