Latest / Selling on Giants: The eCommerce Marketplace Podcast / Bookkeeping Habits That Fuel eCommerce Growth with Arthur Glinkin

Transcript

Bookkeeping Habits That Fuel eCommerce Growth with Arthur Glinkin · Selling on Giants: The eCommerce Marketplace Podcast

• 0:00
  SPEAKER_00: Welcome back to Selling on Giants.
• 0:02
  SPEAKER_00: I'm your host, Mr.
• 0:04
  SPEAKER_00: Will, and today we're diving into one of the most overlooked parts of running a profitable e-commerce business.
• 0:10
  SPEAKER_00: That's bookkeeping.
• 0:12
  SPEAKER_00: Joining me is Arthur Glinken, co-founder of SNG Bookkeeping and a tax consultant at Deloitte.
• 0:18
  SPEAKER_00: Arthur helps e-commerce founders clean up their financials, understand their cash flow, and build bookkeeping systems that scale as fast as their businesses do.
• 0:28
  SPEAKER_00: In this episode, we cover the most common bookkeeping mistakes e-commerce sellers make, from ignoring sales tax nexus to misreporting Shopify payouts.
• 0:40
  SPEAKER_00: We also tap into how to track your true cost of goods sold, including tariffs and landing costs.
• 0:46
  SPEAKER_00: Also, what tools like QuickBooks, WebGility, and TaxCar actually do to simplify your financial setup and why clean books aren't just about compliance.
• 0:55
  SPEAKER_00: They're a growth strategy that gives founders clarity and control.
• 0:59
  SPEAKER_00: So whether you're a six-figure seller or scaling towards eight, this episode will help you master your money and make smarter decisions in your business.
• 1:08
  SPEAKER_00: Let's get into it with Arthur from SNG Bookkeeping.
• 1:11
  SPEAKER_00: All right, let's recap some of the biggest takeaways from today's conversation with Arthur Glinken of SNG Bookkeeping.
• 1:19
  SPEAKER_00: First, e-commerce bookkeeping isn't like traditional accounting.
• 1:23
  SPEAKER_00: Most general accountants miss key nuances like sales tax nexus, platform fees, tariffs, and landed cost.
• 1:31
  SPEAKER_00: E-commerce requires its own playbook.
• 1:33
  SPEAKER_00: And if your accountant doesn't understand that, you're leaving money on the table.
• 1:39
  SPEAKER_00: Second, know your nexus or risk overpaying and under-reporting.
• 1:44
  SPEAKER_00: Your physical presence or sales volume in a state determines where you owe sales tax.
• 1:49
  SPEAKER_00: Hit$100,000 in sales in Illinois or$500,000 in Texas, and you've got some filing obligations.
• 1:58
  SPEAKER_00: Tools like Taxjar can automate all that tracking.
• 2:02
  SPEAKER_00: So you can focus on selling instead of stressing over tax code.
• 2:06
  SPEAKER_00: Third, your payouts are not your revenue.
• 2:09
  SPEAKER_00: Those Shopify or Amazon deposits you see, they're already net of fees, refunds, and taxes.
• 2:16
  SPEAKER_00: Arthur broke down how tools like WebGility and A2X connect your storefronts to QuickBooks Online.
• 2:22
  SPEAKER_00: So you can see your true income, not just what hits your bank account.
• 2:27
  SPEAKER_00: Fourth, don't forget about tariffs and landed cost.
• 2:30
  SPEAKER_00: If you're importing products, those expenses belong in your cost of goods sold, not as a random one-off expense.
• 2:37
  SPEAKER_00: Ignore them, inflates your margins, and gives you bad data for pricing and profitability.
• 2:44
  SPEAKER_00: Next, profit does not equal cash flow.
• 2:47
  SPEAKER_00: You can be profitable on paper and be broke in real life.
• 2:50
  SPEAKER_00: Inventory purchases don't hit your profit and loss statement, but they drain your bank account fast.
• 2:56
  SPEAKER_00: Your statement of cash flow is where the truth lives.
• 3:00
  SPEAKER_00: So review it often.
• 3:02
  SPEAKER_00: Arthur also broke down the difference between a bookkeeper, an accountant, and a CFO.
• 3:08
  SPEAKER_00: Your bookkeeper handles categorization and monthly reports.
• 3:12
  SPEAKER_00: Your accountant focuses on tax compliance, and your CFO looks forward, forecasting, budgeting, and planning for growth.
• 3:20
  SPEAKER_00: Knowing when to bring each one in is a game changer.
• 3:24
  SPEAKER_00: And finally, automation is a tool, not a replacement.
• 3:27
  SPEAKER_00: QuickBooks and AI can handle repetitive work, but they still need a trained eye to catch errors and interpret what the data actually means.
• 3:36
  SPEAKER_00: Clean books don't just keep you compliant, they give you clarity, control, and the confidence to scale.
• 3:42
  SPEAKER_00: So remember, clean books equals clear decisions.
• 3:46
  SPEAKER_00: That's how you grow smarter, not harder.
• 3:49
  SPEAKER_00: Arthur, welcome to the show, man.
• 3:50
  SPEAKER_00: I'm excited to have you on and to talk about a very um hot topic, like the unsexiness of running a business is your financials, your bookkeeping, and everything else.
• 3:59
  SPEAKER_00: So really excited to have you come on and educate our e-commerce sellers on some best practices around bookkeeping and general financing.
• 4:07
  SPEAKER_00: Um, today's topic is master your money, bookkeeping habits that fuel e-commerce growth.
• 4:12
  SPEAKER_00: And I'm excited to have Arthur on here from SNG Bookkeeping.
• 4:17
  SPEAKER_00: So, Arthur, we're getting kicked off.
• 4:19
  SPEAKER_00: I'd love to know what inspired you to start SNG bookkeeping and how did you kind of evolve into your current role?
• 4:25
  SPEAKER_01: Yeah, thank you all.
• 4:26
  SPEAKER_01: Excited to be here.
• 4:27
  SPEAKER_01: So I know we talked about this a little bit before the actual podcast as well, but Daniel and I we run SNG bookkeeping.
• 4:34
  SPEAKER_01: So if you're not familiar with bookkeeping, it's basically accounting.
• 4:37
  SPEAKER_01: People kind of interchange uh the two terms, bookkeeping and accounting.
• 4:41
  SPEAKER_01: But we had a business before.
• 4:42
  SPEAKER_01: We were in the SEO space where we would essentially outsource all the work um to a contractor and fiver upwork wherever we would find someone.
• 4:50
  SPEAKER_01: And that was a complete mess because we had no control of who was doing the work.
• 4:54
  SPEAKER_01: We didn't even know how to check if the work was heading in the right direction.
• 4:57
  SPEAKER_01: So Daniel and I we thought to ourselves, we're studying accounting at school.
• 5:01
  SPEAKER_01: Why don't we literally just instead of trying to start this whole new business, why don't we apply what we're learning in school and actually make a business out of it?
• 5:07
  SPEAKER_01: I mean, I'm a full-time tax consultant at Deloitte as well.
• 5:10
  SPEAKER_01: Daniel's also at Crow, which is another big firm working in tax.
• 5:13
  SPEAKER_01: So we thought we have all this experience, we keep stacking all these skills.
• 5:16
  SPEAKER_01: Why not just start a business on the side as well?
• 5:18
  SPEAKER_01: So um, luckily, our first ever client that actually came.
• 5:22
  SPEAKER_01: I mean, when we started, we were thinking to ourselves, we're gonna work with anyone.
• 5:25
  SPEAKER_01: We just need some cash, we want more bookkeeping experience, get our name out.
• 5:28
  SPEAKER_01: And luckily, our first client was an e-commerce client.
• 5:31
  SPEAKER_01: And I mean, their previous accountant, they had one that was kind of heading out of the e-commerce space.
• 5:36
  SPEAKER_01: So we looked at the books and the client told us that he was a great great accountant.
• 5:40
  SPEAKER_01: He had 40 years of experience, and we looked at those books and were like, if this is 40 years of experience, this is crazy.
• 5:45
  SPEAKER_01: I mean, I saw so many errors, even though it was our first client that we were looking into, we had that accounting background.
• 5:51
  SPEAKER_01: So I saw so many errors, and that's kind of where we realized that e-commerce is just a completely different ball game because you have sales tax, inventory, tracking, cost of goods sold, tariffs, all that.
• 6:00
  SPEAKER_01: So we kind of realized this is the niche that we can really dominate, you know, make our name, uh get it out there, and then really become the e-commerce accountant.
• 6:08
  SPEAKER_01: So that's that's how we started, and that's kind of the direction that we're heading at right now.
• 6:12
  SPEAKER_00: Man, I love that too.
• 6:13
  SPEAKER_00: And it's like your your main gig is uh your nine to five support and your five to nine.
• 6:18
  SPEAKER_00: So that is really cool.
• 6:19
  SPEAKER_00: And uh, you guys work for really top-notch agencies, so I'm sure what you learned at Deloitte and Crow is obviously spills over.
• 6:26
  SPEAKER_00: Before I get into the main topic, what made you choose e-commerce?
• 6:29
  SPEAKER_00: Was it just faith and coincidence that that e-commerce brand came over, or were you guys uh dabbling in the e-commerce realm before that?
