The following is a transcript of Episode 29 of Return on Podcast, the show where we help e-commerce sellers improve their ROI in business and in life. For more episodes, subscribe to our YouTube channel or listen on Podbean, Apple Podcasts, Spotify, and Amazon/Audible.
All right. Welcome back to Return on Podcast, where we talk about the experiences, obsessions, and the habits of the most successful e-commerce entrepreneurs. I’m your host, Tyler Jefcoat, and I wanna welcome you to this episode of ROP. When it comes to owning a business, think about yourself. If you own an e-commerce business, whether it’s six figure, seven figures, even maybe an eight figure business, you have probably gone out of your way to mastermind with peers in the field, with other sellers who are doing things really well that can make you better, that can make you stronger as an entrepreneur.
So when it comes to providing e-commerce accounting, there’s a fairly narrow group of firms that do this really well. And so I’m gonna do something wild. I’m gonna do something crazy today. I’m gonna bring on my best competitor, the company that should scare me the most, ’cause they are really good at the same services that Seller Accountant provides.
And the reason I’m gonna do this is that I am zealous to make sure that you guys capture the best thought leadership when it comes to finance investing in e-commerce, and honestly, my guest today is gonna make you and me both better. Here’s what I wanna promise you though, because you’re probably thinking, why the heck would you bring on a competitor? For the reason I just told you. The second question you probably have is, Tyler, seriously, you’re gonna bring two accountants onto a show and talk about accounting? And I just wanna promise you that Brittany and I are not gonna spend our time wrestling with journal entries here. We’re gonna talk about concepts. So Brittany Brown, Ledger Gurus CEO, wanna bring you into the show here. Welcome to ROP.
Thanks for having me, Tyler. I’m excited about this.
Hey, you bet. So you and I have been friends for actually a few years. So it’s funny, I have guests, and normally they tend to be people that I’ve encountered in the space and really love you and your family, really admire what your firm does. And just to give our audience a little bit of the sense of your journey, Brittany, what was happening in 2014 when you made the choice to pivot outta the day job and into owning your own practice?
Yeah, so I ended up having a career unexpectedly, let alone starting a business unexpectedly. So I found myself a very unexpected single mom at the ripe age of 26 with three very small kids, and I had no education to fall back on and no way to support my family. And so I ended up going back to school, getting an accounting degree during that period of time as a single mom. But as I was coming out of school and I was at a top university, I went to Brigham Young University, they have a really great accounting program. We were heavily recruited by the Big Four, and I was just overwhelmed with the crisis of how do I have a professional life if these are my options while also trying to be a single mom. At the time I was still a single mom, and so I just needed something different and it just didn’t exist in the workplace.
And so I took a job with KPMG for a little while and then took a job with a local accounting firm called Squire for a little while and had a great experience. Especially at Squire, KPMG was Big Four, and that was a tough fit for my family. But Squire was much more flexible and much more versatile for me. But still, it wasn’t what I’m doing now. And so as I was in that space, and I had been outta school for about three years, but in cumulative, I had only spent about a year worth of full-time. So I had just barely hit those 2000 hours for my CPA working with Squire. So about a year of full-time work experience equivalent.
And I had taken a role as an outsourced CFO for Squire and could really see like the value for businesses of having this sort of high level support but on a fractional basis. I was working for that company about five hours a week. They were doing about $8 million a year, and I was able to have an impact in just that amount of time and just realizing that this was possible to support businesses in this fractional way, and I would have more flexibility.
And right around that same time, the accounting space was moving to the cloud and all the apps were moving to the cloud, and I suddenly realized that this also was marrying up quite nicely with the ability to do it all from home.
So I was at this conference and I had this moment when I feel like I was just like compelled from a higher power to seriously consider starting a business. Honestly, I wanted to own a business like I wanted a shot in the head, and it was not really, had not been on my life plan at all. By that time, I was remarried. It was definitely on my husband’s life plan. He definitely wanted to be an entrepreneur. But this idea just took over my heart and soul at this conference, and I decided to launch it based on my own desire to have a good lifestyle fit business for myself.
I work from home, our entire team of 62 work from home as well. They always have. They always will. And that was really like the, the premise to jump was to have what wasn’t available for me when I left college and what I really needed and wanted, and the rest is all history. Turns out I was a much better entrepreneur than I thought I would be, and it’s been a really fun ride. And my husband, who was in a great job at the time, ended up getting about two years in and saying, this really looks pretty cool what you’re doing here. And then he jumped ship as well and became our COO, and like the rest is history.
Wow, that’s so great. Such a great story. I think every entrepreneur out there has something like that. First of all, our journeys are unique, but normally there’s some challenge and there’s how do I fit into this kind of square box of corporate America? That tends to be a recurring theme. And then there’s this kind of moment of, do I have what it takes? Do I view myself as an entrepreneur?
