Managing Cashflow and Working Capital with Samantha Abramson, Just Date

Jordan Buckner: [00:00:00] Building A CPG business is really expensive, especially considering the cash flow cycle of your orders. A lot of times you have to produce months in advance of when you're going to sell the product, and even once you get purchased orders, you still might not get paid for 30, 60, 90 days. And so how do you actually. Get the cash to float that divide between when you're paying for your product and producing it to when you're actually getting paid from it. After the retailer, we're gonna be diving into some of that and really understand how they can make, Financing work for your business. So for this conversation, I've invited on. Sam Abramson from just Dates who's the CEO there, and we're gonna be walking through how she and the team have been using to help their business. Sam, welcome on. 

Samantha Abramson: Hi. Thank you so much for having me. I'm excited to chat.

Jordan Buckner: So I have your dates syrups My pantry along with your , chips. But I would love for you to give just a quick overview of what the company is. 

Samantha Abramson: Yeah, so [00:01:00] at just date, we are making sweeteners and now chocolate from date. So we have organic date syrup, single ingredient organic pomegranate syrup, two ingredients. Organic date, sugar just dried ground, whole dates, and then two skews of date sweetened chocolate chips.

A dark three. Ingredients and milk. Four ingredients vegan with the addition of organic oats.

Jordan Buckner: That is really exciting. And I know that the company launched the Syrups and then just launched, the date sweetened chocolate chips recently. Tell me about the transitions. I. 

Samantha Abramson: Yeah it's interesting because I think it was a way to expand in an aisle that we already had familiarity. So we are already in the baking and sweetener aisle. Syrups and sweeteners can be slow moving. And so we started to think about what could potentially be higher velocity and. I felt really strongly, you don't have a full syrup sweetener lineup unless you have chocolate.

'cause so much of what people think of when they think of delicious sweet [00:02:00] things is chocolate. So it felt like a natural extension of what we had been doing in the aisle that we had been playing in. And potential for something that would be much higher velocity.

Jordan Buckner: I think that's awesome. And did that that true?

Samantha Abramson: It has rained true. Chocolate chips move much faster than syrups and sugar, and I think that we are currently kind of catching up to our own demand. We've been really blown away by the velocity numbers on date, sweet and chocolate, and we're so excited that so many people are loving that product.

Jordan Buckner: That's so and cool to see that in the market. I know Getting access access capital and financing can definitely be a challenge. How have you been able to through some of your needs make sure have cash support that production as to new retailers?

Samantha Abramson: Yeah, so we use Aion as a working capital partner. And they've been really helpful just in all of the different ways that they've been willing to work [00:03:00] with us. So it's generally an AR based line, which is amazing for the moments in time when our AR is really high. 

Jordan Buckner: Can you break down what AR means those who may not know?

Samantha Abramson: Sure. Accounts receivable. So basically. This morning I spent the morning invoicing a lot of UNFI orders that went out earlier this week. And then once they've been invoiced, they're in our accounts receivable and I can borrow against the accounts receivable knowing that UNFI is a reliable payer aion lets me , borrow up to 80% of my AR. So anything I've invoiced, I can borrow 80% of. And. That's great. Right now there's many pos so it's been, it unlocks a lot of access to capital. Then sometimes there's moments. We have a somewhat seasonal business. So we do really well in Q4 baking season. Then we do really well in Q1 better for you season, and then things can taper off a little bit as you get into the summer.

And the [00:04:00] summer is when we need to be. In massive productions getting ready for Q4, and that's when Aion starts to think a little bit more creatively alongside us as a partner. And so last summer we did a lot of PO based financing, so that's the step before the invoice. So letting us borrow against the pos and that has been helpful for us to unlock. Capital when the AR isn't necessarily as much as it can be in our peak seasons.

Jordan Buckner: That makes a lot of sense sense goes know. me a little Aion and what they are and how you use for your business? 

Samantha Abramson: Yeah, so Aion acts as a bank, so we have both a checking account and an accounts receivable account, and basically we get paid into our Aion bank account, and that helps to pay down our line of credit that we're using with Aion.

