eCommerce Townhall Ep9: Financial Management of an Ecommerce Business with Nathan Hirsch of Ecombalance

May 25, 2022

Financial management is one of the most important aspects of your eCommerce business and focusing on it as early as possible will help you stay ahead of the game. Bookkeeping might seem a little bit boring compared to email marketing and ads, but hiring a finance manager is a key part of being successful.

In today’s episode, I’m joined by Nathan Hirsch, CEO, and Founder at Ecombalance, a company that helps eCommerce stores simplify their financial management process through accurate bookkeeping to make solid financial decisions.

During this episode, Nathan shares how you can manage your financial data by creating empowering bookkeeping routine practices that can help you keep everything simple, work with real numbers and take your brand to the next level.

Financial management is one of the most important aspects of your eCommerce business and focusing on it as early as possible will help you stay ahead of the game. Bookkeeping might seem a little bit boring compared to email marketing and ads, but hiring a finance manager is a key part of being successful. Letting someone else take over day-to-day financial management can help you focus on growing your brand, relieve stress, and manage all your data more efficiently.

We’ve got an awesome episode for you! We chatted with Nathan Hirsch from Ecombalance. Ecombalance helps eCommerce stores simplify their financial management process through accurate bookkeeping to make solid financial decisions.

During this episode, we discussed the mistakes the stores make in their bookkeeping. We discussed also the importance of having a simpler chart of account (COA), and what Ecombalance offers in the bookkeeping space.

We also talk about the things that can happen when a business accounting isn’t managed properly. What are the parts you should focus on solving in order to have a good book, and what are the best bookkeeping practices and workflow

Don’t miss this episode with Ecombalance. Stay tuned, dig in and be sure to implement what you’ve learned.

SHOW NOTES

In This Episode, You Will Learn:

[01:42] Today’s Topic: Financial Management of an Ecommerce Business

[04:27] Things that can happen when a business accounting isn’t dialed in.

[07:07] Some of the mistakes that stores make in their bookkeeping  

[09:13] The parts you should focus on solving in order to have good books

[11:54] The architecture of the best bookkeeping practices and workflow 

[14:39] Integrating clients’ payment methods with your bookkeeping safely 

[16:55] Things that CEOs can be empowered to do when the data is well managed

[18:29] The importance of having a simpler chart of account (COA)

[20:14] How to compare your income trends and why it’s key

[21:26] Ecombalance and what they offer in the bookkeeping space

[22:47] How to sign up on Ecombalance and get two months of free 

[23:07] Episode wrap up and key takeaways from the episode

[23:07] Ending the show and call to action

Notable Quotes

  • “Unless you segment your books for different products, it’s really hard to figure out what you are making.”
  • “Doing more is not always better; simpler is better.”
  • “Entrepreneurs should not be doing the bookkeeping; it’s not a good use of their time; they should be focused on growing their business.”
  • “Integration is the name of the ball game when it comes to bookkeeping.”

Bonus: Grab your extra free month offer with Ecombalance

Ecombalance offers one month free to new clients after signing in, but you will get two months free if you mention the “Ecommerce Townhall” podcast when signing up.

Go to https://ecombalance.com/referrals/

Sign up there, grab your affiliate link, and you will get two free months

Let’s Connect

Nathan Hirsch

Website:  https://ecombalance.com/
LinkedIn: https://www.linkedin.com/in/nathanhirsch
Instagram: https://www.instagram.com/realnatehirsch/?hl=en

Jon Tucker

Website:
www.ecommercetownhall.com
www.helpflow.com
Email: jtucker@helpflowchat.com
Like our Facebook Page: Ecommerce Townhall
YouTube: Ecommerce Townhall