And just, Brittany, for what it’s worth, my observation of you and Steven is that you guys are crushing it and you guys have a, an amazing firm and just, that’s such a great story. So we’re gonna play a game here. So you and I are on a lot of other shows. We do other people’s podcast and because we’re accountant people, they don’t know what to ask us. It’s awkward. And so they ask us the same questions over and over again. And so I just thought it would be fun for me to run through a couple of those questions that you and I get because that’s what people ask. And you can give your take. If I have anything to add, I’ll add it to it. So here’s the first one. So what are the financial mistakes that you’re seeing sellers make that they gotta stop?
You know what I, I would actually say about that is I would say, what is, let me change that question slightly to what is the primary operational mistake that I see sellers make that translates into the biggest financial impact. Let me put it that way instead. I feel like e-commerce brands need to really own two things in house. They need to really master two things. I feel like they can outsource so much. They can outsource their shipping, they can outsource their manufacturing. They can outsource their accounting. They can outsource so many things, but I feel like they really can’t outsource product development, and they really shouldn’t be outsourcing marketing.
And the reason why I feel that way is because no agency will ever care to the degree that you care. And second of all, like agencies, they’re managing a million brands. They don’t really know what makes your brand truly special and what makes your brand truly unique. And what I see e-commerce companies do is I see them pour a lot of money into agencies, hoping that the agency will save them from the learning curve of learning the marketing, and then it never becomes an internal competency for them.
And maybe during the periods of time, when the Facebook ads are performing really well because the iOS is just feeding them like crazy, it’s fine. But we have so many clients right now who are really struggling because the iOS stopped feeding up cost effective Facebook advertising, and they had no idea how to pivot from that, and they had not built any sort of like multiple streams of revenue from a marketing perspective. They were one, one trick ponies. And as soon as that trick stopped working, they were in trouble. And you’re always gonna pay more for an agency anyways. Therefore, you don’t have as much wiggle room around the pivot when you’re paying an agency, and if the agency is failing to perform, if you’re not getting the return on ad spend that you needed to, you really don’t have any options besides just firing that agency and trying to find another agency.
But like agencies, we’re all playing the same game, right? Like they were all playing the iOS Facebook advertising game. And our clients who have taken the time to build true internal marketing competency are the ones who are actually surviving right now and thriving right now. And over and over again, I say it to our clients all the time, and I own my own brand now as well. And part of the reason why we brought in marketing guys, the CEO, is because we believed that marketing needed to be an internal competency. So I know it’s painful in the short run, and I know there’s a whole learning curve around it, and I know it’s really hard to master, but that would be the one operational move I see companies make that has the biggest financial impact is they try to outsource the marketing instead of making it an internal competency.
It’s such a great point. By the way, this came up in a conversation with some CEOs last week that I was talking with, Brittany, where you’re exactly right. And this may be something that evolves, right? So you start a company and you don’t have enough money or budget to solve every problem. And so I would advise just a, just a small nuance to what Brittany said, ’cause what you said is exactly right.
Like you may be forced to hire agencies in some areas early on, but the biggest additional mistake to what Britney just said is if you think you can set it and forget it with somebody that you’re hiring to do something, even if it’s like accounting, like what we do, if you think you can set it and forget it, you are not minding your own business. And so it’s really important to, and this is something I’ve learned about myself as a leader, by the way, I just tell on myself here. But I’ve learned that as a visionary, my preference is to delegate too quickly, and my team needs me to iterate a process about 10% more so that it’s possible for someone to take it and run with it and be successful.
And I would almost encourage you guys to take that same mantra if you’re in a hiring agency or a vendor to help you in an area. Let me think through my process, and I need to have an SOP for actually managing and partnering with this vendor so I can hold them accountable. And then I think, to your point, Brittany, as this function, whether it’s marketing or direct PPC or product development or inventory management, any of the other stuff that we’re gonna talk about here, the closer that function gets to the core of my business, if you think about like a bullseye, the closer it gets to the center, the more risky it is to outsource it.
And if you think about an agency, and again, Brittany and I own agencies, right? That’s all in accounting firm is, is an agency, right? So we’re talking to ourselves here as well. Brittany and I are gurus. She owns Ledger Gurus, but you hear us talk on a show because we’re gurus. But our service is only as good as our processes, and frankly, the least lower level person that’s on our team’s doing it.
And so it’s gonna be true for any agency that you hire, and you just need to be aware of that. You need to be ready to manage them. And again, if that process is really crucial, and I think the two you mentioned are perfect, product development and marketing are probably those two, then you need to be developing your internal genius because while maybe the $250,000 a year version of your company can afford to outsource it, the $2.5 million version of your company won’t be able to. Any other thoughts about that?