So it's a. Cyclical [00:05:00] line, it's revolving based on what AR we have available. So as I invoice more pos, that's when there may be more of a line available than as they get paid down. If they get paid in full, it may open up some more money. Where as if they don't get paid in full, it may just pay down the line. I would say that as payments come in and out, we have that flexibility to continue to borrow against the line.

Jordan Buckner: Okay that's cool so Aion, that's works just your business bank bank account. in to that, they have the ability to let, allow you to loan you money against your account receivables. that way it's both kinda a banking product and a debt financing product, and they're using then probably , the data from your bank account to underwrite. The loan process essentially. essentially they actually how you're making, how much is coming in, what's getting paid. paid. 

Samantha Abramson: Yeah. And I would say there's additional features in there.

Like all, I forward all of my [00:06:00] bills to the Aion account and so I both invoice I invoice from the Aion account and then I pay bills out of the Aion account. So it's also like a tool for billing 

Jordan Buckner: a bill pay system. 

Samantha Abramson: Yeah, there's a bill pay system.

Jordan Buckner: That's awesome I think that to like, everything in one place. , So that not using like multiple software systems are there other features within that that you're using or around for helping small small business, 

Samantha Abramson: it's fully integrated with QuickBooks, so that's helpful 'cause we still use QuickBooks as our accounting system. I would say the other thing that's helpful is there's recently an instant payment feature.

So sometimes there's something that I wanna make sure it gets paid that day so that we can ship it that day. And so that has been a really helpful feature to use. Making sure I can say to, vendor. I paid you the money's in your account, and then we can just pick it up immediately. And , that's been , a nice, nice feature for us to use.

Jordan Buckner: Oh wow. That is really nice. I [00:07:00] know. Um, I've into that issue before. It's like, oh, I'm paid by ACH or something. something. That takes two or three three days to, to get. mean, it sounds like it probably different software that you could be using. Probably that costs like, you know, hundreds of dollars additional combined. How much does it cost , to use Aion? 

Samantha Abramson: It's about 500 a month, and then there's interest rates on what you've borrowed, and that changes every single day based on what you've borrowed each day. So if you don't have that much drawn on your line, then the interest rate is less significant.

Jordan Buckner: Okay, that's super helpful. so how are you thinking about then using Aion as are growing the business into this year, and then what It helps you unlock. 

Samantha Abramson: Yeah. I think that this year we are. Growing very rapidly as a result of chocolate. And so I think that as we move toward those summer months when we need to be in production and may not have the cash on hand, that's when I make sure that I'm looping Aion in as a [00:08:00] partner. And we're at the point we'll reconnect monthly. Just to let them know, okay, this is what the, it's looking like. This is where I think we're gonna potentially run into a cash crunch and kind of problem solving together to work through. Okay. We need to be ordering. I would say last year we. Probably could have had an even better year if we had always been in stock.

And so how do we make sure that that doesn't happen this year and that we are, there's never an empty shelf and we always have enough inventory because that is what leads to even more invoices. So I think it's just working through it collaboratively and being able. I have a cashflow model. So pointing out like, okay, this is when I think we could potentially run into some challenges and working through together, whether that's access to a larger line and most likely it's less about the line for us and more about how do we finance the line and that you like a, are we using?

Jordan Buckner: yeah, and that you have the partner to be able to like work through that. [00:09:00] monthly and so it's not just like a one time large thing, but you can you can as you need it throughout the year. I love that you also work with a cashflow model. I think a lot of brands struggle understanding how to think about cash because it's happening in different amounts over time, and it's like this real struggle, your minds mind's Have you any like. learnings that helped you better understand like. cashflow planning and think helpful? 

Samantha Abramson: Yeah, I would say the cashflow model has unlocked what used to be intuitive and now I have data around that intuition, so, oh, like I think we'll have enough to pay this. Now I know we'll have enough to pay this. And so I think for me, it's really like looking at the cash at the start of the week and then what is gonna go out that week, what is coming in that week, and mapping out.