EPISODE TRANSCRIPT
0:02 – e-commerce town hall and in today’s
0:05 – episode i got Nathan Hirsch from Ecombalance
0:07 – What Ecombalance helps you do
0:09 – is as a store get your bookkeeping
0:12 – process and financial management process
0:14 – just really really dialed in so that you
0:16 – can make better financial decisions in
0:18 – the business and you know i know
0:19 – bookkeeping might seem you know a little
0:22 – bit boring compared to like email
0:23 – marketing or ads or all these other
0:25 – things that are out there but in the
0:27 – episode Nathan shares some war stories
0:29 – around what can happen to your econ
0:31 – brand if you don’t get the bookkeeping
0:33 – right and you’re not doing it well and
0:35 – so there’s definitely a lot here that’s
0:37 – worth digging into and the bottom line
0:39 – is if you don’t feel like your financial
0:41 – data and the routine that you have as a
0:43 – CEO as you build your brand is really
0:46 – empowering you to be able to take the
0:48 – business to the next level then you’re
0:49 – going to get a lot of key takeaways from
0:51 – this episode so dig in let us know what
0:53 – you learned to take your business to the
0:55 – next level and i hope you find it
0:56 – valuable
0:58 – welcome to ecommerce town hall where six
1:00 – seven and eight figure e-commerce store
1:02 – leaders learn how to scale and
1:04 – streamline to get to the next level on
1:07 – each episode you’ll see strategies from
1:09 – the industry experts behind successful
1:11 – stores that you can take back and apply
1:14 – with your teams right away the show is
1:17 – brought to you by helpful.com help blow
1:19 – provides 24 7 live chat teams to over a
1:22 – hundred e-commerce stores and can help
1:25 – you drive more sales while providing an
1:28 – awesome customer experience through
1:29 – their live chat agents
1:31 – check them out at HelpFlow.com but for
1:33 – now let’s dive into today’s episode
1:40 – hey guys welcome back to the show super
1:43 – super excited to dig into today’s topic
1:45 – we’re going to be talking basically
1:46 – about financial business uh financial
1:48 – management of an econ business um
1:52 – there’s a lot of content out there a lot
1:53 – of episodes a lot of blog posts a lot of
1:54 – everything around marketing and
1:57 – conversion optimization and you know
1:59 – advertising and just all the aspects of
2:02 – growing an ecom business but when it
2:03 – comes to financial management um
2:07 – whether it’s bookkeeping accounting cash
2:09 – flow management all that stuff um it’s
2:11 – not something a lot of people talk about
2:12 – but it’s something that if you don’t
2:15 – manage that part of the business well it
2:17 – can be a huge problem and really frankly
2:19 – causing other parts of the business the
2:21 – fun sides the marketing side can make
2:23 – all those things break very very quickly
2:24 – if the finance side isn’t taken care of
2:26 – and so uh i’m excited to bring Nathan on
2:29 – today to really talk through um the
2:31 – financial side of things more deeply so
2:33 – Nathan is co-founder of Ecombalance
2:35 – and basically what they do at Ecombalance
2:37 – is really help e-commerce stores
2:39 – simplify that process of you know
2:42 – accurate bookkeeping and having the
2:44 – right financial data to really make
2:46 – solid decisions and so we’re gonna
2:48 – dig into a lot um but what i was really
2:51 – excited about when it comes to Nathan is
2:52 – like he’s not just somebody that decided
2:54 – like i think i should build something
2:56 – in e-commerce and bookkeeping and like
2:57 – that seems like a good thing to go into
2:59 – he’s got a unique experience where um
3:01 – you know he was co-founder of Freeup uh
3:03 – which is the number one way to find uh
3:05 – basically pre-vetted freelancers online
3:08 – uh scale that to 12 million dollars a
3:10 – year also he’s run an amazon store
3:13 – also where he drove 25 million dollars
3:14 – in total revenue so he’s got like this
3:16 – wide range of experience of running a
3:18 – big team running a big business doing
3:20 – the merchant thing and now he’s kind
3:23 – of bringing that perspective to how to
3:24 – run you know the bookkeeping and
3:26 – financial side of e-commerce and so
3:28 – really really excited to dig into like
3:30 – what he’s seeing with e-com stores when
3:32 – it comes to the financial side um and
3:35 – really gets you guys to the point where
3:37 – you really see how to run a tight ship
3:39 – on the financial side of e-com so Nathan
3:41 – welcome to the show man i appreciate you
3:43 – making the time
3:44 – Jon thanks for having me i’m excited to
3:46 – be here i’ve been looking forward to
3:47 – this all day awesome awesome so
3:50 – i would imagine that store owners
3:52 – listening
3:53 – know they need to clean up their books