• 6:37
  SPEAKER_01: So I'm not gonna lie, it was mostly just the coincidence because I mean, e-commerce, we got lucky with that first client that uh she actually reached out to us because we we passed her QuickBooks Online exams, put her name out there, and she found us online.
• 6:51
  SPEAKER_01: Um, but then you know, obviously, when you're starting the business, I know I listened to a lot of Alex Ramosy, and he's always talking about this, you know, niche down, pick a one avatar that you want to target.
• 7:01
  SPEAKER_01: And that was tough for us because I mean, we just want to take on anyone.
• 7:04
  SPEAKER_01: If like a family friend has someone that needs their books done, we wanted to say yes.
• 7:08
  SPEAKER_01: Yeah, um and we did in the beginning, we took on a couple of different clients, but now after actually working with some of these e-commerce brands, like even just for my sake, I realized, man, there's no way I want to learn because I'm sure each niche has its own little specifics.
• 7:22
  SPEAKER_01: Like, I know construction can be uh very difficult with job costing, you know, different construction projects and so on.
• 7:28
  SPEAKER_01: If I have to learn this much to become an e-commerce expert, I can't imagine going through another learning curve like that um to learn construction or another niche that could just be a complete pain if I have no idea what I'm doing.
• 7:39
  SPEAKER_00: So my business coach told me when we started the riches are in the niches.
• 7:44
  SPEAKER_00: So, like the more niche down you can get the better.
• 7:47
  SPEAKER_00: And um, we love e-commerce brands.
• 7:49
  SPEAKER_00: Obviously, we serve the same customers, so they tend to be fun to work with, and there's always uh always interesting projects.
• 7:55
  SPEAKER_00: So awesome, Arthur.
• 7:56
  SPEAKER_00: Well, appreciate it.
• 7:57
  SPEAKER_00: It sounds like you have a lot of experience with uh working with e-commerce brands.
• 8:01
  SPEAKER_00: So let's jump into the main topic: bookkeeping habits that fuel e-commerce growth for sellers.
• 8:07
  SPEAKER_00: So, on that note, what is what are the most common bookkeeping mistakes you see e-commerce brand owners making and what are some tips to avoid them?
• 8:16
  SPEAKER_01: Yeah, I mean, there's a lot because, like I mentioned, e-commerce bookkeeping and accounting is just a different animal compared to you know your typical chiropractor down the down the street.
• 8:26
  SPEAKER_01: So um, there are a couple things that I've noticed.
• 8:28
  SPEAKER_01: I think there's three or four that I'd like to talk about.
• 8:31
  SPEAKER_01: Um, number one is sales tax, like not having a system in place to actually track your sales tax.
• 8:37
  SPEAKER_01: Um, because if you're not familiar with how sales tax works, the customer pays you the sales tax and you're typically responsible to remit it to whatever state they're from.
• 8:45
  SPEAKER_01: And obviously, that's there's a bit of nuance if you're selling internationally and so on.
• 8:49
  SPEAKER_01: Luckily, if you you're on a marketplace facilitator like Amazon or Etsy, they actually collect and remit that on your behalf, so you don't have to worry about that.
• 8:56
  SPEAKER_01: But um, I know Shopify sellers, for example, I some of our clients they get confused with that.
• 9:01
  SPEAKER_01: Shopify is not a marketplace facilitator, so um, that's where you kind of have to track your own sales tax.
• 9:06
  SPEAKER_01: And it gets even more confusing because you don't always need to only when you have a Nexus.
• 9:10
  SPEAKER_01: But I don't want to get into that.
• 9:19
  SPEAKER_00: Do I need to have Nexus in that state?
• 9:21
  SPEAKER_00: Is that something you guys do for all the e-commerce brands, or is there like some type of national thing that allows you to sell in all the states or followers?
• 9:31
  SPEAKER_01: Well, there's when you talk about Nexus, essentially what that means is a connection to a state.
• 9:36
  SPEAKER_01: And if you have that nexus in a state, that's when you actually have to start collecting and remitting sales tax from customers in that state.
• 9:42
  SPEAKER_01: And you bring up a good point with your employee because there's two ways that you can actually get this nexus.
• 9:47
  SPEAKER_01: Number one is physical.
• 9:48
  SPEAKER_01: So if you have a physical presence in a state, employees, warehouses, inventory, anything physical from your business in a certain state.
• 9:56
  SPEAKER_01: If you're in California and you have an employee in Missouri, like you mentioned, um that that's a nexus right there, and you have to start collecting sales tax.
• 10:02
  SPEAKER_01: The second part of that is an economic nexus.
• 10:05
  SPEAKER_01: So even if you have no physical presence in Iowa, whatever it might be, but you have enough transactions, enough sales within the past calendar year in that state, that's when you hit your economic nexus.
• 10:17
  SPEAKER_01: So for most states, it's about$100,000 worth in sales in the past 12 months, and then you have to start collecting about it.
• 10:24
  SPEAKER_00: Oh get out of here.
• 10:25
  SPEAKER_00: That threshold's interesting.
• 10:26
  SPEAKER_00: So as an e-commerce brand, if I sell in Texas, but I sell less than$100,000 in the calendar year, technically I don't have to file Nexus, but I'm still responsible for those taxes when you guys uh do the books essentially.
• 10:41
  SPEAKER_01: So technically, if you don't have a Nexus now, Texas, I mean, you know, everything's bigger in Texas, that threshold is actually$500,000 worth of sales.
• 10:50
  SPEAKER_01: So cool.
• 10:51
  SPEAKER_01: A lot more than the you know, your typical hundred thousand dollar.
• 10:53
  SPEAKER_01: Um, like in Illinois, I'm out of Chicago, it's$100,000.
• 10:56
  SPEAKER_02: Yeah.
• 10:57
  SPEAKER_01: Um, if you know it's funny you asked this because I've literally called probably like 10 to 15 states just with their talking with the Texas Department of Revenue, Illinois Department of Revenue, trying to figure this out because I mean in the US there's over 11,000 different tax jurisdictions.
• 11:11
  SPEAKER_01: So I mean, I don't care how good of an accountant you are, you're not gonna be able to do it.
• 11:15
  SPEAKER_02: Yeah, no way.
• 11:16
  SPEAKER_01: And that's where systems like tax, uh, certain softwares that we're gonna talk about, I'm sure um they help play in with this because I mean, if you could pay, you know, 30, 40, 50 bucks a month to get all this taken care of for you, then I mean, I don't understand why you wouldn't do that, right?
• 11:30
  SPEAKER_01: So um, but essentially, if you don't have a Nexus, technically you have no obligation, you're not required to collect sales tax from customers in those states.
• 11:39
  SPEAKER_01: So interesting.
• 11:40
  SPEAKER_01: Um, that's kind of yeah, broad.
• 11:42
  SPEAKER_01: So let's talk about this.
• 11:43
  SPEAKER_00: Yeah, didn't mean interrupt.
• 11:44
  SPEAKER_00: Let's talk about the sales.
• 11:46
  SPEAKER_00: So, what are some of the so you mentioned uh Nexus, which was really interesting?
• 11:51
  SPEAKER_00: Uh tax jar, QuickBooks, do they all do the same thing?
• 11:54
  SPEAKER_00: It's like once I it will know I'm an e-commerce brand, I'm on Shopify.
• 11:59
  SPEAKER_00: Yeah, it's tracking all the sales.
• 12:01
  SPEAKER_00: Does the bookkeeper or accountant need to look at it and say, oh, we passed the Nexus, or does this tax jar system will flag it and say, Hey, you economic, you guys need to start paying and collecting taxes?
• 12:12
  SPEAKER_00: Like, I guess how does uh how do you how would you manage that if we were working together?
• 12:17
  SPEAKER_01: Yeah, so I think that's that does tie into the importance of having an e-commerce specific account because, like I mentioned, with our previous client, the first client that we actually signed, I'm sure that guy, I mean, he has way more experience in the space than I do.
• 12:29
  SPEAKER_01: But if you're not specifically focused on e-commerce, there's so much that you can miss.
• 12:33
  SPEAKER_01: So I think as an e-commerce accountant, that's something that's you're responsible for keeping track of for your clients and understanding.
• 12:39
  SPEAKER_01: So, yeah, technically, if you use taxar is a software that it's dedicated specifically for sales tax.
• 12:44
  SPEAKER_01: So if you just hook up your sales channels and it tells you exactly how much sales tax and even how many sales you've gotten in each state.
• 12:50
  SPEAKER_01: Um, and I think that knowing how to use that as an e-commerce account accountant, that's something that can separate you from you know your from your everyday accountant.
• 12:57
  SPEAKER_01: So the cool thing with Taxture is it actually has a Nexus tracker.
• 13:01
  SPEAKER_01: So it has a little report that you can run.
• 13:03
  SPEAKER_01: Well, actually, it's it's pretty cool.
• 13:04
  SPEAKER_01: It's like a map, and then you click on the map and it shows you where you've approached your Nexus in a certain state.
• 13:09
  SPEAKER_01: So you could look at the map and say, okay, we have no presence in Florida, but we're at$100,000 worth of sales.
• 13:14
  SPEAKER_01: So it'll let you know, and that can help you prepare, you know, for your sales tax filings, um, because that's another thing you have to actually do is file your sales tax returns every certain amount of time.
• 13:24
  SPEAKER_01: So that's where Taxer steps in.
