Matt Edmundson: Welcome to the show.
It's great to be with you.
Like I said, Nathan and I, we're gonna be talking about all things finance.
But before we get into that, let me mention to you about the
website eCommerce podcast.net.
If you haven't visited us already, do come check us out.
There is a newsletter you can sign up for that.
And every week we email you the notes, the transcript notes, the sort of the links
to your inbox, just come straight through.
Yes, it does.
So you don't even have to go pick it up from the website, we'll just email it
to you, but you have to be subscribed to the email for that to happen.
So why not come join the rest of us on there.
Now, today's episode is brought to you by the eCommerce Cohort.
The eCommerce Cohort is our monthly mastermind group that you can come join.
Be great to see you in there.
Every month we have great guests coming in and delivering some amazing workshops
around eCommerce and how we can utilize that in our own eCommerce businesses.
Super practical, super helpful, and that's just great actually.
We go through them together as a business.
You can do it as an individual, you can do it as a business.
Come join us.
It's pretty cheap to join.
Find out more at ecommercecohort.
com and I will see you in there.
Now, before we get into the conversation with Nathan let me give a shout out
to Ben Leonard, actually, because Ben was the chap that introduced us.
We also have another mutual connection, which we'll get into in a little bit, but
there's a chap called Ben Leonard, who has been on the show a couple of times.
Now, Ben Leonard, if you haven't got it already, do check out his book, quick
plug for his book called Quit Stalling and Build Your Brand by Ben Leonard.
It is a great book, just telling you the journey that he went
through in setting up and building an eCommerce business to sell it.
And he gives you all the tips and tricks that are in there so you
can make it work for you as well.
So if you haven't done so already, do check out his book.
Great book.
Very good read.
Lots of practical advice.
And if you look at the picture on his back, I don't know
if you've seen this, Nathan.
Oh, smacking the microphone.
The picture on the back, he looks about 12, but he's genuinely not.
But do check that out.
You don't need an MBA to crush it in eCommerce, it says on the cover.
So do check out.
That now, Nathan, let's talk about Nathan, the entrepreneur
extraordinaire and the brains behind the 12 million success story, freeup.
net started with just 5, 000.
Now today he's rocking the business world with hits like Ecom Balance
and Outsource School alongside his partner, Connor Gillivan.
Now.
He's been on a lot of podcasts, he's done all the social media stuff, but for some
reason he has agreed to come onto our show and share his knowledge and wisdom and
I'm looking forward to the conversation.
Nathan, great to actually finally meet you, how are we doing?
Nathan Hirsch: Matt, I'm doing great.
I'm in tired dad mode.
I don't know if you've been there before or it's just a constant tiredness
that doesn't go away, but it's Monday morning, so I'm feeling pretty good.
Matt Edmundson: Actually, I was just thinking, is it Monday
morning or is it Tuesday?
No, you are raight.
It's Monday evening for me but the time differences.
And I can definitely emphasize tired dad, having 3 kids.
But I think my kids might be slightly different age.
My 2 boys are at uni.
, My daughter's, at college, she's just about to go to university,
maybe, possibly, I don't know what she's going to do.
But yeah, so very different life stage.
So I empathize fully having been there.
How are you finding it?
Nathan Hirsch: It's great.
My, my son's five months old, so I'm still new to all of it.
And we're getting a lot of help from my wife's parents and my parents.
Thank you.
But it's been great.
So I have nothing to complain about at all.
Matt Edmundson: Is this your first child?
Nathan Hirsch: Yeah, it is.
My, my wife and I were foster parents.
We've been fostering teens for a few years.
So we've
Matt Edmundson: Oh, wow.
Nathan Hirsch: but for first bio kid.
Matt Edmundson: Wow.
Wow.
Awesome.
Fostering kids, man.
That's really good friend of mine, a guy called Phil Watson here in Liverpool.
I don't know what his official job title is, but he works for the
council here championing fostering and he does all kinds of crazy
things to champion fostering.
And so I've a lot of respect for him, a lot of respect for what he does and the
kids he brings in are just incredible.
And so well done for doing that.
And teenagers to a five month old.
Nathan Hirsch: It's way different.
It's a whole different experience.
Matt Edmundson: Yeah, no doubt.
Absolutely, no doubt.
Whereabouts in the world are you?
Nathan Hirsch: I'm in Denver, Colorado.
I don't know if you've ever been, but I've lived here for a few years.
It's a place that's tough to beat.
The weather's great, even in the winter.
Lots to do outside.
I've got my whole family to move here, so it's a good spot.
Matt Edmundson: Never actually been to Denver, Colorado, but I've been told,
and you correct me if I'm wrong is it a good place to go ski at Denver, Colorado?
Nathan Hirsch: Yeah, not in Denver, but in Colorado in general you're
always an hour away from something.
Yeah, skiing is great here.
I'm a big snowboarder, so it's fun to get out there.
Matt Edmundson: Okay, you were until you had a five month old baby, right?
Nathan Hirsch: I haven't done much this year for sure.
Matt Edmundson: Can I just say, just a little word of caution, there's been
two times in my life where I've put on quite a significant amount of weight.