3:55 – right like every business has books of
3:57 – some sort but very few are like super
4:00 – clean books that an accountant would
4:01 – look like and be like oh this is
4:02 – fantastic but it seems to take a
4:04 – backseat right to marketing it seems to
4:06 – take a backseat to other initiatives
4:08 – until it becomes a huge problem and so i
4:10 – thought a good initial question to ask
4:12 – before getting into bookkeeping is what
4:14 – are some of the nightmares that you’ve
4:16 – seen happen when like a business doesn’t
4:18 – have their books dialed in doesn’t have
4:20 – accounting dialed in like what what does
4:22 – it lead to so people can really
4:23 – understand like this is important to get
4:24 – right it might not be urgent but it’s
4:26 – important
4:27 – yeah and there’s really two sides of it
4:28 – i mean one is being able to to make good
4:31 – decisions every single month
4:33 – with real numbers i can’t tell you how
4:35 – many business owners have no idea how
4:37 – much money they’re making or how much
4:38 – money they’re making per product they
4:40 – might be selling five products but four
4:42 – of them are unprofitable they’re making
4:44 – all their money on one and they’re
4:45 – wasting a good amount of time on the
4:47 – other and unless you actually segment
4:49 – your books it’s really hard to figure
4:51 – out what you’re making and it could be
4:53 – it could be both across multiple brands
4:55 – it could be different skus it could be
4:56 – different marketplaces you could be
4:57 – spending a lot of time trying to push
4:59 – products on amazon japan which isn’t
5:02 – really making you money so that’s kind
5:04 – of the big nightmare is the e-commerce
5:06 – sellers that are making really big
5:08 – decisions make taking out big risks in
5:10 – their business based on just seeing
5:11 – money going to their bank account and
5:13 – their amazon reports opposed to real
5:15 – numbers and the bigger one which i can
5:17 – relate to a lot uh going through a sale
5:20 – of FreeUp which was one of the most
5:21 – stressful six months of my life and and
5:24 – that’s with clean immaculate books i
5:26 – can’t tell you how many people have
5:28 – worked their butt off to get this big
5:30 – payday at the end and they go to sell
5:32 – their business and their books are not
5:34 – in the the right shape to sell their
5:36 – company it hurts their evaluation it
5:38 – blows up the deal and that can be
5:40 – devastating and if you
5:41 – if you if you don’t have clean books
5:43 – going back that takes time and that’s in
5:46 – addition to the due diligence in
5:48 – addition to the lawyers going back and
5:49 – forth the last thing you want to do is
5:51 – then wait two months for a bookkeeper to
5:53 – comb through and clean up all your
5:54 – numbers so
5:56 – to me it comes down to being able to
5:58 – make good decisions every single month
6:00 – based on what the numbers are telling
6:01 – you and putting yourself in position
6:03 – where if you ever do want to sell your
6:04 – business to at least have it be sellable
6:07 – and that’s what books allows you to do
6:09 – totally makes sense um
6:11 – i had a buddy that went through an
6:12 – acquisition process where in retrospect
6:15 – he realized that it wasn’t such a huge
6:18 – issue for the acquirer
6:20 – that his books were messy
6:22 – but it was a huge advantage to the
6:24 – acquirer because they went through the
6:25 – process and said okay we got to clean
6:26 – this up oh we got to add this back like
6:28 – you got to do a whole bunch of stuff
6:29 – where like they control the messaging of
6:31 – the data because his data was garbage um
6:34 – and so they
6:35 – they got what they needed but they used
6:37 – it against him essentially
6:38 – even having your book set up on a cache
6:40 – opposed to accrual and joe valley talks
6:43 – about this all the time from from quiet
6:44 – life i mean that can kill your
6:46 – evaluation so it’s not just having clean
6:48 – books it’s having your books set up in a
6:51 – way that’s beneficial for you going into
6:53 – the sale 100 100
6:55 – um what are some of the the mistakes
6:58 – that you see uh c-stores make when it
7:00 – comes to bookkeeping um that kind of
7:02 – leads to you know bad books or just like
7:04 – bad practices like what are some of
7:06 – those mistakes that you see
7:07 – so a lot of people have the top line of
7:09 – their income statement as the the amazon
7:12 – deposit into their bank account when
7:13 – really that that’s not the case this
7:15 – would be any marketplace not just amazon
7:17 – but really that the top line should be
7:19 – the top line what are you actually
7:20 – selling then there’s all these different
7:22 – amazon fees and reimbursements and then
7:25 – it’s the income going into your bank