It's a, for me, it's a weekly model and being pretty diligent [00:10:00] every single Monday, checking on different. Data of, okay, what did we invoice last week and what payments came in last week and now based on what payments came in, how much is their kind of left out standing? 'cause that helps me, I have to model it based on the line, which there's like a level of complexity.

And I did get some help on this. I didn't build it myself. So, I can't totally explain how to build it, but it's really just diligent understanding of what's in and out and really mapping it out far in advance. Like I, my model is for the entire year and anytime I know of an upcoming payment, like a, just thought of something that is like a one off payment, and I'll say, okay, this is coming and I'll add a line.

Okay. I know that we're gonna need to pay this at by this time, . And it's anything that's a recurring payment, anything that's a monthly payment, it basically represents every single payment that just date is going to make for the entire year. And it also helps me to map through [00:11:00] like, okay, when, what timing do I think will be production?

And sometimes I'll say, okay, we actually need to produce chocolate sooner, so I have to pull in that cash outflow in and then say like, okay, what else might I need to move around to be able to afford that?

Jordan Buckner: Oh my gosh, that's amazing running TeaSquares I used a used flow model as well. Transparently is like everybody's on cash, like we need to know, like when we have the cash and when we don't, so that that we able to pay bills. But to really understand what's happening happening your I think a lot of founders rely on something something like QuickBooks kind of know where things are going. seeing the, Cash was. that kind emphasis for start a cash flow model to understand to understand the business? 

Samantha Abramson: Yeah. I brought in a new advisor who was a previous founder, and this was something that he had used to run his business and he helped me build it [00:12:00] and. Just un it took away so much anxiety for me.

And there are weeks that we don't have enough cash to make all of our payments, and that's okay. 'cause I can say, I can't pay you this week. I can pay you next week. And I know that, and I think that that makes my vendors feel better. Okay. Like. She knows. And I think that that it just makes everyone around the table feel better.

So when hearing, oh, I think that this will really reduce stress for you. 'cause there was stress around, okay, what is this week gonna look like? What are we gonna be able to pay for? And now I, sure there are still weeks that we cannot pay for things, but I do know when we will be able to, and sometimes that's based on.

Okay, like next week we're gonna be low on chocolate in the warehouse and that means we're gonna invoice less next week 'cause we're gonna sell less chocolate. And so some of that, those sales will push out to when we actually have chocolate in stock. And I. That will change shift [00:13:00] payments a little bit, but it's just the understanding of this is what's gonna happen and this is when I'm gonna be able to catch up to it.

That I think gives transparency for me and to also all the partners that I work with.

Jordan Buckner: I think finance.. I pretty finance and Your actual like money. It's the number one stressor for both founders and in people's personal lives, right, of knowing where money is, when it's coming in, when it's going out. And a lot of people are of not taught this stuff on like an active managing basis and it causes so much much stress and much And so I love that you have a process and a system system doing and I recommend, you know, all founders do. do I'd love to know like what is is Process for like, looking at the spreadsheet. Is it like every Monday morning you time you're it? like single day or pure out week? 

Samantha Abramson: So I meet with my advisors every Monday morning to [00:14:00] run through cash flow and it's at 10:00 AM on Monday. So That's I live in mountain Time, it's in Pacific, so I have two hours basically to make sure that it's in a good place before I have that meeting. Whenever I make payments, whenever I go into Aion and go and make payments, I know that I've made those payments. So this morning I was in my cashflow model and I looked through the payments for the week that I had planned and there are some that are not gonna pay this week. So there's one that's gonna technically pulling on Saturday.

So I know that that will actually pull on Monday. So I'm shifted it to next week. And there was another one that I didn't make that payment this week, so I moved it also to next week. So I use it. Diligently on Mondays, but I would say whenever I'm making payments, I will sometimes move things around and when I'm putting in a po I will say, then put that into the cashflow model too, based on, okay, so this morning I made a, placed a po, I have to pay half upfront, half a net, 30, so for next week I put in the upfront payment and then for [00:15:00] 30 days after I receive it, I put in the second payment.