The first was when I got married and the second was when
we started having children.
So just because life just takes on a very different season.
Just bear that in mind.
So tell me about EcomBalance.
Tell me about the story behind that.
Nathan Hirsch: Yeah.
You mentioned FreeUp, our company before it, and even going back before that, I
was a 20 year old entrepreneur running this pretty large Amazon business.
I started in 2008, 2009, and I ignored bookkeeping and struggled with it.
I tried doing it myself.
I tried hiring college kids to do it.
I tried dumping it on my CPA at the end of the year.
Never really had a good understanding for what my numbers look like every month.
And it was hard to make decisions.
And fast forward ahead, when we started free up, my partner
and I said, that was crazy.
Let's not do that again.
Let's hire a bookkeeper from day one.
And that ended up being one of the best business decisions we ever made.
Not only did we have.
Immaculate books every single month that we could make decisions on.
But when we went to sell the business four years later, we had clean books going back
to day one, and that helped us pass due diligence and eventually sell the company.
So that kind of gave us the idea of some kind of finance business.
We didn't know what exactly.
But we started consulting with different entrepreneurs,
different eCommerce sellers.
After we sold free up, we quickly learned that we hated being consultant.
So we didn't want to do that.
But the common theme was that everyone just had a mess.
When it came to bookkeeping, no one actually knew what their numbers were,
which made it tough for us to consult.
We had the idea to launch our own eCommerce bookkeeping business.
We actually launched a second non eCommerce brand called Accounts
Balance for agencies and software companies, but all around the fact that
entrepreneurs need to know their numbers.
Most of them hate bookkeeping, they don't speak bookkeeping, and
we've tried to approach it from an entrepreneur's standpoint.
Make it as easy as possible to get numbers you can understand each
month and make decisions on them.
Matt Edmundson: very good.
Very good.
I actually similar, not similar stories, but similar background in a lot of ways.
When I came out of uni one of the things that I, cause my university
degree was accounting and law.
And I came out going, I never ever want to be an accountant, but what
I did do is I set up a side hustle doing bookkeeping for other companies
because I figured no one wanted to do bookkeeping because it's just horrendously
boring, dull, and so on and so forth.
And it turned out I was right, actually.
I don't do the bookkeeping thing anymore, but I've always learned that finance
and understanding the numbers is super, super important for eCommerce companies.
It's intriguing that you've gone almost the opposite way to me.
You've gone, now let's go get into bookkeeping, let's do that.
So to let listeners know and if you're watching this on YouTube, just
letting you know, there is a chance We will be joined by Jared Mitchell
on this show, who is a, who has been a guest previously, on the podcast.
Jared is a good friend of mine.
And also, Jared, right?
You have worked with him.
And so I did that thing when I went to your website, I looked on your
website, and I saw Jared's podcast.
Picture on there, I thought, I'm gonna text Jared and say, Jared,
gimme some really awkward questions to ask Nathan . And he was like, I've
got the best questions for you, man.
So he started texting me a whole bunch of stuff.
And then I said to him why don't you just come join us?
We're doing the recording in 20 minutes.
And hopefully Jared's internet will be working and he'll be joining us soon
just to let you know if a third voice starts appearing in the background.
That is why first time we've ever done it on eCommerce
podcast, we'll see how it goes.
Nathan's game, Jared's game, I'm game, so see how it all, how
did you meet Jared, by the way?
Nathan Hirsch: Yeah, so whenever you start a company, not just eComBalance, this is
going back to free up or outsource school.
You never really know how it's going to go and we have the mentality of
being upfront and honest with clients.
We offer clients either discounts or free months of bookkeeping or whatever it is.
And, In exchange for feedback and allowing us to break everything.
And we try to be upfront and honest that there's going to be processes
that aren't going to work, that we're going to have to build on.
And part of the deal is you're going to get a good price and
some discount or free bookkeeping.
And in exchange, we want feedback.
We want to know everything you like, everything you hate.
What's working, what doesn't work and we'll use that to build our team.
So Jared was looking for a bookkeeper at the time.
He was nice enough to be one of our first beta clients, definitely
went through some growing pains.
Nothing too crazy, but just us figuring out.
Who's our team?
What are our processes?
What are our communication channels?
And I'm not a bookkeeper.
My business partner's not a bookkeeper.
To run a bookkeeping business, we had to hire a lot of bookkeepers,
hire a controller and everything that, that goes with that.
So a whole adventure that was a lot of fun, a lot of hard work.
And Jared was nice enough to give us feedback and bear with
us through those growing pains.
And now, hopefully, it says we're have this under control and have
a good monthly process, but there was definitely some element of us
figuring stuff out in the early days.
Matt Edmundson: Fantastic.
Here he is.
Let's see if I can pull him in here.
Let's just add him to the guest list.
No, let me assign him that.
There we go.
Let's go on here.
Here he is.
Man of the hour.
Mr.
Mitchell, how are you doing?
Jared Mitchell: Hey, what's up, Matt?
Good.
How are you?
Matt Edmundson: Yeah, really good.
Yeah really good.
There's three of us on screen now, which is, like I say, first time
ever for the eCommerce Podcast.