7:26 – account so not setting it up correctly
7:29 – unfortunately ecommerce
7:31 – e-commerce companies like amazon shopify
7:34 – uh woocommerce that they don’t make it
7:35 – easy for you to grab reports and pull it
7:37 – into quickbooks we live at an age and
7:40 – who knows if this will still be the case
7:41 – in five years where you need that that
7:44 – third-party integration tool we use a2x
7:46 – because they they’re great with accurate
7:48 – data but trying to just get numbers
7:51 – directly from amazon and push that into
7:53 – quickbooks or into xero that’s a big
7:55 – mistake very very hard to get accurate
7:57 – information that will actually reconcile
7:59 – unless you’re small and even then it’s
8:01 – only going to work for a certain period
8:04 – of time uh and the next is cost of goods
8:07 – sold we kind of talked about cash versus
8:09 – accrual you spend fifty thousand dollars
8:11 – in inventory a lot of people throw that
8:13 – in as fifty thousand dollars expense in
8:15 – the month of january well that’s gonna
8:17 – show maybe a loss for january and a huge
8:20 – profit for uh february march april but
8:22 – that doesn’t really tell you anything on
8:24 – how your business is doing so you need a
8:26 – better way to do it on a cruel basis
8:28 – whether it’s cost of goods averaging or
8:30 – getting more accurate uh inventory a
8:33 – different way using a seller boards or
8:35 – whatever it is but those are common that
8:36 – the two mistakes on that top line
8:38 – revenue number and how you handle
8:40 – inventory and cost of goods sold got it
8:42 – got it that totally makes sense um
8:46 – you mentioned the data source problem
8:48 – right of like getting like oh you get
8:50 – your amazon statement just put it in
8:51 – quickbooks right um
8:53 – i would imagine that that’s something
8:54 – that just makes it difficult for stores
8:56 – to be able to run things well from a
8:57 – bookkeeping perspective but but what are
8:59 – some of the other things you’ve seen
9:00 – whether it’s uh you know what banks
9:02 – they’re using or you know the data
9:04 – connections those types of things like
9:06 – what are the the parts that an ecom
9:08 – store should should be focused on
9:10 – solving in order to make it easier to
9:12 – have good books
9:13 – yeah
9:14 – this is something that that’s so
9:15 – overlooked because i feel like a lot of
9:17 – people will chase that that nice extra
9:19 – 0.5 interest rate or um that that 200
9:23 – cash reward you get for opening up a new
9:25 – checking account and some random bank
9:27 – and they don’t factor in the the
9:28 – easiness and i went through this using
9:31 – an online only bank that just made it a
9:33 – nightmare for our bookkeepers and our
9:35 – accounts before switching back to to one
9:37 – of the main ones and i mean
9:39 – even how a lot of these bookkeepers
9:41 – price different clients is is how easy
9:44 – are your banks your credit cards your
9:46 – processors your marketplaces if
9:48 – someone’s using woocommerce which is
9:50 – using could be using five ten different
9:52 – payment gateways opposed to just amazon
9:55 – that takes up more time so doing more is
9:58 – not always better
10:00 – and having five credit cards can make it
10:02 – an absolute nightmare so so for me
10:04 – simpler is better using as little
10:06 – accounts as possible using banks that
10:08 – you know are compatible with quickbooks
10:10 – processors that are compatible with
10:12 – quickbooks um using payment gateways
10:14 – that keep it simple you don’t need to
10:16 – offer every little thing under the sauna
10:18 – until you get to a certain point but all
10:20 – of that comes into play when it comes to
10:22 – easiness and and be able to actually
10:25 – get good reports even just accepting
10:27 – payments maybe you don’t need a stripe a
10:29 – paypal and all these other processors if
10:31 – you can stick to one or two it makes it
10:33 – easier across the board
10:35 – got it yeah so keeping it simple is
10:36 – really what i’m hearing of like being
10:38 – able to map out like this is where the
10:39 – money comes from this is where it goes
10:41 – and then it’s logged in quickbooks not
10:43 – some convoluted situation unless there’s
10:45 – a reason if there’s a legitimate
10:47 – business business reason to use a
10:49 – certain process or multiple processors
10:51 – or or whatever it is that’s different
10:53 – than just doing it for the gimmick of
10:55 – this week got it yeah it totally makes
10:58 – sense i’m thinking we just switched our
10:59 – personal banking uh
11:01 – from one to another i won’t name drop
11:03 – but uh it’s been night and day different
11:05 – um and don’t use personal checking
11:07 – accounts or personal credit cards yes
11:09 – yeah i mean i’ve actually so i had both