Yeah. And I agree, while you’re trying to build this up you probably will use agencies, but it needs to be a, it needs to be a short term solution. For example, I would hire agencies that were willing to teach you. I would hire agencies that, maybe they were doing your email marketing, but not your Google marketing. Whatever it is that’s primarily driving like the most, the momentum of your sells needs to be something that you are gaining internal expertise on.
So like I would invest in somebody who was willing to learn and I would buy them a bunch of books or buy them access to courses before I would spend that same amount of money on an agency where I have nothing to show for it at the end of the day. Invest in somebody to become your master rather than investing in an agency.
In this, in the product that we just bought, it was really interesting because our guy, our CEO, initially, even though he has a lot of marketing background, went the agency route because he was hoping to create more momentum more quickly. And what he found instead was he was just pouring money into agencies without getting the return that he needed.
And so he actually fired some of the agencies and then he dived in. And what he found when he dived in is that some of the most basic things that they should have been doing, they weren’t doing. And to your point, like, they were only as good as the lowest level staff, right? Like they, that person didn’t know to do this or this. They didn’t have the years of experience. Had they been working with maybe the founder who had years of experience, they wouldn’t have made some of those same mistakes maybe.
But whoever he was working with, and he didn’t just have this experience with one agency, he had this experience with multiple agencies. And I’m not throwing every agency under the bus because there’s a place for them. But if your primary marketing strategy is hire agencies, you are setting yourself up in the long run to never be as successful as you otherwise would be.
And I think again, this is why it isn’t a set it and forget it, ’cause I think if you – ’cause we do have clients at Seller Accountant that maybe want to be a one man shop and live on the beach and try to do the four hour work week or whatever. And just know listener, dear listener, just know that if that’s your model, you need to have an extremely tight SOP for managing that vendor and holding them accountable because no one cares about your business like you do.
And I do agree with you, Brittany, and every business type is a little bit different and every function’s different.
Like I think up to some level of revenue, an agency in an area might be great. Accounting again, there aren’t a whole lot of $120 million companies that need to have an outsourced accounting team. The nice thing about accounting is that you can outsource it up to a much higher revenue point, which is why you and I are successful in our businesses, Brittany.
But like if you think about, because accounting is back office, because it’s a lot of systems, that’s a little bit different than ooh, I have to really understand my customer’s needs. I have to really understand exactly which keywords matter right now, and I have to be ready to pivot really quickly around my marketing strategy. That’s gonna be one that you’re gonna in house much, much more quickly than some of the other functions.
And I’ll tell you why I think that outsourcing accounting is a good idea, but outsourcing, marketing isn’t the reason why. It’s because with accounting, there is a right answer. And if I’m doing the job, you can see that the right answer is there. So with accounting, it’s did I capture the transactions? Yes. Did I reconcile the accounts? Yes. Have I correctly reflected Costs of Goods Sold? Yes. Are sales reflected correctly? Yes. To have been successful is a very clearly defined parameter, right? This is a little bit different with if you’re hiring the CFO level or the advisory level, but when it comes to like, get my accounting right, it is very clearly defined what that means.
But when it comes to marketing, it’s like there is infinite upside if you nail it, right? If I spend double the amount of time on your accounting, or I am 10 times more smart than this person, are you gonna have a way better result? No, honestly. If this person is competent and I’m competent and we’re shooting for correct numbers in a timely manner, then there is a right answer.
But with marketing, it’s if you’re investigating this and you’ve got a social media game going on and you’ve got some Facebook ads going on and you’ve got an email game going on, like there’s literally infinite upside to an effective marketing job done. That is not true of accounting. So that’s why I think that outsourcing accounting is appropriate because check the box, get this right, but you’re missing up on infinite upside if somebody just doesn’t care to the degree that you do on the marketing side.
Makes so much sense. Yeah, this is great. See, this is, I’m learning how to sell my own services here, Brittany. Thank you so much.
So hey, another question here. What are some like financial best practices, or maybe even, ’cause you’re talking about like operational strategy, other best practices that you think – ’cause you and I are, part of our job is to support our clients by looking into 2023, kinda looking into the future. But what are these things that you think are really gonna give maximum results in the next year?
So I feel like managing very strongly the things that I would consider like cost of sales. And thinking about it this way as far as like financial best practices. So you think about the way that like a company is structured financially on a profit and loss. You have your revenue, you have your Cost of Goods Sold, but then everything else kinda gets buried in general overhead, right?
So like really understanding what your cost of sales are and managing the margins of every single one of those buckets. So I would consider cost of sold sales to be like the fulfillment costs, because if I’m selling online, I can’t sell online without paying shipping. Marketing spend, usually, like if I’m selling online, I usually have to have some sort of marketing spend that’s generating those sales. The channel fees, the payment processor fees, and the Cost of Goods Sold. Those are like the things I would really consider like cost of sales. And so watching all of those factors in the way that they reflect, like a percentage of sales. So like how is my marketing trending as a percentage of sales? How is my fulfillment cost trending as a fulfillment of sales?