Super excited.
So thanks for joining us, Jared.
Jared Mitchell: Yeah.
Thanks for having me, man.
I'm honored.
Matt Edmundson: I know, it's great.
I was saying to Nathan, when I saw that you were on your beautiful face was on
his website, I thought we've got to do something together and and just grill him.
Why not?
And Nathan's up for it.
Nathan Hirsch: Yeah, Jared, great to meet you.
I actually don't see you on screen, so I've never actually
done a video call with you.
I don't really know what you look like outside of your picture,
but great to hear from you.
Jared Mitchell: Prepare to be disappointed, my friend.
Matt Edmundson: So you guys have never actually seen each other, you've
worked together all this time but you've never actually seen each other.
Nathan Hirsch: Yeah, I've done a bunch of calls and stuff, but I don't think
we've ever done a Zoom or anything.
Matt Edmundson: Wow.
Jared Mitchell: Yeah, I've only cyber stalked, social media stalked Nathan.
So that's about it.
Nathan Hirsch: Sounds about right.
Jared Mitchell: Yeah.
Matt Edmundson: Wow.
Wow.
Mr Mitchell, how's life in California?
Jared Mitchell: It is rainy and the reason I say it like that
is because it never rains here.
And so it's something I should talk about.
Matt Edmundson: I just feel the need to offload, it's raining,
I don't know what to do.
Jared Mitchell: Yeah.
No one knows what to do.
It's a big deal.
So yeah, man, I'm doing really well.
How about you guys?
Nathan Hirsch: Life's good.
I was telling Matt, I'm in tired dad mode.
My son's five months old and just trying to learn how to be a dad and
wake up six times throughout the night and still work the next day.
But it's tough to complain.
Matt Edmundson: It's tough, it's very tough to complain.
And let me tell you, it gets better and better, Nathan, it does I think,
going through the different ages.
Although this is not a show about parenting, but it does get better
and better without a doubt.
Jared, Nathan was saying that you were one of his early guinea pigs
and you're very gracious with him.
I'm curious, why don't I turn the floor over to you a little bit?
Bearing in mind, people who are listening to the podcast are going to be going
I'm in Ecommerce, some of them will have bookkeeping and accounting sorted out,
quite a lot of them won't, and it'll just be one of those annual things,
so let's get into, I guess, why this matters, why it's going to help people
and maybe ask some questions around that.
I don't know if you've got anything top of mind, Mr.
Mitchell, that you can throw in?
Jared Mitchell: Questions or answers to what you just said?
Matt Edmundson: Let me, that's actually a good point, actually.
Why did you go to someone like Nathan for bookkeeping?
What was it you were missing, do you think?
I
Jared Mitchell: is I've been in Ecommerce for about 20 years.
And when I started the only thing available for bookkeeping was like the
discs or CDs that you put in computers and download QuickBooks to your computer.
And I am not an accounting finance mind, but I know enough about it to
understand it and hire the right people.
So with those deep disclaimers I think I came across Nathan.
Through you, Matt, I could be mistaken.
And this was in a time when we had been on NetSuite and had a very bumpy ride.
And I actually, when I dug into it, my accountant wasn't even
using NetSuite for accounting.
I was paying for it, but they weren't.
NetSuite provides accounting and like IMS ERP stuff if you want to pay for it.
And once I found that out I started looking around for new IMS ERP systems
and also for new I guess accountants or CPAs to help us run our books.
Matt Edmundson: Yeah.
And so you came across that.
I don't know if it was from me.
Maybe it was.
I don't know.
When was this?
Jared Mitchell: Gosh, I want to say it was when you had me
on as a guest on your show.
Yeah you just were like, hey, check this guy out and Nathan, you were one of the
maybe three or four firms at the time that I checked out and I wasn't familiar with
what you guys do, how you're structured, competitors, your space and something
I did after is I actually reached out after I hired Nate, I reached out to
probably 10 to 15 of his competitors, not only to learn more, but just to
make sure I was in the right hands and I had the right systems and all of that.
Matt Edmundson: Oh, this is a great testimony for you, Mr.
Nathan Hirsch.
This, you stood up to the 15 people that he was checking you out against.
Nathan Hirsch: Yeah, I appreciate it.
Like I was telling you before Jared came on, we're grateful to anyone
that gives any of our companies a chance when they're young.
Business is hard.
Trusting someone who's not a bookkeeper, I'm not a bookkeeper, is even harder.
And just for someone to give you that trust when you're in year one, or even
the first six months of a business, you want to do your best to make good on
that trust and give a good experience and treat them well going forward.
Matt Edmundson: Totally.
So let's get into this.
So you've got companies that come join you, right?
Yeah.
Does it make sense for somebody who is just starting out in Ecommerce to
think about bookkeeping from day one, to maybe talk to somebody like you
from day one, or is it something that I can think of six months down the
line when I've got proof of concept?
Nathan Hirsch: My mentality for any business we start is we don't
start a business unless we're hiring a bookkeeper from day one.
Even if the business is gonna fail down the line, unless you're
a bigger company like Jared, bookkeeping is relatively cheap.