11:11 – accounts business and personal at the
11:13 – one bank moved the personal over to this
11:15 – bank and now i’m like i got to figure
11:16 – out how to get the business over as
11:17 – quick as possible because it’s just so
11:18 – much better um but i want to dig into
11:21 – kind of workflow so
11:23 – i want to understand what’s like the
11:25 – best practice
11:27 – process for e-com stores when it comes
11:29 – to bookkeeping you know financial
11:31 – management like if you could kind of
11:33 – paint a picture for us of like how
11:35 – should it be structured as far as like
11:37 – the pieces of the puzzle and then also
11:39 – maybe from a workflow perspective like
11:41 – how should it operate from you know the
11:43 – CEO’s perspective not exactly how are
11:45 – they doing the bookkeeping but like
11:46 – what’s the the architecture of the
11:48 – system roughly um from the CEO’s
11:50 – perspective and then also what is the
11:52 – workflow what does the right way look
11:53 – like
11:54 – yeah sure so
11:56 – my overall theory is or my overall
11:59 – philosophy is that entrepreneurs should
12:01 – not be doing their own bookkeeping no
12:02 – matter what size business you are first
12:05 – of all it’s just not a good use of your
12:06 – time you should be focused on sales
12:08 – marketing expansion lots of new products
12:10 – ppc whatever it is growing your business
12:13 – rather than doing your books and second
12:15 – of all nine out of 10 entrepreneurs are
12:17 – not good at bookkeeping and maybe
12:19 – someone listening is but most of the
12:21 – time when entrepreneurs try to take a
12:23 – quickbooks course or do the bookkeeping
12:25 – themselves later on they just have to
12:26 – pay someone to redo it right anyway so
12:30 – not a good use of your time chances of
12:31 – you getting doing it actually right are
12:33 – not that high and one of the best
12:35 – decisions we ever made with FreeUp was
12:38 – getting a bookkeeper in place from day
12:40 – one so our books dating back four years
12:42 – were immaculate even before we were
12:45 – making a profit even before we had
12:46 – revenue we were still getting reports we
12:48 – could see what our expenses were broken
12:50 – down so we could see roi on expenses and
12:53 – how that was going so the real system is
12:55 – the month ends by the 10th 15th of the
12:58 – month you get income statement balance
13:00 – sheet cash flow and you review that with
13:02 – your business partner and you compare
13:03 – that to the month before you compare
13:05 – that to the same month last year and you
13:07 – make decisions based on what the numbers
13:09 – are telling you and that could be
13:10 – comparing brands different segmentations
13:12 – marketplaces but whatever it is you as
13:15 – an entrepreneur you don’t actually have
13:17 – to log into quickbooks or log into xero
13:19 – and you should be getting those reports
13:21 – sent to you and having a meeting on your
13:23 – calendar every single month to go
13:25 – through it with your business partner
13:26 – your leadership team your bookkeeper
13:28 – whoever it is and whoever it makes sense
13:30 – to to go through it with so that’s kind
13:32 – of the system what you don’t want to do
13:35 – is what i did with my amazon business
13:36 – back in the day where you wait until the
13:38 – end of the year then you dump everything
13:40 – on your account and they’re scrambling
13:42 – to put everything together and even then
13:44 – they’re just doing it a way to file your
13:45 – taxes they’re not doing a way to display
13:48 – information to you so that you can make
13:49 – decisions and by then by the time they
13:51 – finish those books it’s too late to make
13:53 – any real decisions anyway so have a
13:56 – system set up with the bookkeeper by the
13:58 – 15th of the month you get the reports
14:00 – and you review them together and you
14:01 – look for trends and make real decisions
14:04 – got it one of the things that i remember
14:06 – from my first business is i did do the
14:08 – bookkeeping initially myself
14:10 – i didn’t think about like what secure
14:12 – information i’m using because it’s my
14:14 – money and my information so it’s like i
14:15 – just did the bookkeeping but then that
14:17 – became a nightmare to like transition
14:19 – the process to a bookkeeper because i
14:20 – didn’t have any
14:22 – clarity around um data security and what
14:24 – they should have access to
14:26 – um
14:27 – what are some things that you guys do
14:29 – with clients to basically make it so
14:31 – it’s like hands off for them as a
14:33 – merchant but you have everything you
14:35 – need and it’s still secure for them like
14:36 – how do you balance that particular part
14:39 – yeah and this is why i mean integration