How is my Cost of Goods Sold trending as a fulfillment of sales? And then understanding the difference between like those buckets and the general overhead that’s more of the fixed cost that hopefully isn’t moving with sales in that same kind of way. Like I, I feel like our clients’ best practices are that they are really watching those things because in this day and age, you have so much variability around that, and these costs just shoot up and you don’t even necessarily see that they’re shooting up unless you’re like looking at that bucket.
So think about what’s happened from the shipping, the fulfillment, and the shipping perspective for the last two years. Like shipping costs have gone way, way up. And marketing spend has gone way, way up. So when should you take action? Like, when should you consider moving carriers or when should you consider changing your 3PL or when should you consider like firing that agency and doing it yourself, or hiring a different agency?
You need to be looking at all those buckets and the way that they’re moving so you can take quick action when you see those variable costs begin to move in a negative direction, instead of having it be buried in a big bucket that you’re like, I’m not doing quite as well, I don’t really know why I’m doing quite as well, I’m not really sure what’s happening here. When you break it up that way, you know exactly what needs immediate action. So that’s just the best practice that I would consider.
Love it. And I don’t have a ton to add to that, but I think this is another reason why having really good accrual accounting matters so that these year over year, month over month metrics make sense. And then I think one of the areas where e-commerce financial management is different than kind of normal businesses is what you just described, where there are more directly attributable costs in the businesses that you and I serve, Brittany, than in a lot of other niches. And so you may need to employ a different organization of your accounting than maybe your tax guy would love to do.
And so just be aware of that. I think the most important underutilized KPI is one that I don’t even know what to call this yet. Maybe you can help me come up with something clever here. You’re a guru after all, right? But the ads plus COGS ratio. So you think about there are some uncontrollable, you listed a bunch of cost to sales there, Amazon fees, or the 3% PayPal fee, or other logistics cost.
And there’s some level of controllability in those, but not a ton. Two metrics that you mentioned that have the largest strategic value are what is my landed product Cost of Goods Sold, and then what is my total advertising cost of sales? And I would argue strongly, I would go to the mat on this one, that the sum of those two is one of the most important things to keep an eye on to the point where I would say if the two of those added together are more than 50% of your budget, you do not have a scalable business.
And if they’re less than 40% total, you have an extremely scalable business. And just to add to what you say there, I think that understanding what that true cost of sales is and then understanding which of those represent levers that can actually be pulled.
True. True. ‘Cause you don’t have a lot of, you don’t have a lot of control over some of those things. However, one of the things that, I mean as an example of something that people assume that they have no control over but they don’t dig into it enough to see is like payment processor fees. You can actually change up who – like, like if PayPal is a more expensive option, you can shut it off, right? As an option for your clients.
And a lot of people don’t realize this when they look at considering using Shopify Pay, they’ll say Shopify Pay is this much, PayPal is this much, and PayPal’s fees are lower. But did you know that Shopify actually imputes a charge every single time you use a payment processor besides themselves? And so are you considering not only their cost, but also the additional imputed cost that Shopify charges you for not using their payment processor? And so like when you really start to dig in on some of this stuff, you see like you have more control than you think you do, but it’s true.
Like at a certain point, like Amazon’s fee is set. You’re going to pay what you pay. Do you have to use FBA or could you use a local 3PL that still offers FBA level Fulfillment by Amazon two day delivery, but doesn’t charge FBA fees.
And to your point, I think as we get towards the end of the year here, this is the time, friends, to do the thing you hate doing. You’re gonna pull up your accounting system and you’re gonna actually have to look at it. We’re gonna have to look at these categories because what you just said, I mean, that may, something like you just mentioned, wow, I didn’t realize what I was actually paying for some of these merchant processor fees. Or maybe I didn’t realize how much storage fees I was paying, or something like that. An “aha” related to a couple of those categories can add up really quickly to generate a 5% improvement in profitability. For a million dollar business, that’s a $50,000 pay raise for you, the owner, right?
And so this is that time of year where if you’re not doing it, you get your final ads set for Q4 and it’s time to snuggle up with a cup of hot cocoa or whatever and really dig into your numbers. And I just think you’re exactly right there. I think there is always, what do they say? There’s always money in the banana stand. There’s always something hidden on your P&L that if you’re willing to take the time to look at it, you can.
And I’ll be honest with you, I’m a CFO. Like I looked at my P&L the other day, Brittany, I was like, Huh. And I’m like, 500 bucks a month for this software that I haven’t used in a year. And so it happens to us, right?
I know. All the time. All the time. Yep. So true. So true. I had a client the other day who does probably about $60 million a year and asked us to audit their shipping costs with their 3PL. And as I was talking to ’em more and we were discussing some of the things that they were concerned about, like they had found that their 3PL was overcharging them by like over a million dollars last year in shipping costs because they were, who knows, like basically charging them for labels, shipping labels that weren’t for them, or they were like double charging them for shipping labels or they were, you know, all sorts of stuff, and I hadn’t even thought about that angle of it. Do you know what I mean?