You're not gonna go out of business because of your bookkeeping expense.
You will go out of business if you don't understand your numbers and
you're making bad decisions based on what the numbers are telling you.
I think veteran entrepreneurs know that, hey, if I'm starting a
business, even if it's a startup, I'm going to hire a bookkeeper.
I think rookie entrepreneurs, they think, Oh, I'll do it myself for
the first six months or I'll ignore it for the first year and I can
always go back and do it later.
And I would strongly argue against that.
Matt Edmundson: Yeah.
Fair play.
I totally agree.
I guess what, if you are starting out in Ecommerce, what would I
appreciate, I need to know the numbers, but what numbers is it specifically
that I really should be looking at?
Nathan Hirsch: Yeah, it's a tough question.
It's different for every single business.
Obviously understanding your sales and what fees.
For each marketplace you're selling on, what that actually looks like.
I think we live in an era of vanity metrics, right?
There's a lot of seven, eight figure sellers out there, but it
doesn't tell the full picture.
So understanding your fees, understanding your cogs what you're
actually making per platform.
A lot of people will be wasting their time on platforms that actually aren't
making them money or where they could just be doubling down on what's working.
But then you dig into, okay, you've got.
Private label sellers, you got wholesalers, you got people who
are just Amazon, you got people who are spreading out across different
Amazon platforms and marketplaces.
And that's where it can get a little bit more company specific with the
numbers that Jared cares about might not be the exact numbers that a smaller.
more isolated seller cares about.
Matt Edmundson: Yeah.
That's a very good point, but I think it's, I think one of the things that I've
observed with eCommerce businesses is
Nathan Hirsch: Podcast,
Matt Edmundson: There are a lot of these vanity, I love this phrase, vanity
metrics that you mentioned, the metrics that we like to chase, but actually
don't really make a whole big deal of difference to our company and not
really should spend a lot of time on.
What are you, what's your experience in some of the vanity metrics
that people get caught up in?
Nathan Hirsch: If you can get that 20 30 percent margin opposed to that seller
that's in that 1 5 percent margin that makes all the difference in the world.
And then where are you spending that money on and looking at it every single month?
Are there expenses that I can cut?
Can I really hire more people?
How do I lower the cost of products?
These are the questions you got to be asking yourself as
Amazon cracks down on margins.
I know when I was an Amazon seller, I had products that I was making 35 40%.
Net margins on which is just unheard of nowadays.
But yeah, that's what you really have to care about.
I'm curious, Jared's thoughts.
Jared Mitchell: Yeah, I think for us, and this is a really important question
for us, because if you're listening to this and you're like me, and you're an
entrepreneur that has more of a marketing mind, this conversation that we're having
right now is something that's probably not a priority for you or on the back burner.
And the reason why I'm saying that is because that's how
it was for me for 15 years.
Number one, because the systems didn't really exist 10 to 15 years
ago, like they do now to support all these metrics and these important
ratios and to have them at hand.
But number two, because it's not your default, right?
But for us, what I've had to discover the hard way is which systems I think
have the best bang for their buck and which ratios work best for us.
For us, we pay.
Really focused attention around CPA and not only that, but from which
channels we're getting the best bang for our buck through marketing.
And then we tie it back into inventory and we have a very close understanding
of how much that inventory costs us to let everyone know we have around 15, 000
active SKUs, the reason I mention that is because this is not I guess when I did
consulting in the past for Neil Patel, we did like thousands of websites, most
of them, the SKU count was like in the hundreds, so if we're not really careful,
we're not about these metrics and about keeping an eye on our inventory and our
margins, we will start spinning our wheels in an area of advertising really fast.
And that does nothing but waste everybody's time.
Matt Edmundson: Very good.
Just explain what you mean, Jared, when you say things like CPA,
for those that might not know.
Jared Mitchell: Cost per acquisition, like how much it costs for you
ultimately to get a customer.
But not only that, breaking it down to how much the fulfillment costs you
coming in through your door if you do your own fulfillment out the door, or
even if you use a fulfillment center.
And how long it takes as well, because there's a cost to that.
Matt Edmundson: Very good.
You want to come in on that, Nathan?
Nathan Hirsch: Yeah, I think something that I've just seen Jared
do a good job of over the past few years is adjusting systems.
If he doesn't feel like it's spitting the right information out.
I know you just change inventory systems because we weren't
getting the correct information.
Cogs, which cost of goods, which is obviously incredibly important
if you want to know your margins.
And the thing about inventory systems is there's a bunch out there.
Everyone loves and hates every single one.
And the ones that the ones that are out there that they just don't
fit every single business model.
So I've seen clients switch two or three times before they find one that really
works for them to get accurate numbers.
But Jared, I don't know how much we want to go into Jared's business
personally, but switched over to a different inventory software to, to
get better numbers, which is only gonna make the books more accurate.
You've probably heard the fa phrase, like garbage in, garbage out.
The bookkeepers are only as good as the numbers that, that they're getting.
And even though I know it was a pretty big move for Jared's business and his internal
team and lots of hours and time were spent, not only doing the research but
actually switching over to that company.