Jordan Buckner: Oh my goodness. That and many I talk to, talk, like, oh that would so much anxiety of like seeing all the all numbers. but actually pushman push it's actually more anxiety causing when you have no idea what the numbers are and where you're gonna pay. Right? Like be back level of control and visually like to see what's gonna happen in. in the future. What you know. 

Samantha Abramson: Yeah, and I would say like even when I started using this model, we had some past due that we needed to. Catch our tail on and we put that in and we marked it in yellow like this is past due. And no, we're not necessarily gonna be able to make that whole payment all at once, but we can pay it down in week by week.

And so I do think like it can feel really overwhelming at the beginnings. You're like, I feel overwhelmed by this and I feel like I owe a lot of people money and I feel like I'm not gonna be able to do that. And I think it just helps you to show like. This is how I could do that. And then [00:16:00] as you start to do it, you're like, oh, this is actually, I'm making my way through it. And it's been a confidence builder in running the business for me.

Jordan Buckner: Sam, how with situations when, say we're selling to a distributor and you don't quite know how much you're gonna get paid in actual check through chargebacks and deductions. How are you kind of putting those estimated payments in? 

Samantha Abramson: Yeah, so I think we say that we have a 25% trade spend in the model. We only actually have closer to a 10 to 12%. So that generally gives us like a little, I would say, whenever modeling something. Be more aggressive and you think you will have less cash and then there's like room for pleasant surprise.

So I would say you always wanna in something that's modeling. It's different when you model a forecast for investors than like a forecast that you're actually using to [00:17:00] operate a business. Like you wanna make sure you have that like more conservative outlook. And I would say in cashflow modeling like that more conservative.

Approach is super, super important. 'cause you only ever wanna be surprised on the upside. So you wanna think, okay, U NFI is gonna be really aggressive and they're gonna take 25% out of every single one of my checks.

Jordan Buckner: I love that because I think a lot a lot people will think, average so that be quote more to what's gonna But when you're flow, if it's. you're being a less and then eight down the road road, you get more. it doesn't all over time because you're money. deal with now versus future. so I so you take conservative of of saying like, I. what's maybe close to most make so that I actually have poor had more cash of the day. 

Samantha Abramson: Yeah, and it's interesting 'cause you know, I would say UNFI is actually a pretty good payer for us. They usually pay within 15 days. That being said, they don't pay all [00:18:00] of their invoices within 15 days.

So recently I just went back and I was like, you owe us $85,000. And it was all. Anywhere from 90 days past due to 30 days past due. And so then when that most of it got paid, I don't wanna say that everything got paid, there were still deductions on it, but when it got paid, because the model was kind of no longer expecting it to come in that allows for that like bonus ca like surprise cash.

So that can be really, really helpful of, ' cause things will. Kind of it, you, you adjust based on your receivables. And so those pieces can be really helpful , just in being conservative about, okay, what do we think is actually gonna happen? And what could be the worst case scenario? I think that cash flow model should ideally prepare you for a worst case scenario.

Jordan Buckner: I love and I've before had invoices that were never paid. And have a close eye on that, right, like there's a lot of cash that's [00:19:00] yours and that maybe Vendors or, your customers could pay, pay but either they forgot or it got lost in the system or something something happened. not nefarious, , money that you should have that's in your bank account that you that you don't. And able that so you know what you're expecting, expecting when that happen, you can immediately follow up versus realizing it it later. 

Samantha Abramson: Yeah. Yeah. I think the more, and that, you know, there's so many different things about running a small business that can feel overwhelming, like.

Right now, I know that I chased down the money that they owed us and we got paid for it, but there were still deductions on it. And so now I have to ask for the backup for those deductions, and that's been like sitting in the middle of my to-do list for weeks. So it's a balancing act of like what's the highest priority.

But I would say like for me, making the understanding of the in ins and outs of every single week, making that a weekly priority has. me sleep better at night.

Jordan Buckner: I love [00:20:00] sam, thanks thanks for being on today and talking about cashflow for your your CPG brand. 

Samantha Abramson: Of course. Thanks for having me. I.