14:41 – is the name of the game when it comes to
14:43 – bookkeeping that the point on which a
14:45 – client adds a payment method uh and
14:47 – starts working with us to when we can
14:48 – actually start doing their books and
14:50 – this has actually been a big focus of
14:52 – mine over the past 60 days we just hired
14:54 – a full-time integration person and this
14:56 – person’s job is to integrate clients not
14:59 – only as fast as possible because we want
15:01 – to get started they want to get started
15:02 – but as easy as possible and making it
15:04 – with clear easy directions now we also
15:07 – don’t want to have to go back later and
15:09 – ask the client for statement or whatever
15:11 – it is and this is also why what banks
15:13 – you use is important the banks should be
15:15 – able to add bookkeepers ad accounts as
15:17 – view-only access so part of our
15:19 – integration process is collecting
15:22 – documents whether it’s articles of
15:23 – incorporation tax returns making sure we
15:26 – have what we need there um getting view
15:27 – only access to all banks credit cards
15:29 – processors marketplaces and then
15:31 – connecting everything to quickbooks so
15:33 – that the only time that we need to reach
15:35 – out to a client is to clarify maybe a
15:38 – new transaction that has come up that
15:39 – we’ve never seen before
15:41 – it’s not to chase them down hey send me
15:43 – your statements this month our goal is
15:45 – to spend a little extra time up front
15:47 – getting all the access we need so that
15:49 – saves a boatload of time as we go and
15:52 – that’s really the the name of the ball
15:53 – game like i said and why we hired a
15:55 – full-time person and and why even though
15:57 – we have a full-time person we’re looking
15:59 – to improve that process and make it
16:00 – shorter and easier and hands-on and
16:02 – offer calls to just walk a client
16:04 – through it and if you’re a client and
16:06 – and if i’m i’m a long-time entrepreneur
16:09 – the last thing i want to do is sit on
16:10 – the call with an hour sit down and zoom
16:12 – with an hour with the bookkeeper giving
16:14 – them access to all my stuff but it’s
16:16 – worth it to get those reports every
16:17 – single month and make sure you’re
16:19 – getting accurate information and not
16:20 – have a bookkeeper that needs to chase
16:22 – you down every month for for lots of
16:23 – little things over and over
16:25 – got it yeah completely makes sense
16:27 – walk me through um
16:30 – a little bit more from the CEO
16:31 – perspective on like how they should be
16:33 – using the data like what do you see once
16:36 – once brands have solid data in place
16:39 – what are they doing on like a you know
16:40 – whether it’s daily weekly monthly basis
16:42 – i’m sure it’s going to vary a ton
16:43 – depending on like where their business
16:44 – is at and cash flow and all that stuff
16:46 – but like what what are uh what are some
16:48 – of the things that a CEO is empowered to
16:50 – do
16:51 – when they have the data really well
16:53 – taken care of
16:54 – yeah i mean i’ll give you an example we
16:55 – work with an eight-figure seller that’s
16:57 – very seasonal so during the summer they
16:59 – do very very little business so an
17:02 – important add-on that we did with them
17:03 – is projecting out cash flow because they
17:06 – they need to be able to pay their people
17:08 – through the summer without running out
17:09 – of cash to make it through till the end
17:12 – of the summer where they’ll make a
17:13 – boatload of money so cash flow
17:14 – production is is key and we need to be
17:17 – able to predict within a thousand
17:18 – dollars or so hopefully less of how much
17:20 – cash they’re going to have august 15th
17:23 – when we’re recording this on may 17th so
17:26 – doing that is really important um we
17:29 – kind of talked about the income
17:30 – statement and the segmenting there uh
17:32 – balance sheet becomes more important
17:33 – with an e-commerce business as opposed
17:35 – to a FreeUp which is very cash flow
17:37 – positive where there’s no inventory
17:39 – there’s no overhead there’s no office um
17:41 – we’re not we’re not or we’re collecting
17:43 – cash before we’re paying the freelancers
17:45 – businesses like that are way different
17:46 – than e-commerce business where you need
17:48 – to understand a balance sheet in your
17:49 – inventory so those are kind of the three
17:52 – that we provide the income statement the
17:53 – balance sheet and the cash flow every
17:55 – business is a little different on what
17:57 – what becomes more important there are
17:59 – plenty of e-commerce businesses that get
18:01 – away without spending much time on their
18:03 – balance sheet and there’s others where
18:04 – it becomes incredibly important same