At the end of the day, if you're getting more accurate numbers,
it makes it all worth it.
Matt Edmundson: That's really interesting, isn't it?
Because I'm just thinking of my own eCommerce businesses, and
we've got a lady who manages the operations director of operations.
She's called Michelle.
She's a beautiful lady.
If I even thought about suggesting to her that she changed our accounting
software from say, sage to zero, she would slap me upside the head because there's
just no way she's got it into her head in the sense that this is what we use.
I know the system, it gives me the right data that I need.
But actually for you, Jared, then move in systems, how big of a decision was that?
Jared Mitchell: Oh, it was massive.
I want to say, cause we had moved platforms from Magento to Shopify the year
before, and that was a long time coming.
I really wanted to wait until Shopify could prove to me that they could handle
a vendor that had over 10, 000 SKUs.
And so I waited a long time and then.
It just became a no brainer because there were so many vendors that had
successfully, I don't like being a test dummy, so successfully put their
store on Shopify and had no issues.
And so I moved to Shopify and it's been night and day better for us than Magento.
And I would venture to say it would be better for anyone
than Magento, quite honestly.
So after we did that yeah.
That's my opinion.
And after we did that, that opened the door for us to work with almost
any IMS, Inventory Management System, or ERP that we wanted to.
So like I did with the accounting thing that I mentioned about Nate I did
the same thing with IMS ERP systems.
And just to give everybody a history of the ones that we have tried,
we started out with a company called Didacom, mail order manager.
I want to say that was about 15, 17 years ago, used them with some success.
We used a company called Stitch Labs for a while, and we used them with some success.
And then we heard everybody raving about NetSuite, so we moved over to NetSuite,
and we used them with some success.
But we felt like we were paying way too much for our accountants, we were paying
way too much for the system, and we weren't able to make it work for us, and
their support wouldn't really help us.
We just felt like we were too small of a company for them.
And I think we were.
So after researching like 15 of these systems which took probably a month
or two of, you know how you do it.
You get on the phone, you make the calls, you talk the talk, you're
talking to sales, you ask the questions.
I get a big list of questions then I keep adding to the questions.
I go back and forth and now I'm like, I learned the lingo and like I've
learned about the space and we settled on a company called Finale inventory.
And I cannot sing their praises highly enough.
Like I'm not on their payroll.
Like
Matt Edmundson: should set an affiliate link up, maybe.
Jared Mitchell: their support's amazing.
I gotta tell you, we're paying around five to 10 grand a month for a NetSuite.
We're paying about 500 a month for Finale and it's a way better
system for us, in my opinion.
Matt Edmundson: Oh, wow, that's a hell of a saving, isn't it?
Jeez, that's a lot of money saved every
Jared Mitchell: it paid my, it paid for my entire rent.
We just expanded our facility and it literally, I was like instead
of paying that, let's expand.
Matt Edmundson: Nathan, do you get when people like Jared come along
and say, I'm changing systems, dude.
Do you get nervous?
Or are you like, no, let's do it.
Let's go for this because I think you probably should.
Nathan Hirsch: Not so much nervous, and I definitely don't put my opinion in
whether you should or shouldn't do it.
That's more of a business decision.
For my side, in the best possible scenario, you do a clean cutoff, right?
Even if you're switching from QuickBooks to Xero, you do it January 1st, and it
just makes everything easier for everyone.
In a more realistic situation, that rarely happens.
There's always nothing ever works in the exact timing that you want it to.
And especially when you get to bigger and bigger businesses,
you don't want a situation where past books are done incorrectly.
If you're in year two of your business and year one is okay, somewhat
accurate numbers, but you're pretty small, you could probably get away
with your CPA, filing your taxes and just being right going forward.
And five years later, no one's going to care about that initial first year.
And Jared's situation doesn't necessarily make a lot of sense.
From there, it's setting realistic expectations and hopefully Jared
feels this way of how long it'll actually take for us to go backwards
and fix it and how much that'll cost it and how much time it'll take.
But yeah, Jared knew what he was doing and knew what he wanted to do it.
There was no talking him out of it or anything like that.
We wouldn't do that anyway.
But yeah, it's more of what makes the most sense of in terms of time
and how far back do you want to go?
What you wanna avoid is.
Every time we switch something, we've got to go back five
years and change everything.
That becomes unrealistic pretty quickly.
Matt Edmundson: Yeah, top tips there.
Nathan, I guess this leads me on to actually a question which
you text me, Jared, when I said, gee, I'm talking to Nathan.
Give me some questions to ask him before we agreed that you're
going to come on the show.
And I thought this was a great question.
So talking about changing software or moving to suppliers or vendors.
What are, Nathan, some of the most important questions
a company needs to ask?
What needs to be on the question list, Jared's sort of checklist of
questions when he's on the phone, to make sure that a company like,
say, eComBalance, when you're talking like financing, bookkeeping.
Accounting.
What are some of the questions that maybe I would need to ask
to make sure we're a good fit?