Have you considered some of your vendors that you have relationships with? Have you considered just doing a simple audit of their service with you to make sure that you’re not being overcharged for things that you don’t have control over? Like in this case, a 3PL owns the shipping relationship, and they don’t have the relationship with USPS, so it becomes harder for them to audit this stuff.
The 3PL just basically requests a reimbursement for shipping label costs. But you know what? Like at the end of the day, that wasn’t, they were able to regain quite a bit of money by just digging in on some of that stuff. So consider all, consider everything. Consider it all.
No, actually it is not like a malicious vendor. It’s just that they’re automating things too, and it’s your job to mind your own business. We actually had this happen. We partner with a company to help us with payroll, and turns out that they were overcharging us for insurance, so this can happen anywhere. And it wasn’t malicious and we worked it out and we’re like, oh, this is great. We get 12 grand back. It wasn’t a huge amount of money, but it’s, it makes a difference. And so it’s really good advice, Brittany. I think just the more, again, the closer to the center of your bullseye this vendor is, or this level of expense, the more energy this is probably worth for you.
But carving out, especially if you were to look at your P&L, look at your top 10 expenses, your top 10 vendors, whatever it is you wanna look at, it’s probably worth having somebody dig in for a couple hours, whether it’s a team like Brittany or mine or somebody within your own company to just make sure that you have confidence that the system is set up in a way that has integrity.
Hey, let’s talk about, speaking of the largest line item on most of our P&Ls as e-commerce sellers. Inventory management, Brittany, is such a pain in the butt. It is so complicated. It is probably the one thing above anything else that creates the most anxiety for multimillion dollar sellers, and thankfully your team at Ledger Gurus is finally doing something about it. You guys are really going knee deep into this, how do we help sellers get better at inventory management? Maybe you can give me a little bit of an insight into what really gives people problems with inventory, and then we talk about how you guys are helping solve that problem.
Yeah. So, it’s so true. Inventory is such a big problem, not only from an operational side, but also from a financial side. Like before sellers even consider is my Cost of Goods Sold reflected correctly, they still have headaches around what’s on order? What’s on hand? Where’s my inventory? Where did it go? Hey, we did a count and my inventory levels are way lower than I thought they should have been. Where’s my inventory even going? How much do I need for next year’s busy season? Like inventory operationally is such a headache long before you ever factor in and layer in the financial side of things.
And so for the last several years since we really got into the space, we’ve been really heavily focused on e-commerce for about five years now. We really helped our clients primarily who were not necessarily an inventory tool by providing a service that augmented on the financial side what an inventory tool would’ve been doing.
But we found that we had more and more clients that, for purposes of operational maturity, were moving into inventory tools, and I’m hugely supportive of that. I do feel like I’ve said this before, an inventory tool will not compensate for bad processes. In fact, it will only amplify the effect of bad processes. And so if you feel like getting an inventory tool will save you from that, you’re wrong. You’re going to have to implement good processes around inventory, whether you’re in a tool or not. An inventory tool will simply help you streamline those processes. It will make it easier, but certain things like receiving inventory into your warehouse, doing periodic inventory counts, reconciling bills before you pay them, having some sort of process for receiving returns and identifying whether they should go back into inventory or not be put back into inventory, some way of identifying product that’s leaving your floor for non-revenue consumption, like marketing initiatives or friends and family gifts or theft.
Like all of these things, you have to have some process in place for capturing that, or else you’re going to have continual issues with inventory. So before moving into an inventory tool as an operational task is a really good move to make, but it won’t save you from bad processes. But what we found was that more and more of our clients would be in an inventory tool and they would’ve paid a ton of money ’cause implementations are expensive, and they would’ve put it in time, a ton of time and effort, and the learning curve on figuring out how to use an inventory tool and all that stuff.
And then six to 12 months down the road, they were coming to us and we were saying, you’re in an inventory tool. How much can we rely on the reports in your inventory? And they were saying, not at all. They were saying, my inventory data is not reliable at all. It can’t be relied upon at all. And we found that we were still having to do the processes that we normally would be doing for them manually to get to good COGS numbers because the data in their inventory tool couldn’t be relied upon.
And I had this just moment. It was actually while I was at Scaling New Heights over the summer. I had just had it. I was like, I am so tired of clients spending the time and the money to get into an inventory tool only to have it be a failed implementation. And it’s not because the tools are garbage. And it’s not even necessarily because the implementers were garbage because they weren’t. I’m good friends with a lot of these people. It’s because clients needed long term support to be able to be truly successful in those tools.