• 13:26
  SPEAKER_00: Yeah, pretty cool.
• 13:27
  SPEAKER_00: So I I know we went a little off uh topic.
• 13:30
  SPEAKER_00: It's like Nexus is something I hear a lot about with my accountants, and now I have a lot better understanding of why we pay Nexus.
• 13:36
  SPEAKER_00: Uh, but what are some of the more common mistakes?
• 13:38
  SPEAKER_00: You should have three or four.
• 13:39
  SPEAKER_00: I'd like to get those out before I I take us down another rabbit hole.
• 13:44
  SPEAKER_01: Yeah, for sure.
• 13:44
  SPEAKER_01: So I'll I kind of I'll try to give you know more of a broad overview because like I told you I'm an accounting nerd, I can talk about this stuff forever.
• 13:52
  SPEAKER_01: But um, basically another thing that we noticed when we were onboarding clients, especially if they're doing their own bookkeeping, is let's say you get your payouts from Shopify every couple days or whatever your payment setups are.
• 14:02
  SPEAKER_01: Um, if a lot of them can actually recognize that deposit as revenue for the business.
• 14:08
  SPEAKER_01: And that's incorrect because Shopify will only pay you after they take out all their payment fees, after they make the split between your actual shipping income and any sales income.
• 14:18
  SPEAKER_01: So if you're selling a product for 40 bucks, but you have another$5 of shipping income, that's something that you should be tracking separately on your profit and loss just to give you more information.
• 14:26
  SPEAKER_01: And then also, like I mentioned, the fees, Shopify fees, that deposit is a net of all those things: shipping income, sales income, any fees, sales tax as well.
• 14:36
  SPEAKER_01: Um, so you want to make sure that you have another software like WebGility, which I'm sure we're gonna talk about as well.
• 14:41
  SPEAKER_01: And it basically makes that distinction between you know, this is my revenue, this is my shipping income, this is how much I actually got paid out after fees and so on.
• 14:48
  SPEAKER_01: So um that deposit is a net amount, it's not your revenue that you should be tracking.
• 14:54
  SPEAKER_01: Um, and then in addition, I think this is super relevant right now is tracking your gross margin because obviously with tariffs nowadays, a lot of our clients they get inventory from China, and you know, obviously China they got hit, or the tariffs from China are pretty high.
• 15:09
  SPEAKER_01: So, what most e-commerce owners don't know is those tariffs, it's not just an expense for your business, they should actually be factored into the cost to get sold of all those items.
• 15:18
  SPEAKER_01: Um, so basically, if you have like I had the simple example, if you have five items at a thousand dollars each, pretty expensive items, but just for the example, and you're paying a five hundred dollar tariff on that, since each item makes up twenty percent of the total cost, so five times what one thousand equals five thousand, that one thousand dollar product is twenty percent of the total purchase, you have to allocate twenty percent of that tariff to the cost of that item as well, which increases your cost to get sold and decreases your margin.
• 15:45
  SPEAKER_01: So if you're not keeping track of that, then obviously your gross margin is gonna be higher than what it really should be and throw off your your pricing for your products as well.
• 15:52
  SPEAKER_01: Um, and then the last thing I would touch on is the fact that your net income does not equal cash in the bank because that's a good one.
• 16:00
  SPEAKER_01: That's yeah, that's kind of where your statement of cash flows and having an accountant that actually can understand all those financials comes in because your net income, I mean, think about it.
• 16:08
  SPEAKER_01: If you made technically$50,000 net income for the month, but you spent$30,000 on inventory for the month, obviously that$30,000 is not an expense on your profit and loss, it wouldn't show up in your net income, but it's still$30,000 that you spent in your bank account is$30,000 less.
• 16:24
  SPEAKER_01: So that's where you have to look at your statement of cash flows and really understand.
• 16:27
  SPEAKER_01: I made this much for the month, but why do I only have this much in my bank?
• 16:30
  SPEAKER_01: So that's kind of the yeah, what I would say the top three or four are um for for e-commer owners.
• 16:36
  SPEAKER_00: That's pretty.
• 16:37
  SPEAKER_00: So it's like Nexus and knowing when to pay taxes, it's uh understanding all your fees, right?
• 16:42
  SPEAKER_00: Because it sounds like a lot of sellers don't always understand what they're paying and how much they're paying.
• 16:47
  SPEAKER_00: Uh what was the third one?
• 16:49
  SPEAKER_01: Uh third one was actually accounting for tariffs in your cost of oh, accounting for tariffs in your pricing, and some really good tips there too.
• 16:55
  SPEAKER_00: Because obviously, like, well, I guess I'll state the obvious, but why would you want to show less profitability on your uh um on your net on your income statements?
• 17:05
  SPEAKER_01: Well, obviously you want to pay less tax, right?
• 17:07
  SPEAKER_01: So um you wanna, you know, that's that's kind of a fine line because you obviously you want to pay less tax, but you also want to understand how your business is performing.
• 17:16
  SPEAKER_01: So yeah, obviously everyone wants to pay less tax, but as an accountant, I'm not gonna tell you, you know, do this and you know, reduce the tax liability, right?
• 17:24
  SPEAKER_01: I would rather have you actually understand the numbers behind your business and then use those correct numbers as opposed to the incorrect numbers to make decisions as well.
• 17:32
  SPEAKER_01: So yeah, that's kind of where I'm at, you know.
• 17:34
  SPEAKER_00: And it makes a ton of sense that being in the marketing side, what I see it always surprised we've worked with some really large brands and them not knowing like their landed cost because it's just like yeah, that's the term actually, landed cost.
• 17:47
  SPEAKER_00: Yeah, that but sourcing in like there's so much that could go into it.
• 17:51
  SPEAKER_00: So I guess that's I I'd love to ask about that.
• 17:53
  SPEAKER_00: So more complicated products, like let's say I'm making um exotic supplements that have all these raw materials from all over.
• 18:01
  SPEAKER_00: How would uh a supplement brand, how do they manage all that cost of goods sold?
• 18:06
  SPEAKER_00: Do you guys track that um as part of bookkeeping?
• 18:10
  SPEAKER_00: Or like how does uh how does something like that factor into what you guys do?
• 18:15
  SPEAKER_01: Yeah, um, that's actually a good question because one of our clients, they're literally they manufacture their own supplement.
• 18:21
  SPEAKER_01: Um so when you when you think of e-commerce for the most part, you're thinking, okay, I source my inventory from China and then I resell it at a certain margin.
• 18:28
  SPEAKER_01: But they actually manufacture their own product, which is, you know, like I said, not your typical e-commerce.
• 18:33
  SPEAKER_01: Um, but that's when the cost to get sold gets a little bit more complicated because your cost to get sold when you're manufacturing products, it it depends on three things.
• 18:40
  SPEAKER_01: Number one is raw materials.
• 18:42
  SPEAKER_02: Yeah.
• 18:43
  SPEAKER_01: What is the actual cost of the raw materials that you use in manufacturing those products?
• 18:48
  SPEAKER_01: Number two is direct labor, because if you're paying, you know, factory worker, whatever on the on the in the in the factory 20 bucks an hour and they're spending X amount of hours producing that specific product, their salaries and wages shouldn't be included in the cost of that product as well.
• 19:03
  SPEAKER_01: And then the third part is variable overhead.
• 19:06
  SPEAKER_01: So obviously, if you're in a factory, you're gonna have utilities, you're gonna have lighting, gas, and so on.
• 19:11
  SPEAKER_01: You have to basically, I mean, this is this gets a lot more complicated than your typical e-commerce, but you have to basically take a portion of that total overhead cost with the utilities and so on, and then add that to the cost of your actual items as well.
• 19:24
  SPEAKER_01: So um in QuickBooks Online, that's the primary software that we use for our clients.
• 19:29
  SPEAKER_01: Okay, it's you know, it's it's not it's a bookkeeping software, it's not that complicated when you're you're not gonna be able to track direct labor, direct uh variable overhead and direct materials or raw materials as well.
• 19:41
  SPEAKER_01: Um, but luckily for us, since they're pretty small, they have someone, they have one person that does their um helps with their manufacturing.
• 19:48
  SPEAKER_01: So it's a lot easier, you know.
• 19:50
  SPEAKER_01: We mostly just count the raw materials and their cost to get sold.
• 19:53
  SPEAKER_00: So they're giving you the final cost, and then you just kind of put that across the the products appropriately, essentially, and then you're able to make sure we have uh uh accurate books essentially.
• 20:05
  SPEAKER_01: Yeah, exactly.
• 20:06
  SPEAKER_01: I mean, it it's a lot of communication with the client because they get super detailed.
• 20:10
  SPEAKER_01: I mean, they know exactly, you know, I'm putting 1.2 ounces of XYZ into this, and they keep track of all that cost.
• 20:15
  SPEAKER_01: Obviously, I can't keep track of that because I'm not in the factory, I don't know exactly how much is in there.
• 20:20
  SPEAKER_01: So that's kind of the communication between the client and the accountant really comes in.
• 20:25
  SPEAKER_01: Um, and whatever information they give me, that's kind of where we make the the entries into QuickBooks Online.
• 20:30
  SPEAKER_00: So beautiful.
• 20:31
  SPEAKER_00: And I did want to share that just so our listeners can understand like um uh it could get really complicated depending on if you're the manufacturer, a reseller, a brand owner, and there's all types of things uh or considerations as you're making sure you're profitable online.