Yeah,
Nathan Hirsch: software, if we're, we only use QuickBooks and Xero, if you're
using a bookkeeper that has a lot of experience with QuickBooks or vice
versa Xero and you're on the other one that could be a pretty big red flag and
Jared said in a common theme through all of this is you don't necessarily want
to be someone's guinea pig if they've been using QuickBooks for 30 years, you
don't want to have them be your First first zero client or, and from there
just Ecommerce in general, you'll see a lot of local bookkeepers that have
no idea what Ecommerce is or how to do the bookkeeping for it, and they'll
probably say that they could do it.
And do you really wanna be someone's first e-commerce client?
Asking questions around that and what connecting tool you use would you like A2X
and link my books in terms of connecting from the marketplaces to QuickBooks or 2.
0?
A pretty good way to tell whether someone knows eCommerce is if they're
using a connecting tool, if they're A partner of that connecting tool
like we're gold partners with both.
So a lot of people that don't understand eCommerce, they're either going to try
to connect Amazon directly to QuickBooks, which won't work very well, or they're
just going to take the money deposited into your bank account and put that
as a top line of income statement, which your CPA is not going to like.
That's incorrect.
Some quick ways to just see if they understand eCommerce bookkeeping.
And the next thing, and hopefully Jared thinks we do a good job here is just
integration, getting view only access to everything, documents we need up
front so that each month we're only requesting things that we actually need.
You might run into banks that don't allow view only access and stuff like
that, where we need statements every single month, but our goal is to get.
Tho that access every single month.
So we can log into Amazon, we can log into your bank, we can log
into your credit card and pull as much information as possible.
And a lot of bookkeeping firms that they might be good at the
bookkeeping, but they're bad at the stuff around the bookkeeping, that
leads to a not so good experience.
systems, processes, integration, customer service, stuff like that.
Matt Edmundson: fantastic.
So if I was starting out if I was starting a business today, I'd be
curious, should I use Xero or QuickBooks?
What's your preference?
Are you
Nathan Hirsch: pros and cons to each one.
That's why we allow clients to use both.
The real answer is whichever one your bookkeeper has more experience with.
Our controller who has 30 years of bookkeeping experience has 30
years of QuickBooks experience.
So for us, if a client comes to us and they don't have any books, we're going
to say, hey, we think you should be on QuickBooks Online for this reason.
Now, if they hate QuickBooks Online for some reason and they're adamant
they want to be on Xero, Sure, we can still work with that and we
can still take on a zero client.
But if it's up to us, the default is going to be the software
that we're more familiar with.
And what you really want to avoid is like the final loops and the benches
of the world who have a software that no one else uses because not only
are you stuck there and it's going to be an absolute pain to, to move
off of, but no CPAs, your tax person doesn't necessarily use that software.
At least stick with something that's going to be easy for you to switch.
Hopefully Jared has a good experience with us, but if he doesn't, there's a
lot of eCommerce bookkeeping, bookkeepers out there that use QuickBooks online.
Matt Edmundson: QuickBooks or Xero, Jared?
Jared Mitchell: QuickBooks Online.
Matt Edmundson: And have you been on that for a while?
Do you like it?
Jared Mitchell: I like it.
It's clunky.
It reminds you of checking out on Amazon when you need to buy something.
There's just stuff everywhere.
They have, so you gotta know what you're doing.
They have decent support.
I echo exactly what Nate said.
If you're wondering what to use, hopefully you have a CPA.
That's helping you with taxes and then hopefully you have a solid booking,
bookkeeping team like eComm Balance.
Ask them and make sure that they're extremely comfortable with both.
And that'll answer your question.
Matt Edmundson: So just for the sake of those who are maybe listening this side
of the Atlantic rather than your side of the Atlantic, you've used this acronym CPA
twice to mean two very different things.
Jared Mitchell: Oh, really?
What did I do?
What did I say before?
Nathan Hirsch: Cost per acquisition and certified public account.
Matt Edmundson: you're using it, I'm just aware that in England we don't
call bookkeepers CPAs, and so I'm just getting you, just to clarify when you say
CPA in two different contexts, you are talking about two very different things.
Jared Mitchell: Is that the right acronym name, Nate, for what I call my tax guy?
Isn't it CPA?
Am I?
Nathan Hirsch: It is if I could jump in.
So this is a quick way to think about it.
Yeah.
CPI.
You've got accounting.
Accounting is like the big bubble that everything falls under and
accounting can be really three parts.
You got your bookkeeper who's doing your monthly books every single month.
He gives payment balance sheet cashflow.
categorizing.
You got your tax person in the US, it's called the CPA outside the US.
It's called something different.
They're there to give you tax advice, tax strategy, actually file your taxes,
communicate with your bookkeeper.
And then when you get a little bigger, you can go more that CFO
or consultant, whatever you want to call it, a part time fractional.
They're there to help you make business decisions.
Say, Hey, this is what the numbers are telling you.
You should spend more on PPC.
You should hire more people.
You can forecast cashflow, whatever it is.
So those are the three elements and you at least need a tax person and a bookkeeper.
And then the CFO is optional as you get bigger.
Matt Edmundson: very good.
So I'm just going to translate this, ladies and gentlemen,
for the English amongst us.
We would have a bookkeeper.
An accountant and maybe a CFO at some point when you get that's a good point.