They needed, when they changed something on their channel and now they entered a new bundle, and now it was hitting their inventory tool in a way that the inventory tool wasn’t quite set up right to decrement the items of that bundle correctly. And now suddenly they don’t even know what’s happening, but all the inventory numbers are wrong and all the Cost of Goods Sold and they have no idea why and they have no idea how to fix it. And everything was running fine, and it’s now it’s a mess.
And I realized like I’m, I would consider myself a QuickBooks power user. Like I would consider myself capable of solving really virtually any problem somebody had inside QuickBooks or customizing almost any workflow inside QuickBooks ’cause I know the system that well. And I thought if I could be a power user of these inventory tools at that same level, then when they had these problems and I could just be like, oh, let’s take a look at it and dive in and troubleshoot it and figure out what was going wrong and fix a few settings or tell them that they needed to introduce a different process or handle things differently and solve for them the problems they were having around inventory the way I’m capable of solving accounting issues in QuickBooks. I thought I would truly be adding value at that point.
And I suddenly realized that of all the things I could possibly do for inventory, that was the number one thing my clients most needed from me was the ability to succeed in their IMS system because they were working with me. And so I was like how are we gonna get there? How are we gonna get to a point where we know the inventory tools well enough to troubleshoot them? We’re going to have to get into the implementation game because that’s the only way you learn the tools at that level and at that degree.
So that’s what happened. June, I went and formed all the relationships with all the inventory vendors that were there, and by August we were attending their boot camps for their different tools. And by the end of August we were launching our first implementation. And now here we are, the end of October, and I’m neck deep in about four implementations now, and I have people banging down my door for more all the time.
And we have clients left and right, our own clients, that we’re now solving. We’re already able to say oh, we now know why your system isn’t working. Oh, we now know why this bundle is not decrementing correctly. So we have all of these clients that we’re helping now inside our own walls. We primarily started with focusing on DEAR and Cin7 and Finale as the inventory tools that we really are going deep on.
So our clients that are already in those tools, like our fourth quarter initiative is to get a hundred percent of them successfully utilizing their tool correctly. We’re building our own learning library around like how to use these tools, how to do different things in these tools that our clients will have access to. Like we’re really, our number one mission is a hundred percent success rate with implementations that we do and a hundred percent success with tools utilization with clients that we’re working with. Because we realize there’s no single thing we can do that would make a bigger difference than to own that in that way.
Wow, that’s such a great service and really neat, Brittany. I mean, you mentioned two things just as takeaways there, guys. One is I agree that this is first and foremost an operational process question. So if you’re asking yourself right now, Brittany just said some really cool things, we can definitely call her. She would love to help once her waiting list goes down a little bit, but if you’re looking for the Idiot’s Guide, the first three steps or whatever to doing this, one is you probably need to whiteboard your process, the process, your operation, how do you receive inventory, how do you count it, how do you know where it is?
And then how do you then use that process to interview the available tools that are out there and find a tool that gives you as much leverage as possible to successfully implement your process. And you may be like, what’s a process or you’re gonna be like what is successful implementing a tool. And I think at that point, partnering with an implementation firm like Brittany’s could be really helpful.
Are there any other keys to, whether it’s inside your service or are there any other keys to success when it comes to aligning those stars that you mentioned so that someone wakes up at the end of the quarter and they’re like, okay, I can stop worrying about that, ’cause that data set is reliable now.
Are you talking about like specifically within an inventory system? Like –
Yeah, less like software specific, but more like any other best practices or process best practices that you’re stumbling onto. ‘Cause now you’re, what, five or six months into this. This is a thing. Like you’ve got some at bats.
Yeah. Yeah. I would say I would say it’s the company’s job, the users of the tools’ job to have a complete handle on quantity, where it is, where it’s located, what’s coming, what’s going, what’s been brought in, and it’s the tool’s job to track the value of all of that. And that’s really what it saves you from. So whatever processes you need to put in place so that you know the quantity of what you have and where it’s at. And this is, so this is the service that we were able to add onto for our clients is if somebody can tell me the quantity, where it is, what’s it at, what’s on order, what’s been sold, what’s been returned, what’s in the warehouse, I can usually give them a value, right? Because we can back into that pretty easily. A tool will automate that for you.
But our clients that we found that we had the hardest time giving them good COGS numbers were those who couldn’t even tell us the quantity movement, right? They didn’t know what they had in their warehouse. They didn’t know what had been returned. They didn’t know what had been sold. What’s been sold we can look up ourselves, but what they gave away, what they sent to influencers, what they purged for family and friends at Christmas time, what got stolen, what got broken, what got lost? If they had no idea what the quantity was of all of these things, then we had no ability to add value to those quantities at all.
So that’s like the one thing. Operationally, I don’t care if you’re in a tool, if you’re not in a tool, like that’s the one process that as a business owner you’re primarily responsible for coming up with a solution for is a process that allows you to have total eyeballs on what and where, you know?