• 20:49
  SPEAKER_00: Um my next question for somebody just starting their store, what are like the first three things they should set up in their bookkeeping systems uh to set themselves up for success?
• 20:59
  SPEAKER_00: And I know you mentioned a few software, so I'd love to if you call any of them out, tell us what they do.
• 21:05
  SPEAKER_01: Yeah, for sure.
• 21:06
  SPEAKER_01: Um, so number one is actually set up an accounting software, whether it's QuickBooks Online.
• 21:10
  SPEAKER_01: I mean, that's the one that we prefer because I mean, sorry, like a bread and butter, we work.
• 21:14
  SPEAKER_01: I mean, it's the most popular software out there, right?
• 21:16
  SPEAKER_01: Um, um I have talked to this company called Final Loop or Finaloop, I don't know exactly how you say.
• 21:21
  SPEAKER_01: I don't know if you have you heard of Finaloop?
• 21:23
  SPEAKER_00: No, I haven't heard of them, but yeah.
• 21:25
  SPEAKER_01: So it's basically QuickBooks, but it's specifically for e-commerce because they're made to integrate your sales channels and so on.
• 21:31
  SPEAKER_01: Having worked with them before, but I know that's something that we might be considering with you know future clients if we onboard, um, trying to try now find the loop and see whether it's worth it to make the switch.
• 21:41
  SPEAKER_01: But when I say set up QuickBooks online, there's two main things that I'm talking about.
• 21:45
  SPEAKER_01: Number one is basically setting up your chart of accounts.
• 21:48
  SPEAKER_01: Now, your chart of accounts is something, it's basically a list of all the accounts that you're gonna have on your profit and loss balance sheet and your main financials.
• 21:56
  SPEAKER_01: So things like inventory, sales of product income.
• 22:00
  SPEAKER_01: Refunds, discounts, all of those are items that you want to see on your profit and loss to give you more detail.
• 22:05
  SPEAKER_01: So when you're starting out, you're not even gonna know what a chart of accounts is, right?
• 22:09
  SPEAKER_01: So um as you make sales and you kind of understand where you're spending money, what types of expenses, what types of income you're having, that's when you can actually start adding specific chart of accounts.
• 22:18
  SPEAKER_01: And I'm not gonna lie, if you really wanted to, you can just go on ChatGPT, give me give me a sample chart of accounts template that I could use for my e-commerce business.
• 22:26
  SPEAKER_01: And that's something it'll help you uh give you the right information you need to input.
• 22:30
  SPEAKER_01: And then number two is actually uh setting up your bank and credit card accounts because in QuickBooks Online, the thing I really like about it um is that you can basically connect all your bank and credit cards, and every single transaction from those accounts gets automatically funneled into QuickBooks Online, and you just press the transaction, pick the account.
• 22:48
  SPEAKER_01: This was office expenses, whatever, and I paid it to Home Depot, whatever.
• 22:52
  SPEAKER_01: Um, and it's super easy just to you know categorize those transactions in your both your bank and credit cards.
• 22:57
  SPEAKER_01: So um I would say number one, set up QuickBooks Online, and then number two is I think we mentioned it before, but it's some e-commerce owners they have an issue getting their sales into QuickBooks Online just because of, I mean, if you're having a lot of volume of sales, you know, how do you actually connect QuickBooks Online to your sales channel?
• 23:16
  SPEAKER_01: So we use a special software called WebGility.
• 23:19
  SPEAKER_01: Um, I know A2X.
• 23:20
  SPEAKER_01: You've heard of it before?
• 23:21
  SPEAKER_01: Yeah, I know WebGil.
• 23:23
  SPEAKER_01: Yeah, yeah.
• 23:24
  SPEAKER_01: So A2X is another competitor out there.
• 23:26
  SPEAKER_01: We we've just used WebGility since the beginning and we've liked it.
• 23:29
  SPEAKER_01: So um, but that basically helps you connect um your sales channels, Shopify, Amazon, Etsy, wherever you're selling on to QuickBooks Online.
• 23:37
  SPEAKER_01: And the thing I really like about it is it automatically, once you go through the setup process, it automatically maps all of your accounts to the specific chart of accounts that I just told you to set up in QuickBooks Online.
• 23:48
  SPEAKER_01: Um, so that's where you know that chart of accounts comes into play because you know agility is gonna have an option.
• 23:53
  SPEAKER_01: It's gonna say, where do you want sales mapped to in QuickBooks Online?
• 23:57
  SPEAKER_01: You want it mapped to the sales account, where do you want refunds mapped to, refunds, and so on.
• 24:00
  SPEAKER_01: So you just want to basically match the two accounts between agility and QuickBooks Online.
• 24:04
  SPEAKER_01: And the cool thing with that is that it keeps track of your inventory as well.
• 24:08
  SPEAKER_01: So anytime you get a sale, anytime you um get a sale, and then you you obviously, for example, you reduce your inventory by one, that's going to be tracked inside of QuickBooks Online as well.
• 24:18
  SPEAKER_01: So you have up-to-date inventory numbers in QuickBooks Online.
• 24:20
  SPEAKER_01: So if you want to go look at QuickBooks Online and see how much of this specific item do I have right now, you could do that with WebGoity importing all those transactions.
• 24:29
  SPEAKER_00: I like that it connects it too, because I know if uh from somebody who had the cleanup years of uh statements uh from when we got a real bookkeeper, uh it could be painful.
• 24:39
  SPEAKER_00: But once it's set up and a lot of that's automated, at this point, our bookkeeper calls internally, it's like a 15-minute call for like one-off uh payments.
• 24:48
  SPEAKER_00: So I'm sure it makes it just as easy for your e-commerce brands.
• 24:51
  SPEAKER_00: Once you set up WebGelity and you have the the tagging or the category categorization set up, I'd imagine it, you know, you still need a bookkeeper, somebody still needs eyes on it, but yeah, makes it a little easier on you guys, correct?
• 25:04
  SPEAKER_01: Yeah, I mean, I think we talked about this before, but you you can have you know all this AI automation done for you, but you still need someone looking over.
• 25:13
  SPEAKER_01: And the thing that you know, QuickBooks Online has an auto-add feature where you can set this categorization and have it automatically add your all those categorized transactions into the books without me even looking at it.
• 25:27
  SPEAKER_01: I never do that because I'm just as an accountant, I'm super picky.
• 25:30
  SPEAKER_01: I want to make sure that these transactions, okay, they're probably 95% right.
• 25:34
  SPEAKER_01: But that 5% that's wrong, I don't want to get that wrong for my client, you know.
• 25:38
  SPEAKER_01: So I want to double check, make sure that I actually have eyes on it, and I know at this point with all my clients, I know exactly what I'm looking out for, where each transaction should go to, and then I can give that final confirmation.
• 25:49
  SPEAKER_01: Um, so yeah, that's you're right.
• 25:50
  SPEAKER_01: You do need eyes on it, even if it's pretty automated for you.
• 25:53
  SPEAKER_00: And you just brought something up.
• 25:55
  SPEAKER_00: I'd love uh for our audience, because we have a uh a wide variety of business owners at different phases of their journey.
• 26:01
  SPEAKER_00: Can you just tell me like what a bookkeeper, what exactly is their role?
• 26:06
  SPEAKER_00: When do I need an accountant?
• 26:08
  SPEAKER_00: When do I need a CFO?
• 26:10
  SPEAKER_00: Are there growth markers for these e-commerce brands?
• 26:13
  SPEAKER_00: But like specifically, like what are their jobs and how do they work?
• 26:17
  SPEAKER_00: How did how does the finance side work together?
• 26:20
  SPEAKER_01: Yeah, so I think that's a good point because when I talk to e-commerce owners or business owners in general, to them, CFO, account, and bookkeeper, it's all the same thing.
• 26:28
  SPEAKER_01: But I think that's it is to me too.
• 26:30
  SPEAKER_00: So that's what I'm asking.
• 26:32
  SPEAKER_01: Yeah, so it's important that we make this distinction because your bookkeeper, you know, when you think of bookkeeper, you it's typically someone sitting in QuickBooks Online, they're categorizing all your transactions, they're reconciling your accounts to make sure that QuickBooks Online matches up to your bank statements.
• 26:46
  SPEAKER_01: Um for us, for example, we're also producing monthly financial statements uh for our clients.
• 26:51
  SPEAKER_01: So we send out statement of cash flows, balance sheet, profit and loss.
• 26:54
  SPEAKER_01: Those are the minimum three that you should be looking at.
• 26:56
  SPEAKER_01: And then depending on client needs, we can add some reports as well.
• 26:59
  SPEAKER_01: But basically taking care of the day-to-day back-end stuff that all the businesses need.
• 27:04
  SPEAKER_01: Um, and then we usually, when I hear accountant, people are thinking taxes, right?
• 27:08
  SPEAKER_01: So that's the distinction between us as bookkeepers and your potentially your tax accountant.
• 27:13
  SPEAKER_01: Um, obviously I work at Deloitte, so that's kind of the goal long term to get into the tax consulting, tax compliance side of thing.
• 27:20
  SPEAKER_01: Um, but typically your bookkeeper, they're not gonna be touching anything with tax, they just take care of everything on the back end, and then you would offload that work to CPA or enrolled agent.