Actually, would you, if you're starting out in a business, would you have someone
who is competent, involved, who is not.
You're not necessarily employing him as a CFO, but certainly bringing in
someone quite early into the business with that kind of acumen and thinking.
Nathan Hirsch: Yeah.
It just depends how complex your business is.
Like I ran free up, which is a, we got it pretty big to 12 million, but it
was a pretty simple business, right?
It's cashflow positive charge your clients, take our fee,
pay the freelancers on delay.
We didn't have an office, we didn't have lots of overhead, so wasn't the
most complex business in the world, and I consider ourselves decently good at
finance, so we never did hire a CFO.
If you're running a pretty large eCommerce business and other situations,
it might make sense, and I know Jared has people on his team that and maybe
I'm wrong, but I believe you have people on your team that specialize in that
just because you said it yourself, your background is more in the marketing.
So it depends on what your background is too.
Matt Edmundson: Very good.
Very good.
Jared, you said what other pieces of software does he recommend
clients alongside of his make sure to ask him about Fathom?
Nathan Hirsch: Yeah, Fathom, there's a few tools that we use.
Rewind, which I'm actually testing some other stuff, but that's good
for just backing up your books in case anything goes wrong or you hire
a bookkeeper and they mess it up.
Always good to just have a backup copy.
Fathom, we really like for reports.
It turns, again, QuickBooks can be very clunky and the reports are no different.
They're a little hard to read in my opinion.
Oh wow.
That's amazing.
I just love it.
I think that this was a great idea.
Yeah, I think it's wonderful.
I think it's a great idea, too.
I think it's a really great idea that you guys are bringing forward.
And I love that.
And I think it is great that you guys are bringing it forward.
It is great that you are taking up our space to be a part of this because I
think it would be great to have you back on the show, that to keep us going.
And for those of you that don't know what the crowd church is, crowd church where
it's all about meeting people and a lot of people that have been listening to
us on Those are a few tools along with the A2X and LinkMyBooks that complement
the QuickBooks Online and the Xero.
Matt Edmundson: Very good.
Anything from you in terms of software that you use, Jared, that
can throw into the mix here that people might be interested in?
Jared Mitchell: Yeah, I think two things.
I wanted to echo what Nate said but I wanted people that are listening
to know, because you might not have accurate inventory, and you might have
skews going on, that's you don't know, what your inventory, where it's at.
And so there's a tool that Nate mentioned called A2X that connects to your platform
that'll actually help you get a decent COGS number for the month until you
catch up and get accurate inventory.
I wasn't aware that it was as slick as it is.
The reason we know it's as slick as it is because what Nate and I actually did
now that my inventory is live, is we went back and fixed some of the months.
We've just fixed some of the months that we had a sort of not had live
inventory for, and the adjustments we made are not that far off.
So that was pretty cool, pretty encouraging for me to see.
The second one that like, I can't speak enough positive
things about would be Fathom.
And the reason I love it is because, we've been talking a little bit about CFO.
In the past, I've had to hire like part time CFO type minds to
help us answer certain questions about our financials or inventory.
This tool, Fathom, their support's insanely good.
And basically they replaced that whole need for me.
Like I can ask.
Hey, I want to figure out, this about my inventory.
And they will sit there and walk me through it and set up a custom
report for me or show me where that information already exists.
And answer my question.
Matt Edmundson: So it seems actually listening to you talk
Jared support is a big deal.
So whichever software platform you are using, because obviously there's
gonna be different bits of software around the world for different things.
But it seems like one of the key things for both service choosing a bookkeeper
and choosing a platform is actually.
The customer service, can you get on the phone?
Or if you're a millennial or Gen Z, can you email them
or have instant chat, right?
And can you talk to a person that's actually going to be helpful?
It seems like remarkably simple, but it seems like this is a common thread,
which is weaving its way through.
Jared Mitchell: That's one thing that I'd say kindly about Nate,
in addition to many other things.
But I'd start with the fact that this is the funniest thing.
There's at some point in our relationship.
Where he emailed or called, and he's dude, you email me a hundred times more
than any of my other clients combined.
I was like, oh no, I had no idea.
I had zero clue.
And it was like Nate said, we had a lot, we were like early stages
and had a lot to figure out.
But what I really appreciated about them is they fielded the emails
and they answered my questions.
And I have a lot less these days cause things are figured out and cleaner.
Every step of the way with your CPA, with your bookkeeping team, with your
inventory management system, if you can't get an answer to something,
you're dead in the water, especially if there's like a big issue, right?
To me, it's everything.
Nathan Hirsch: I have a few thoughts on that.
To backtrack for a second, just like Jared said, he tests out every single
software and asks them a lot of questions.
We went through that in the call me, call my home.
Say, Hey, are you in technically high school?
I live in Morgan, St.
That's the funniest place ever.
Yeah.
So we didn't, when we first talked about how sort of school.
My new business, True SEO, all about customer service.
We want everyone to respond within a business day.
One of my biggest pet peeves is when people ask questions and
they don't get answers, direct answers to those questions.
So bookkeepers, they're unique human beings, right?