Yeah. I love it. That’s really well said. Awesome. Thank you. Well guys, if you’re feeling really overwhelmed with your inventory management, it may be worth reaching out to Ledger Gurus to try to get some support there. And Brittany, I have several CFO clients that have somebody else do their bookkeeping, and one in particular is really continuously frustrated with, with a large implementation that has always left a little to be desired. We’ve continued, they’ve continued to build integrations on integrations to try to solve those problems we’re talking about, and they just have such a complex catalog that the common sense check of, do these COGS make sense each month normally is a no. And we’re just talking about eight figures in revenue. That’s a real scary thing. And so I may actually refer them to you here, so thanks for your comments there.
Alright, so let’s talk about something fun for me, you and I – believe it or not, guys, we do not just think about accounting all day long. We don’t. We try not to. We have kids, we have spouses. We love stuff. And I hear, Brittany, that you have built a ballin’ hot tub. And that my audience wants to hear about it. Tell me about this hot tub.
I built it out of a stock tank pool. Do you know a stock tank is, Tyler?
I have no idea. No, it’s okay. I have no idea –
It’s like a, it’s like a one of those big bowls you stick out in the middle of a field and you like water your cattle from it. The one that I bought is about eight feet diameter and it’s about two feet deep and it’s just made of like galvanized steel. And so I had just found, I’d heard from a friend of mine that he had built one of these, and I was suddenly like my heart and soul were like taken over with the dream of how cool this was. And so I had this like side yard in my house that was tucked away and was so hard to maintain from a landscaping perspective that we had just turned it into a wildlife habitat and let it just run free and wild. And I was done with that.
And so I was like, this is the perfect little area of the yard. We can build like a cute little patio around it and put in this pool. But when you put in those pools, unless they get a lot of sunlight, they stay quite cold. And so I have kids. I have five total, but my two youngest who I was really building this for were nine and seven. And they just don’t have a lot of tolerance for cold water. I don’t have a lot of tolerance for cold water, so I don’t blame them, but I wanted them to go out and spend six hours straight in the pool in the summer. Do you know what I mean? And no, don’t come in here constantly and tell me how the water’s too cold.
So as I started thinking about this, and I had my friend who had done a much smaller version, he had basically converted a very small stock tank into a kind of a one person water hot tub for himself. I looked into this and found, it’s actually pretty simple. Basically all you do is you run a, an outtake from the pool, and it goes up through like a tankless propane water heater, and it runs through the water heater, and then it pumps itself back in.
It doesn’t pump itself. I had to find a pump, and that was by far the hardest part of the whole thing. You have a pump that pulls it from the pool, throws it up through the water heater and back into the pool, and I found I could take this huge pool and I could heat it to over a hundred degrees within about an hour and a half, which I was shocked about the speed of how quickly this pool would heat. And the best part about it has been I have all these teenagers, and then I have all these little kids. And so the teenagers will use it as a hot tub in evenings, and then the little kids will use it as a play pool all day long. And it’s so great to have this thing that meets both of those needs.
Because you can’t, if you just bought a hot tub, you can’t really just be like, hey, kids, just go play in the hot tub all day long. You can, but you typically don’t. So the hot tubs, the stock tank pool sits at about 88 degrees in the middle of the day, and the littles love it, and they’ll stay in there for six hours like I wanted them to, and then that night, the teenagers will fire up the water heater and turn it into a hot tub and hot tub with a friend. So I feel like I have found like the coolest life hack ever. Coolest life hack. And then I built, I had my son build like a patio around it, and so it has like little lawn chairs. It is now this like little oasis in the side of our yard that used to be like the wildlife habitat run over and not to be disturbed.
It’s the coolest feeling ever when you like get to apply some like ingenuity to, to solve a problem. And then it’s even better when your kids are like, Mom, you crushed it. This is so cool.
I know, I know.
Brittany, the last segment of each of our episodes is, you’re talking about life hacks, is related to life hacks or habits or practices in our zeal to guarantee people a return on their invested time. For this podcast, we always ask the same question. I’m just gonna ask it to you. What practices, habits, things that you do each week, each day, give you an unusual either competitive advantage or return on your investment?
Oh, that’s a really good question, and I actually get this question a lot and I don’t actually feel – I feel like a lot of people have a really, really great answer to this question because they have a really great morning routine that sets them up for success the whole day, or they have this thing that they do, and the reality of it is that these types of things are like the hardest thing for me. I am the most inconsistent person that I know across almost every area. Like I’m a true visionary, which means that I am also like a little inept when it comes to many areas of my life. And so one thing that I have found that for me really helps me is, so if I don’t have meetings, like set meetings on the calendar, I will find any reason to not be sitting at my desk.