• 27:29
  SPEAKER_01: Those are, you know, CPA, everyone knows what a CPA is.
• 27:32
  SPEAKER_01: So um they're typically the ones that are taking care of your tax returns for you.
• 27:37
  SPEAKER_01: Um, and then the CFO, that's that's a good one because usually as accountants, we're focused on everything in the in the past.
• 27:43
  SPEAKER_01: You know, what happened this month, what happened this year, how are we gonna report this?
• 27:47
  SPEAKER_01: CFOs, as the you know, chief financial officer, you you should have a good accounting background to understand the financials, do they make sense month over month?
• 27:54
  SPEAKER_01: But you're also gonna be looking a little bit more to the future.
• 27:57
  SPEAKER_01: You're gonna be trying to set budgets, set forecasts, um, that sort of thing, and trying to help predict what is cash flow gonna be like in the next couple months.
• 28:05
  SPEAKER_01: Do we have enough cash to invest in inventory, try out this new vendor and so on?
• 28:09
  SPEAKER_01: So that's kind of the distinction between your accountant bookkeeper and then your CFO.
• 28:14
  SPEAKER_01: That's a good question, yeah.
• 28:15
  SPEAKER_00: Yeah, Arthur, thanks for breaking that down too.
• 28:17
  SPEAKER_00: That's helpful.
• 28:18
  SPEAKER_00: So I'm gonna spit it back at you to make sure I understand it.
• 28:21
  SPEAKER_00: But your bookkeeper on the ground, they're making sure everything matches and it's good for taxes and for your accountant.
• 28:27
  SPEAKER_00: Your I love this analogy.
• 28:29
  SPEAKER_00: Your accountant is backwards looking.
• 28:31
  SPEAKER_00: So they're looking at the year and they're like, yep, this is what you owe the man.
• 28:34
  SPEAKER_00: This you're profitable, whatever.
• 28:36
  SPEAKER_00: Like, this is your this is the healthier business, essentially.
• 28:39
  SPEAKER_00: Yeah, the CFO, they're more forward thinking.
• 28:43
  SPEAKER_00: So they're gonna they're looking at investments and uh future cash flow and like how we can be strategic to get to whatever our business goal is for that year, quarter, whatever.
• 28:54
  SPEAKER_01: Yeah, exactly.
• 28:55
  SPEAKER_01: Just looking backwards versus looking forward.
• 28:58
  SPEAKER_01: And I do think that, you know, if you you have that both an accounting background plus the CFO background or just finance background in general, I think that's where you know an accountant can really level up their skills and you know, not just tell you what happened in the past, but also help you uh looking forward as well.
• 29:14
  SPEAKER_01: So um, that's something that we are.
• 29:16
  SPEAKER_01: I mean, we're doing a bit of cash flow forecasting for clients that's you know a bit of a different ball game than your typical uh accounting.
• 29:22
  SPEAKER_01: Like we when it comes to accounting and bookkeeping, we'll take care of you no issue.
• 29:26
  SPEAKER_01: But cash flow forecasting, you know, looking into the future.
• 29:28
  SPEAKER_01: That's why you see all these guys on Wall Street, you know, if they get it wrong 99% of the time, it's fine.
• 29:33
  SPEAKER_01: But that one percent of the time they get it right, it's the jackpot, you know.
• 29:36
  SPEAKER_01: So yeah, that's kind of uh you know the difference between the two of them.
• 29:39
  SPEAKER_00: That's pretty cool.
• 29:40
  SPEAKER_00: I like the Wall Street too.
• 29:41
  SPEAKER_00: You're right.
• 29:42
  SPEAKER_00: You only need to get it right once, and that's it.
• 29:44
  SPEAKER_00: You'll be buying that Cameron Island somewhere.
• 29:47
  SPEAKER_00: Yeah, awesome.
• 29:49
  SPEAKER_00: Well, we covered a whole bunch.
• 29:50
  SPEAKER_00: I do have a few more questions, and I know we're tight on time, so I'm gonna pick up the best ones from this.
• 29:55
  SPEAKER_00: So you mentioned cash flow, cash flow is king.
• 29:58
  SPEAKER_00: How should e-commerce founders think about cash flow differently from maybe a traditional brick and mortar business?
• 30:04
  SPEAKER_01: Yeah, I mean, you're right, cash flow is king, and the reason for that is because you know, if you're a service-based business, for example, you're not investing thousands, tens of thousands, maybe even hundreds of thousands of dollars in inventory at a single time.
• 30:18
  SPEAKER_01: Obviously, there's different complications with service businesses, but when it comes to e-commerce, especially if you're gonna be buying from China, Vietnam, one of these you know, countries um that's you know not necessarily local to you, you're gonna be waiting a month, two months, three months.
• 30:32
  SPEAKER_01: I mean, I've I've had clients that wait six months for their inventory from the time they put in their purchase order to when they can actually get a return on their money.
• 30:39
  SPEAKER_01: So um, that's the thing with inventory.
• 30:41
  SPEAKER_01: If you're gonna be spending thousands of dollars on inventory, you might literally have to wait six months in order to get your first dollar back, right?
• 30:48
  SPEAKER_01: Um, so that's kind of where you have to analyze your cash flow.
• 30:51
  SPEAKER_01: You have to understand, okay, this is our net income.
• 30:54
  SPEAKER_01: This is how much cash we actually have.
• 30:56
  SPEAKER_01: Will we have enough cash until we get that return on investment, that one dollar, that first dollar we can get back after six months.
• 31:03
  SPEAKER_01: So it's basically analyzing your financials and saying, do I have enough cash to keep myself afloat until I get all this inventory back on hand?
• 31:10
  SPEAKER_01: And then obviously keep the sales going.
• 31:12
  SPEAKER_01: And um, I mean, you know the importance of having inventory hand on hand, not just because of that one item, but because if you lose that one item, you could lose an entire order.
• 31:21
  SPEAKER_00: Oh, yeah.
• 31:22
  SPEAKER_01: So I'm sure you have some good experience with that.
• 31:24
  SPEAKER_00: But yeah, definitely.
• 31:25
  SPEAKER_00: You could you could fall behind on like all your marketing work too.
• 31:27
  SPEAKER_00: So all your at least on marketplaces.
• 31:30
  SPEAKER_00: So uh we hate running out of inventory.
• 31:32
  SPEAKER_00: Uh, but it's it's so you do the financial forecasting.
• 31:34
  SPEAKER_00: Do you do demand forecasting as part of it?
• 31:36
  SPEAKER_00: Do you help them?
• 31:37
  SPEAKER_00: Like, is there predictive analytics that's part of because for forecasting is hard.
• 31:42
  SPEAKER_00: I do it a lot in advertising.
• 31:44
  SPEAKER_00: So I'd love to hear your perspective based on your experience.
• 31:48
  SPEAKER_01: Yeah, and I think there's two ways that I I could talk about this because number one, obviously, understanding QuickBooks Online and the reports that they have, um, yeah, you know, it's it's good to have the reports, but if you don't understand how they work and you can't explain it to a client, that's where the issues, um, not necessarily issues, but you know, there's no added value as an accountant there.
• 32:07
  SPEAKER_01: So um, what we like to do for some clients as well, if if they're worried about um demand forecasting, is you can literally just go pull the sales by product or service report in QuickBooks Online and analyze your performance of each specific item over time.
• 32:20
  SPEAKER_01: And what we like to do as well is that the second part is actually comparison reports.
• 32:25
  SPEAKER_01: So every single month, you know, with e-commerce, obviously there's uh waves, down ups and downs when it comes to your sales, because if you're selling during the Christmas time, New Year's, obviously you're gonna get a big spike.
• 32:36
  SPEAKER_01: So when we're reporting to clients, we don't necessarily report here's November versus December.
• 32:42
  SPEAKER_01: What we like to do is say this is December 2025 versus December 2024.
• 32:47
  SPEAKER_01: And that gives you more of a you know apples to apples comparison because even if you're killing it in 2025, maybe your December month in 2024 just because of the holiday season, it might be better than you know November 2025.
• 32:59
  SPEAKER_01: So I think that's important that you actually understand the reports that you have, and then you can actually explain that to clients.
• 33:05
  SPEAKER_01: So that's something that we do as well.
• 33:06
  SPEAKER_00: That's a really good point, and it's definitely something to consider.
• 33:09
  SPEAKER_00: It's like uh, because we'll we'll look at month over month data, but year over year is more accurate because it eliminates seasonality.
• 33:15
  SPEAKER_00: So no surprise, October is not going to be as well as November, December, due to you know, depending on the product.
• 33:21
  SPEAKER_00: But yeah, that makes a ton of sense.
• 33:23
  SPEAKER_00: Um, what what role do tools like QuickBooks Online and integrations with Shopify, Amazon play in simplifying bookkeeping for online sellers?
• 33:33
  SPEAKER_00: So, how does all this software, your software suite, how does it make e-commerce sellers' lives a lot easier?
• 33:40
  SPEAKER_01: Yeah, well, if you're gonna be the one that's doing your own bookkeeping, I mean, I uh 100% recommend having a software like QuickBooks Online because I know some business owners they if you're super small, maybe it makes sense, but you just have an Excel sheet.
• 33:54
  SPEAKER_01: Um, but I mean the way I see it is, you know, QuickBooks Online, depending on the subscription you get, you're gonna need inventory tracking, which is about a hundred bucks a month total for QuickBooks Online.