18:06 – thing with cash flow
18:08 – got it got it what are some of the
18:10 – other uh you know big obstacles that you
18:13 – see or anything else you think is is uh
18:15 – helpful for listeners to understand
18:16 – because i want to go into like
18:17 – specifically what does it look like
18:19 – working with Ecombalance like how does
18:20 – integration work all that stuff in a
18:22 – second but like are there any other big
18:23 – obstacles you think are helpful to uh to
18:26 – touch on during the conversation here
18:28 – yeah so the chart of accounts is one of
18:31 – the most underrated things and i’ll be
18:33 – honest i was probably a newbie to this
18:35 – just because i’ve created them for my
18:37 – own companies and i guess FreeUp and
18:39 – even my amazon business because we
18:40 – started way back um we’re a little
18:42 – simpler but creating a good chart of
18:44 – accounts is something our controller is
18:46 – really good at and be able to break it
18:48 – down so you know what the different
18:50 – expenses are you can get very general
18:52 – with chart of accounts so you can get
18:53 – very detailed and there’s a chance you
18:56 – can go overboard too like we’re auditing
18:58 – a company right now or going through and
19:00 – pricing them and and their income
19:01 – statements like 20 plus pages and that’s
19:04 – a little bit insane so but having a
19:06 – chart of accounts that you can easily
19:07 – reference that that’s numbered there’s a
19:09 – specific way that bookkeepers numbered
19:11 – it from 101 to 405 all the way down uh
19:14 – labeling different income and expenses
19:16 – but being able to make sure that the
19:18 – average entrepreneur who isn’t a
19:20 – bookkeeper who might not think
19:22 – financials are the most fun thing in the
19:23 – world can actually read it and
19:25 – understand their business to me that is
19:27 – the most underrated part of this whole
19:29 – thing and there’s a little bit of
19:31 – feedback that goes with it i mean if we
19:33 – get someone a chart of accounts and they
19:34 – have massive feedback that we’re doing
19:36 – something wrong but there are tweaks you
19:38 – can put in there so that someone can
19:39 – understand their numbers
19:41 – better maybe some way that they’ve done
19:43 – it for the past four years or some way
19:45 – that they have a mental note of they
19:46 – call and expense a certain thing
19:49 – doing that with the client within that
19:50 – first 60 to 90 days can be really
19:53 – helpful to make them actually spend the
19:55 – time to go through the numbers and
19:56 – understand it when we send them reports
19:58 – down the line
19:59 – got it got it that makes sense anything
20:01 – else like that because that’s something
20:02 – i think a merchant listening to wouldn’t
20:04 – wouldn’t think of as like maybe i should
20:05 – restructure my chart of accounts like
20:07 – anything else like that that you see
20:08 – that’s just kind of uh things people
20:10 – realize as they dig in
20:12 – yeah so what i like to do just with
20:14 – entrepreneurs is go through the income
20:16 – statement go through the balance sheet
20:17 – go through the cash flow with them and
20:19 – and kind of try to pinpoint things that
20:21 – they should be watching in terms of
20:22 – trends i i kind of mentioned comparing
20:24 – it to the same day last month same day
20:27 – la or same month same
20:29 – comparing it to the last month and the
20:31 – same month last year those are really
20:33 – good trains to watch because your
20:35 – expenses might be going up way faster
20:37 – than your revenue or a certain product
20:39 – might have been doing great last year
20:41 – and now it’s tailing off so being able
20:43 – to to compare it um to me that’s the key
20:45 – i mean if you’re if if you’re having
20:47 – that meeting and you’re reviewing it
20:49 – every month and you’re looking at trends
20:50 – and you have a chart of accounts you can
20:52 – understand you’re ahead of 99 of the
20:54 – entrepreneurs out there
20:56 – got it got it yeah this is super super
20:58 – helpful i think there’s a lot of little
21:00 – nuggets that people are going to pull
21:01 – out um but i want them to i want people
21:03 – to be able to understand like what
21:05 – what specifically uh does Ecombalance
21:08 – help with like what is it like working
21:10 – with you guys like help us understand um
21:12 – for for merchants listening that realize
21:15 – okay like i need to button this stuff up
21:17 – what does it look like working with you
21:18 – as far as the integration onboarding and
21:20 – getting to the point of like okay things
21:22 – are now dialed in like i never have to
21:23 – do my books again
21:25 – yeah and i think our unique value
21:27 – proposition is my business partner