I’ll take myself on a drive up the canyon. I’ll take myself to breakfast. I’ll call my sister. I’ll decide I need a morning nap. Do you know what I mean? Like I will force – like as soon as I sit down at my desk, I almost become a workaholic and you almost can’t peel me away, but getting me to my desk is really hard. And so I have found that for me, I need to put a meeting on my calendar first thing in the morning. There needs to be some reason why I have to be sitting at my desk to engage in this scheduled activity where somebody else is gonna expect me there as early in the morning as possible. And at that point I can run with it and I’ll have a very productive workday.
But if I don’t get myself to my desk first thing in the morning, I will, if I don’t have a meeting till two o’clock, I won’t sit down at my desk till two o’clock. So that has been my, this has been me like bullying myself into being productive is to force early meetings upon myself. That’s, I hate to say that’s my life hack because it’s that bad, but truly I am the most capable person I know and the most incapable person I know. You know what I mean by that? Yeah.
Totally. No, but I feel like that’s useful. I think one of the most powerful insights as CEOs that you and I can have is just knowing ourselves. Like sometimes it is the dumbest stuff. If I made it really idiot proof to journal, meaning I literally had a journal and a pen sitting in the chair where I drink coffee, then it required zero discipline to adopt a journaling habit. But sans that making it idiot proof hack, I made a zero. In other words, what I learned about myself is I did not possess the internal motivation and drive to adapt that habit without positioning myself to be successful.
And I think you’re talking about something similar where it’s like, okay, I crush it and have a lot of energy to do what I need to do if I can just get in the saddle. But man, because I’m like extroverted and a visionary and I like to be out playing, like getting in the saddle is hard, so I’m gonna have to, I’m gonna have to fake myself or like you said, bully myself into the saddle. Once I’m there, I’m good. I think that’s actually just wisdom. That’s wisdom, knowing here’s where God’s made me really strong and here’s an area where I’m not quite as strong, but I can hack my way. That’s actually why you don’t need a hack. If you’re already a genius in an area. You need a hack if it’s something that you’re having to like, eh, fake yourself into the, into that zone of genius. So yeah, I love that.
I’ll tell you what though, I don’t feel like I have a habit life hack. What I feel like I have is a belief mind hack. Does that make sense? So I’ll tell you what I feel like my number one success is from a mindset is that I truly believe that I can learn anything and that it – like inventory implementation right now is kicking my trash. But I know two years from now I will be a true master in this space. Like I know two years from now I will be a power user on all these tools, and therefore, as I’m like experiencing all this discouragement of the learning curve that I’m on right now, like I know that’s coming. And it’s just a simple matter of like, and I think anybody is capable of that. They just don’t necessarily believe that’s true.
Because like anything we engage in, repeated exposure over time, you will become a master of if you stay in the saddle of that long enough. It’s just that a lot of people become discouraged too early. I never become discouraged because I know – that’s not true that I never become discouraged. I never become discouraged to a point of quitting because I know enough time in the saddle will make me a master at something, even if it’s slow in coming. You know what I mean? So I fearlessly engage in literally anything from developing inventory implementation to deciding I’m gonna create a stock tank pool because I absolutely know that I will eventually master whatever it is I’m trying to do if I stay at it long enough.
And friends, I think you just received a lot of insight into what has made Brittany a monster CEO in our space. That’s really great. Really well said, Brittany. And I just wanna thank you. Thank you for joining the show, for being on Return on Podcast. I’m gonna make sure that your website is posted in the show notes where people can find you. Maybe just a quick, what is somebody going through right now, what are they feeling, what does their business look like, where they need to reach out to Ledger Gurus and get some help?
I would say if you feel like you’re flying blind, if you feel like you have, you do not have – if you hear me talking about like these different cost categories and how you can become strategic and you feel like “I do not have the information I need to actually even have that insight,” then you definitely need me or Tyler. Both of us are very capable. From a, from a iMS inventory system perspective, if you’re like, I’m just dead in the water right now, my inventory tool, I spend a ton of money on this implementation and it’s just not working for me, I would love to say that I am your girl and give me six months and I will be.
Right now, our primary focus is on existing clients to get them successful in the tools that they’re using, but we are learning so so much and within the next six, 12, 18 months, we intend to become power users to the point where we could resolve, troubleshoot, fix any system in an IMS system the way that we can currently clean up any set of books and resolve any QuickBooks issue, we can fix any IMS system and resolve any issue. That is my goal and my hope.
Gonna happen. I believe it. I believe it. Well, Brittany, thanks again and again, you guys, we’ll make sure we post her links in the show notes. So with that, we’re gonna go ahead and close today’s show. Thank you for joining Return on Podcast. Brittany and I don’t take for granted that you would gift us this 40 or so minutes of your life. And so thank you. Thank you for giving us your attention. We both sincerely hope that you grab a nugget or two out of this that will give you a return on your time and that will drive you towards your goals. And so with that, I’m gonna say goodbye. We’ll check in with you next week on the next episode of ROP.