• 34:05
  SPEAKER_01: I see that as an investment because I mean you could literally do everything from your business A to Z in terms of accounting, you know, categorize transactions, reconcile accounts, run the reports that you use to make decisions on your business every single month.
• 34:18
  SPEAKER_01: And like I said, if I think that's a simple investment to make because unless you're some Excel wizard, which I'm pretty good at Excel, but you know, if if we have a client that refuses to go on QuickBooks Online, and I know other accountants are like this as well, we just won't work with them because that's what we spent our time learning.
• 34:36
  SPEAKER_01: That's what we know gets our clients the best results.
• 34:38
  SPEAKER_01: Um, and just having that ability to actually have a software that can take care of it all for you is just I mean 100 bucks a month for that.
• 34:46
  SPEAKER_01: It's an investment in your business.
• 34:48
  SPEAKER_01: So um that I mean, obviously with our clients, our goal is they don't even have to touch QuickBooks Online or anything like that.
• 34:54
  SPEAKER_01: It's basically hands-off.
• 34:56
  SPEAKER_01: You know, every single month there might be a new transaction or vendor that we have to confirm with them, like one-off transactions, like you mentioned previously, um, with your bookkeeper.
• 35:04
  SPEAKER_01: Uh, but yeah, I mean, especially with the volume of transactions, the complexity of e-commerce with sales tax, shipping income, all those different splits, refunds, discounts.
• 35:13
  SPEAKER_01: I I don't see how you could do it without a software, like QuickBooks Online and WebGility integrated, because yes, it might cost you a couple hundred bucks a month, but it'll literally save you hours every single month.
• 35:22
  SPEAKER_00: So time your money, right?
• 35:24
  SPEAKER_00: And I uh I'll just QuickBooks.
• 35:26
  SPEAKER_00: I'm in a lot of agency owner groups.
• 35:28
  SPEAKER_00: I've worked with a lot of e-cards.
• 35:29
  SPEAKER_00: QuickBooks sounds like it's probably the easiest to pick up, and there's so many accountants and bookkeepers that have experience, so it seems like it's probably the easiest and most cost-effective one to pick up and get help when you're ready to hire for help for sure.
• 35:44
  SPEAKER_00: Um I got one more question.
• 35:46
  SPEAKER_00: I want to get a little more uh a little more detailed, kind of for some of our more advanced uh sellers on here.
• 35:53
  SPEAKER_00: Um so with that being said, how can e-commerce operators use their PL and balance sheet to make smarter investments, whether it's through advertising or inventory decisions?
• 36:04
  SPEAKER_01: Yeah, so a lot of this is it does tie into marketing, for example, because when you're looking at, okay, this was my advertising spend for the month, what was my actual cost of acquiring a customer?
• 36:14
  SPEAKER_01: Now, as an accountant, I'm not gonna be that marketing guy and tell you this is the exact metrics that you can that you should be looking out for in your you know lifetime value versus cost of acquisition.
• 36:23
  SPEAKER_01: But what we do help you as accounts, and if you don't have an accountant, you could analyze yourself, is actually tracking your return on your advertising.
• 36:30
  SPEAKER_01: Because obviously, if you're spending more on ads, social media marketing, whatever it might be, you're hoping to see that revenue number go up for you as well.
• 36:38
  SPEAKER_01: Um, so actually understanding how much you spent versus how much that's gotten back to you, I think that's super important.
• 36:44
  SPEAKER_01: And um, as much as I'd love to give you, you know, specific numbers when it comes to the marketing, what you you know, your average should be.
• 36:51
  SPEAKER_01: Um, I'm not a marketer, I'm an accountant.
• 36:53
  SPEAKER_01: So that's I think where the marketers and accountants can kind of go hand in hand and work with each other because I mean you have all the metric.
• 36:59
  SPEAKER_01: You have your ROS return on ad spend, you know exactly how many new leads you got as a marketer.
• 37:04
  SPEAKER_01: Um, but that's something that I think accountants can play a supplemental role and kind of explain to you this is how much you spent, and this is the growth compared to the previous month where you only spent this much as well.
• 37:16
  SPEAKER_01: So um, I think if hopefully that answers your question because I'm no marketer, but you know, I can explain the numbers to you as well.
• 37:24
  SPEAKER_01: So yeah, that's the the main uh kind of task is of an accountant, I would say.
• 37:29
  SPEAKER_00: This uh it seems like uh marketing and finance in general, accounting bookkeeping need to work hand in hand in my experience owning a business as well as working with a lot of these businesses.
• 37:38
  SPEAKER_00: Uh finance approves budgets, and a lot of times when we're uh pitching budgets, we're pitching a return with the budget.
• 37:46
  SPEAKER_00: So a lot of times it's like, give us this, and we think we can do this.
• 37:49
  SPEAKER_00: And that exactly that's generally how we work together.
• 37:52
  SPEAKER_00: Uh, one last question, and I want to talk about S and G bookkeeping.
• 37:56
  SPEAKER_00: How do you feel about debt?
• 37:57
  SPEAKER_00: So I know that as a business owner, you know, there's lots of ways to think about cash flow and financing.
• 38:04
  SPEAKER_00: What are your opinions about business owners who maybe use debt as a way to get inventory or to get started, or they're willing to take on debt in general?
• 38:14
  SPEAKER_00: Do you have any advice or how do you look at it from a bookkeeping uh perspective?
• 38:20
  SPEAKER_01: This is an interesting one because we have clients that one of our clients literally just took out like a$50,000 loan, which is huge for them.
• 38:27
  SPEAKER_01: I mean, that's like I saw they told me they took out a loan, I thought five, ten thousand dollars, and then they fifty thousand dollars, which for some sellers is nothing.
• 38:35
  SPEAKER_01: You know, if you're a seven, eight-figure seller, high seven figures, it's nothing for you.
• 38:39
  SPEAKER_01: But for them, they're kind of a uh mid-six figure, so that was a pretty big loan for them.
• 38:44
  SPEAKER_01: And then I have another seven-figure client that say they will never take loans, they will never take that out because um they had some sort of issue before we even started working with them, but essentially they they just hated being on the hook for money that wasn't theirs.
• 38:58
  SPEAKER_01: Um, so it that kind of gives me those two perspectives on on the on the situation because I think it depends on your business.
• 39:05
  SPEAKER_01: If you're in a small, if you're in that scale phase where you just need inventory, you need to invest in marketing, grow your business.
• 39:10
  SPEAKER_01: I think it makes sense for you.
• 39:12
  SPEAKER_01: Um, and for them, for the smaller clients that I just mentioned, I I do think it makes sense for them because if it allows you to get all the inventory you need, um, and you you have kind of a safeguard, obviously you're gonna be paying interest on that debt.
• 39:24
  SPEAKER_01: Um, but for now, you're you're basically funneling your scale, uh, you're funneling your growth.
• 39:29
  SPEAKER_01: And I think for them it's working.
• 39:31
  SPEAKER_01: I mean, they've their sales have been crazy over the past, I mean, compared to just a couple months ago.
• 39:35
  SPEAKER_01: Um, so I think in that case, it does make sense.
• 39:38
  SPEAKER_01: But it depends on your your view as an entrepreneur as well.
• 39:43
  SPEAKER_01: Because if if it's not it's not something that you're willing to invest heavily in and take the risk, if you've already got a business that you're comfortable with, obviously we want to keep growing.
• 39:52
  SPEAKER_01: The way I see it is you know, Mosey talks about it.
• 39:54
  SPEAKER_01: If you're stagnant, you're dying, right?
• 39:55
  SPEAKER_01: So you always want to be growing.
• 39:57
  SPEAKER_01: Yeah, um, but obviously, I mean, if you if you have wife and kids and stuff, mortgage you got to pay, you know, that there's a lot of other things that you have to take into consideration.
• 40:06
  SPEAKER_01: But I think that if you're at a position where you're ready to scale and you have the infrastructure set up, you have your products dialed down, you have your marketing plan set up, um, then I do think it makes sense to take on debt for your business.
• 40:17
  SPEAKER_00: I like it.
• 40:18
  SPEAKER_00: And yeah, are there any?
• 40:19
  SPEAKER_00: So uh uh my experience with debt, it varies, but um, we've taken on debt for hiring and stuff.
• 40:25
  SPEAKER_00: Um, and uh we use lines of credit.
• 40:27
  SPEAKER_00: So any advice to entrepreneurs seeking uh financing, lines of credit are great because you don't pay interest unless you take it out.
• 40:34
  SPEAKER_00: Um so you can have cash available without actually having to swipe a credit card.
• 40:39
  SPEAKER_00: And then the uh other thing to be aware of, I've worked with entrepreneurs that took out predatory loans with like super high interest rates, you start paying right away, which is pretty crazy.
• 40:50
  SPEAKER_00: And I've seen that cause a lot of issues, as well as I've seen uh sellers take on big loans for inventory and not actually be able to move it and cost them high storage fees and all types of issues.
• 41:03
  SPEAKER_00: So, to your point, debt can be crazy.
• 41:06
  SPEAKER_00: And I think as an entrepreneur, we are accustomed to a little risk, but they're there are good things with debt, and there are ways uh to be cautious.
• 41:14
  SPEAKER_00: But anything to add to that, I'm sure you've seen entrepreneurs put themselves in sticky situations.