21:28 – connor and i we’re entrepreneurs first
21:30 – we’re e-commerce sellers first we’re not
21:32 – bookkeepers first we’re good at hiring
21:34 – we’re good at processes we’ve built a
21:36 – great e-commerce bookkeeping team that
21:38 – can even handle non-e-commerce
21:40 – businesses but our core is making it so
21:42 – that we speak entrepreneur a lot of
21:45 – bookkeepers are not able to do that they
21:46 – just speak bookkeeper so for us and and
21:49 – keep in mind we’re new we’re trying to
21:50 – get this process even simpler and
21:52 – simpler but right now you create a free
21:54 – account on our site you submit our
21:56 – pricing quote form and send us access to
21:58 – your current books we’ll give you a
21:59 – quote assuming you agree to that you add
22:01 – a payment method our integration person
22:03 – will jump in to get you integrated as
22:05 – fast as humanly possible and then we’ll
22:07 – have a kickoff call make sure we’re on
22:08 – the same page make sure we really
22:10 – understand your business and hit the
22:12 – ground running from there and from there
22:14 – just depends how far back we go we have
22:16 – people who come to us that haven’t done
22:17 – their books in two years and we have
22:18 – other people who are caught up and we
22:20 – can hit the ground running and uh it
22:21 – just depends how much time we need to
22:23 – get everything caught up but right now
22:25 – that’s our process and we we love
22:27 – feedback we’re continuing to make it
22:28 – more streamlined every week
22:30 – awesome awesome this is helpful is there
22:32 – anything else you think is uh important
22:34 – for people listening um before you wrap
22:36 – up like anything else either about the
22:37 – service or just about you know
22:39 – bookkeeping in general and financial
22:40 – management like anything you think is
22:42 – important to kind of um make sure that
22:43 – they’re aware
22:45 – yeah well overall i love connecting with
22:47 – other entrepreneurs i feel free to
22:49 – connect with me Nathan hirsch on any
22:50 – social media channel and if you do
22:52 – decide to sign up for Ecombalance make
22:54 – sure you mention this podcast and you’ll
22:56 – get two months free on our site it’s one
22:58 – month free as a trial you’ll get an
22:59 – extra free month to try us out and we
23:01 – really appreciate you uh having having
23:03 – me on
23:04 – awesome awesome i will get uh a link for
23:07 – that um in the show notes but yeah for
23:10 – everyone listening i think the big
23:11 – takeaway is
23:13 – this is not urgent until it becomes a
23:16 – big big problem and so it’s a type of
23:18 – thing where like it just serves you to
23:20 – spend some time you know whether whether
23:22 – it’s buttoning it up yourself which
23:23 – nobody ever does that’s why it takes so
23:24 – long or working with a company like econ
23:27 – balance just say look let’s get this
23:28 – taken care of spend spend a little bit
23:30 – of time with their integration team
23:31 – getting it done um and that way you end
23:33 – up in a position where where not only
23:35 – does it not become a problem for you but
23:37 – you have really solid access to data to
23:40 – be able to make better decisions and
23:41 – that’s something in this environment you
23:43 – know we’re about midway through 2022 um
23:46 – things are tighter now e-comm’s a little
23:47 – bit different now and the world’s a
23:49 – little different than it was over uh you
23:50 – know the coveted boom from for ecom and
23:53 – so it’s really important to know your
23:54 – numbers otherwise you wake up at the end
23:55 – of a quarter and you can’t make payroll
23:57 – and uh you’re definitely not reloading
23:59 – your inventory um so really really
24:01:00 – important to have these numbers right
24:02:00 – and i think Ecombalance can uh can help
24:04:00 – you do that but i hope that some of the
24:05:00 – things that Nathan’s talked about in
24:07:00 – this episode uh just give you kind of
24:09:00 – the framework that you can use so uh
24:11:00 – check the show notes uh we’ll have a
24:13:00 – link over to Ecombalance there
24:15:00 – to get that second month free but Nathan
24:18:00 – thank you so much for your time today
24:19:00 – man i really appreciate it yeah thanks
24:21:00 – for having me a lot of fun
24:22:00 – take care
24:24:00 – thanks for tuning in to e-commerce town
24:26:00 – hall for more resources related to
24:28:00 – today’s episode visit e-commerce hall
24:32:00 – and don’t forget to check out HelpFlow
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24:40:00 – drive more sales while providing an
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25:02:00 – overall amazing brand experience to your
25:04:00 – customers learn more today at
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