• 41:19
  SPEAKER_00: Sometimes you get desperate when you need cash.
• 41:21
  SPEAKER_01: Yeah, yeah.
• 41:22
  SPEAKER_01: I mean, I will say, like, for example, one of our clients, the client that I just mentioned that took a$50,000 loan, um their their loan is to Shopify, so they have Shopify capital loan.
• 41:33
  SPEAKER_01: So I think that having that, and the thing I do like about that is it's not a predatory loan, obviously.
• 41:38
  SPEAKER_01: Um, but you basically pay that off as you go.
• 41:41
  SPEAKER_01: So the more sales, I think it's about 10%, and they take out 10% of all your sales, which I think is, I mean, if you're selling on Shopify, that's something that's it's tailored for smaller businesses as well, because you'll you'll pick it take a little bit longer to pay off, but you're still only paying off as you get sales, so it's not putting you in a in a difficult position to repay that and you know take desperate measures.
• 42:02
  SPEAKER_01: Um, but yeah, I mean, as an accountant, I I do think obviously it comes down to your cash flow.
• 42:07
  SPEAKER_01: Will you have enough cash to pay off that that extra interest payments?
• 42:10
  SPEAKER_01: And that's something that you should talk about with your accountant because um, you know, interest, it's it can be dangerous, you know.
• 42:17
  SPEAKER_00: So yeah, it can, it totally can.
• 42:19
  SPEAKER_00: But there's two sides.
• 42:20
  SPEAKER_00: That's what I thought was interesting.
• 42:21
  SPEAKER_00: And you gave a great example.
• 42:22
  SPEAKER_00: There's the on I've worked with entrepreneurs who are like, never, I never take out any debt.
• 42:27
  SPEAKER_00: And other entrepreneurs are like, Yep, um, I'm this much in the hole, and I don't care.
• 42:31
  SPEAKER_00: It's just normal ebbs and flows.
• 42:33
  SPEAKER_00: So yeah, uh, it's just it's really interesting.
• 42:36
  SPEAKER_00: People have very I feel like you have a Dave Ramsey camp where it's like save everything, and then you get more Alex and Mosey who's like, if you can burn it, burn it, it'll make you more money in the long run.
• 42:46
  SPEAKER_00: So uh I I love getting the accounting perspective.
• 42:49
  SPEAKER_00: So thank you for that.
• 42:50
  SPEAKER_00: That was interesting.
• 42:51
  SPEAKER_00: Uh all right, uh, we covered a lot and we're running out of time, but I do want to talk about SNG bookkeeping.
• 42:56
  SPEAKER_00: So real I love to talk about onboarding.
• 42:58
  SPEAKER_00: So I'm an e-commerce brand, I'm a supplement, I'm whatever I am.
• 43:02
  SPEAKER_00: Yeah, I'm coming to work with you guys.
• 43:04
  SPEAKER_00: What do the first 90 days look like?
• 43:05
  SPEAKER_00: Like what what do you what do we do together?
• 43:08
  SPEAKER_00: What do you take me through?
• 43:09
  SPEAKER_00: How do you learn about my business and kind of what does that experience look like?
• 43:13
  SPEAKER_01: Yeah, so good question.
• 43:15
  SPEAKER_01: So obviously, number one is we have an onboarding call.
• 43:18
  SPEAKER_01: So once you know we get the engagement letter signed, HCH, you know, protect both parties, yeah, the legal stuff we have to take care of that, of course.
• 43:24
  SPEAKER_01: Uh, but we have an onboarding call because during the essentially the sales call, we run a free audit for clients, and then that kind of helps us show any issues that they might be having inside their books.
• 43:34
  SPEAKER_01: And that does help us learn the business.
• 43:36
  SPEAKER_01: But I mean, like I mentioned, e-commerce, there's so many complexities that it does take a little bit longer for us to just sit down and understand what types of needs they have in terms of accounting, what types of sales channels do they have, are they tracking their sales tax liability and so on.
• 43:50
  SPEAKER_01: So that call, it's about 30 to 45 minutes, could be even longer depending on the complexity, but that just helps us actually understand what we need to do.
• 43:57
  SPEAKER_01: And then we have an onboarding checklist.
• 43:59
  SPEAKER_01: So, I mean, it's Pretty standard for e-commerce.
• 44:01
  SPEAKER_01: We need access to your sales channels, bank accounts, credit cards, QuickBooks Online, obviously.
• 44:06
  SPEAKER_01: Um, any lines of credit that you might have, we need access to all that to help us do the monthly bookkeeping.
• 44:11
  SPEAKER_01: So it's pretty streamlined.
• 44:13
  SPEAKER_01: You just give us access to that.
• 44:14
  SPEAKER_01: And then after that, like I mentioned, we try to have this hands-off.
• 44:18
  SPEAKER_01: We don't want the e-commerce owner touching QuickBooks Online.
• 44:21
  SPEAKER_02: Right.
• 44:21
  SPEAKER_01: And this this first couple of days is depends if they need a cleanup.
• 44:25
  SPEAKER_01: If they've been keeping their books clean, obviously that makes it a lot easier for us to just pick off where they left off and then keep going.
• 44:31
  SPEAKER_01: But I have noticed almost every client that'll be on board, they're gonna need to clean up because either they they were trying to do their own books and they have no idea what they're doing, or their previous accountant was doing it, but they're not an e-commerce accountant, so that's when they need to clean up.
• 44:44
  SPEAKER_01: So our goal in that case, where you need a cleanup, is we try to get you a first win.
• 44:49
  SPEAKER_01: So let's say we're cleaning up since the beginning of 2025.
• 44:52
  SPEAKER_01: What we like to do is we're gonna send, we're gonna get your beginning balances as of January 1st, 2025.
• 44:57
  SPEAKER_01: That's super important because I know it's kind of technical accounting, but if your numbers as of January 1st, 2025 are incorrect, on your balance sheet.
• 45:06
  SPEAKER_01: Exactly.
• 45:07
  SPEAKER_01: Literally every single number after that will be incorrect.
• 45:09
  SPEAKER_01: So we need to get those beginning balances set correctly.
• 45:12
  SPEAKER_01: And then within 10 days, we send you a full financial analysis of that first month.
• 45:17
  SPEAKER_01: So January.
• 45:17
  SPEAKER_01: So we're gonna send you statement of cash flows, balance sheet, profit and loss, and any other reports that you might be wondering about.
• 45:23
  SPEAKER_01: We're gonna send that to you within 10 days so you can actually see what type of work we do.
• 45:28
  SPEAKER_01: And then based on your needs, you can give us suggestions that we'll implement going forward as well.
• 45:32
  SPEAKER_01: So we just, you know, we want to give quick wins as soon as possible.
• 45:36
  SPEAKER_01: And once we have that first month down, you're gonna notice that it's pretty consistent month to month.
• 45:41
  SPEAKER_01: Obviously, there's a couple transactions and vendors that might be pretty new, but that'll let us once we get that first month down and cleaned up, that's gonna allow us to clean the rest of them much faster than that 10 days.
• 45:51
  SPEAKER_01: So um it does obviously come with communication with the client, understanding how they want because there's, I mean, if you have one transaction can be categorized three different ways by clients depending on their needs.
• 46:02
  SPEAKER_01: Um, so for example, if you want like free products given away, is that just uh a part of your cost of goods sold that you want it?
• 46:08
  SPEAKER_01: Do you want it as a marketing expense?
• 46:10
  SPEAKER_01: Because you know you're using those free products to get your name out.
• 46:13
  SPEAKER_01: So for our clients, it's typically a marketing expense.
• 46:16
  SPEAKER_01: Um, but that's something that just nuance client to client.
• 46:19
  SPEAKER_01: So depending on that, we'll make adjustments.
• 46:21
  SPEAKER_01: And then going forward every single month, it's just you know, you're gonna get your financials within seven days.
• 46:26
  SPEAKER_01: Um, that's kind of where we try to set ourselves apart because the typical client or accountant is gonna send it out within 15 days.
• 46:33
  SPEAKER_01: As long as you communicate with us on time, we'll get it sent out in half the time, a little bit less than half, um, with all the reports that you need.
• 46:40
  SPEAKER_01: Um, and then any questions, of course, just talk to us, let us know.
• 46:43
  SPEAKER_01: Yeah, and we'll get that.
• 46:44
  SPEAKER_00: That sounds like you guys are really boutique.
• 46:46
  SPEAKER_00: So uh it sounds like you tailor the experience based on the customers' needs, including the different reports they might need compared to, you know, uh you know, somebody who's making a manufacturer making shampoo might be different from somebody sourcing dog treats, right?
• 47:02
  SPEAKER_01: Yeah, exactly.
• 47:03
  SPEAKER_00: Beautiful.
• 47:04
  SPEAKER_00: And uh if do I work directly with you?
• 47:06
  SPEAKER_00: Do we work with your team?
• 47:08
  SPEAKER_00: Like what is uh who who who do we work with at S and G?
• 47:11
  SPEAKER_01: Um, so at S and G, it's my partner Daniel and I.
• 47:14
  SPEAKER_01: So you're right.
• 47:15
  SPEAKER_01: We're I mean we're boutique.
• 47:16
  SPEAKER_01: Um, and the reason we're able to do that is because we focused our niche down e-commerce.
• 47:21
  SPEAKER_01: So I have a pretty, you know, I know I'm gonna have to do this, this, this, this, this for you.
• 47:26
  SPEAKER_01: And that that's the you know, the riches are in the niches, right?
• 47:28
  SPEAKER_01: So if you can get that streamlined process, that makes it a lot easier doing the books for different clients month to month.
• 47:34
  SPEAKER_01: Um me and Dan get your books.
• 47:37
  SPEAKER_00: Dream team, guys.
• 47:38
  SPEAKER_00: I like it, I like it.
• 47:40
  SPEAKER_00: All right, I got my final question for you before I let you go.
• 47:42
  SPEAKER_00: And this was really uh really interesting.
• 47:44
  SPEAKER_00: We went, we talked about Nexus, we talked about taxes, I got some good tips, even financing.
• 47:49
  SPEAKER_00: So I know you mainly only do bookkeeping and accounting, but we did cover a lot today.
• 47:53
  SPEAKER_00: So hopefully my audience feels uh the same way.
• 47:56
  SPEAKER_00: But I do like to ask you to pull out your crystal ball and talk about the future of e-commerce and technology.
• 48:02
  SPEAKER_00: So, with that being said, as automation and AI continue to shape accounting tools, how do you see technology changing the future of bookkeeping for e-commerce founders over the next year or two?
• 48:13
  SPEAKER_01: Yeah, I know we touched on this before the podcast, but I I think that you know, everyone, I'm an accountant, so I'm in the accounting space, and everyone's telling me, dude, why are you an accountant?
• 48:24
  SPEAKER_01: You know, in five years it's gonna be a debt industry because of AI.
• 48:27
  SPEAKER_01: And I tell them, listen, I mean, AI can do a lot of stuff.
• 48:30
  SPEAKER_01: Don't trust me, I've tried to do some tax research with Chat GPT, it doesn't work.
• 48:35
  SPEAKER_01: Um, especially now with Trump's big beautiful bill, 800 UK tax code, it's not gonna help you, right?
• 48:41
  SPEAKER_01: So the the thing with AI that I I mean, I use AI um day to day for business.
• 48:47
  SPEAKER_01: And the thing that I like about AI is that the you know, the those monthly categorizations, every single month you're gonna have 200 transactions that we need to categorize in QuickBooks Online.
• 48:56
  SPEAKER_01: AI can help you do that.
• 48:58
  SPEAKER_01: But the issue is you actually you still need someone who understands the numbers and can easily spot a discrepancy from month to month.
• 49:05
  SPEAKER_01: So if I notice office expense, whatever account is 400 this month, but the next month it's 4,000, something's probably off.
• 49:12
  SPEAKER_01: And that's where you need that second set of eyes because yeah, AI can help streamline, you know, the basic day-to-day bookkeeping works like categorizations and reconciliations.
• 49:21
  SPEAKER_01: But if you don't have someone that's able to analyze and actually give you insights and tell you exactly what to do based on that information, then your books are gonna be wrong.
• 49:28
  SPEAKER_01: Number one, for the most part.
• 49:30
  SPEAKER_01: I know AI is getting pretty good, but there's always gonna be issues.
• 49:33
  SPEAKER_01: And number two, it's not gonna be able to tell you exactly what you need for your industry.
• 49:37
  SPEAKER_01: Since obviously we work with e-commerce, we've we've seen a thing or two because we've been around the game, six and seven-figure brand owners, different types of uh Shopify, Amazon, a couple Etsy sellers in the future, potentially as well.
• 49:48
  SPEAKER_01: Um, so that's I think where where AI can't really step in for now.
• 49:52
  SPEAKER_01: Um, you need the expertise somewhere else.
• 49:55
  SPEAKER_00: Here too.
• 49:55
  SPEAKER_00: And the similar uh sentiment in the marketing space, but at the end of the day, it's a tool and it's gonna make our jobs a lot easier.
• 50:02
  SPEAKER_00: But to your point, there's still a human master, there's still somebody who needs to look at it, double check it, and make sure that it's in fact accurate.
• 50:10
  SPEAKER_00: Uh, and to be held accountable because Chat GPT makes tons of mistakes, but I can't fire my ChatGPT.
• 50:16
  SPEAKER_00: I can, but I won't.
• 50:17
  SPEAKER_00: Uh not the way it works.
• 50:18
  SPEAKER_00: So uh Arthur, thanks for joining us today.
• 50:21
  SPEAKER_00: Uh, before we wrap up, can you let our listeners know where they can find you online and if you got any special promotions?
• 50:27
  SPEAKER_01: Yeah, for sure.
• 50:27
  SPEAKER_01: Um, our website is just S N G, so and D G bookkeeping.com.
• 50:33
  SPEAKER_01: Um, you could just search up Arthur Glinken, LinkedIn.
• 50:37
  SPEAKER_01: Um, I'm on TikTok.
• 50:38
  SPEAKER_01: I've been making those TikTok shorts and YouTube long form videos.
• 50:41
  SPEAKER_01: So um that's where I'm at, primarily TikTok and YouTube.
• 50:44
  SPEAKER_01: Um, but if you go on our website, s and bookkeeping.com, then there's a couple things that we have.
• 50:50
  SPEAKER_01: Number one is I put together a checklist for based on our actual clients, six and seven figure clients, a monthly bookkeeping checklist.
• 50:57
  SPEAKER_01: So if you're not ready to outsource the bookkeeping to us or another e-commerce accountant yet, then that checklist will give you 80% of what you need to do because, like I mentioned, there's so much nuance in the e-commerce space, and each business is a little bit different.
• 51:09
  SPEAKER_01: I can't get everything, every monthly step that you need to do, but it'll get you 80% of the way there for your monthly bookkeeping.
• 51:16
  SPEAKER_01: You know, categorize your accounts, make these entries, account for depreciation if you do have assets, that sort of thing.
• 51:21
  SPEAKER_01: Um, so you can do that, use that checklist to actually do your bookkeeping if you're still in that position where you want to do it yourself.
• 51:28
  SPEAKER_01: And then the second thing is on that website, we're currently running a free QuickBooks Online audit for e-commerce owners where basically you and I, we just sit on a call and I'll break down your books one-on-one because, like we mentioned, there's a lot of things that can go wrong.
• 51:41
  SPEAKER_01: So I'll I'll literally point out exactly on your financials this is where uh this number's wrong, this is how you can fix it.
• 51:47
  SPEAKER_01: Um, and then based on that, obviously, if if you think it's something that's too difficult, you don't want to deal with, then that's where we can step in.
• 51:53
  SPEAKER_01: If not, you just got yourself uh some free advice.
• 51:56
  SPEAKER_01: And I'll on that call, I also give you a free monthly booking me bookkeeping checklist, but it's tailored specifically to your business.
• 52:02
  SPEAKER_01: So once I actually get an understanding of your business, I'll send that over to you for free as well.
• 52:07
  SPEAKER_01: Um so yeah, that's what we're doing for now.
• 52:09
  SPEAKER_00: Lots of e-commerce deals.
• 52:10
  SPEAKER_00: So you guys, if you're struggling with your books, if you're not happy with your bookkeeper, please check out Arthur and SNG uh accounting, SNG bookkeeping, excuse me.
• 52:20
  SPEAKER_00: SNG Booking.
• 52:20
  SPEAKER_00: SNG bookkeeping.
• 52:21
  SPEAKER_00: We'll have all the links in the show notes.
• 52:23
  SPEAKER_00: So wherever you're tuning in, Apple, Spotify, or directly uh on our website, uh, we'll have the links there.
• 52:30
  SPEAKER_00: We'll have uh Arthur's LinkedIn as well as the website and any of the uh the checklist.
• 52:36
  SPEAKER_00: So feel free to check it out there.
• 52:37
  SPEAKER_00: Arthur, man, thanks again for hopping on.
• 52:39
  SPEAKER_00: Have a great rest of your day.
• 52:40
  SPEAKER_01: Appreciate it.
• 52:41
  SPEAKER_01: You as well.
• 52:42
  SPEAKER_00: That wraps up today's episode of Selling on Giants with Arthur Glinken of SNG Bookkeeping.
• 52:48
  SPEAKER_00: If there's one thing to take away, it's clean books equals clear decisions.
• 52:53
  SPEAKER_00: From understanding your sales tax nexus to tracking tariffs and true landed costs, accurate financials are what separate the brands that guess from the brands that grow.
• 53:03
  SPEAKER_00: Arthur also reminded us that automation tools from QuickBooks to WebGility can make bookkeeping easier, but they'll never replace the human expertise needed to interpret the numbers and make smarter, smart calls for your business.
• 53:18
  SPEAKER_00: If you'd like to connect with Arthur, visit sngbookkeeping.com.
• 53:23
  SPEAKER_00: That's S-A-N-D-G bookkeeping.com, or find him on LinkedIn, YouTube, or TikTok at S Ng Bookkeeping.
• 53:30
  SPEAKER_00: He currently is offering a free QuickBooks online audit for e commerce owners and a monthly bookkeeping checklist for you to download right now on his site.
• 53:39
  SPEAKER_00: Thanks for listening to Selling on Giants.
• 53:41
  SPEAKER_00: Don't forget to like, follow, or subscribe wherever you're tuning in.
• 53:45
  SPEAKER_00: And until next time, stay classy, people.