Like they, they hide behind the numbers.
They're categorizing stuff all day and we've had to do extensive just
email training on and with someone.
Hey, a client sends you five questions in one paragraph.
Don't respond to three of them.
Break it down and make sure every single one is answered.
Make sure that email chains don't go back and forth more than three times.
If you're doing that, then you're doing something wrong.
What is the situation where you say, okay, this isn't working via email.
Let's hop on a call and hash it out.
And you want to do that before you get to email 15 on the email chain.
So we've gotten through a lot of email train, a lot of email training with
bookkeepers who are great when it comes to what they normally do, the
bookkeeping side, but trying to add that customer service element that.
We want to be the best of the best compared to other
bookkeeping firms out there.
Matt Edmundson: That's generally good business advice when it comes
to email, I feel, and offering customer service to your own
customers via your eCommerce business.
What's the I guess one of the questions, Nathan that maybe you can touch on is
when I think of bookkeeping, I think of what the guys at 40X call lag measures.
So you're looking at data which is historically out of date as soon
as you look at it in a lot of ways.
Whereas if I look at a live dashboard, for example that's given
me like to the minute information.
Do I need both?
How do they work together?
Because in my head, both are important, but I can see why a lot of people
might go, I've got a dashboard here.
That's fine.
Nathan Hirsch: Yeah, both.
All of my companies, we're looking at stuff on a weekly basis.
We're tracking stuff on a weekly basis, but we don't consider any numbers
final until we get the final report.
And there's always stuff missing.
There's stuff like seller board, which I know the founder, it's a good tool, but
Things change, it doesn't replace monthly bookkeeping, so for me it's monthly
bookkeeping you absolutely have to have and then the dashboard or the weekly
reports you might get or whatever it is, that's the add on, it's not the other
way around where you've got the weekly stuff so you don't need the monthly.
Matt Edmundson: Do you agree, Jared?
Jared Mitchell: Definitely and with regards to timing, a hot question is
how soon can you get me my books, right?
And I think I had false expectations, and I think the expectations I'd lay out
for anyone within the sound of my voice right now is that If you're not up and
running with these systems that we're talking about, you're probably going to
have to rely on getting your financials for the prior month, either from the
15th or the 30th of the next month.
It's going to be delayed, most likely.
So I would get to that point first.
And make sure everything's clean, and a well oiled machine, before you start
talking about, okay, how do we close in on that end of month number, and
so I can get those ratios as soon as I can, and actually act upon them.
Matt Edmundson: Any thoughts on that, Nathan?
Nathan Hirsch: yeah, one thing we didn't really talk about was just
the setup, like before you hire a bookkeeper, obviously you need QuickBooks
or Xero but also just what banks you use, what credit cards you use.
Jared's not one of these clients, but we've got clients
who are using QuickBooks.
Matt Edmundson: Fantastic.
Fantastic.
Gentlemen, listen, I'm aware of time and I'm aware that we could just carry
on the conversation and just keep going and I've actually quite enjoyed it.
What we've managed to do somehow is take a what is perceived as not a very
interesting topic like bookkeeping and have quite a fun conversation about it.
So I, I tip my hat to you gentlemen.
It's been fun.
Jared, anything in closing from you, bud, on this whole thing?
Jared Mitchell: Man, no, just thanks for your time, I guess if anyone I'm one
of those people that like, now that I know what I know, I want to help others.
So I don't really do consulting anymore, but someone's welcome to email me and
ask me a question and like which one do I use or lay out their scenario.
I'm happy to help.
I feel like that's just what we should do as entrepreneurs.
Every single time I'm going to recommend Nate for bookkeeping
and he doesn't pay me to say that.
He actually didn't even know I was going to be on this show and I'll
make some other recommendations.
Bye.
Happy to help.
Matt Edmundson: Fantastic.
Nathan, anything else from you?
It's just, that's perfect timing for him just to go.
Nathan Hirsch: Like you said, I didn't know Jared was going to come.
It's always good to chat with him.
And I appreciate the kind words and the trust and everything that goes with that.
And yeah, thanks for having me on.
It's fun.
I was telling Matt before this, anything to make a podcast different
from the other 800 podcasts I've been on is always a welcome change.
Matt Edmundson: hopefully we've done that, Nathan.
Nathan Hirsch: Definitely.
Matt Edmundson: Gentlemen, both of you are exceptionally beautiful people.
Thank you for coming on the show.
Really enjoyed the conversation.
Chad, we should do this again sometime, but where we just go and chat to people.
Jared Mitchell: Hey man, if you need a co host, I'm right there, dude.
Matt Edmundson: Excellent, excellent.
We should definitely do that again.
Let me, while I remember, just give another quick shout out to Ben Leonard.
We mentioned it earlier, but the Quit Stalling and Build Your Brand book,
definitely go check that out, Ben's a great guy, I think he's coming on the show
again soon but yeah, I think that's it we will of course link to both Jared and
Nathan in the show notes which you can get on the website at eCommercePodcast.
net, if you're subscribed to the newsletter, they will be coming to
your inbox automatically of course, they will all be in there but yeah,
gentlemen you're both awesome.
Thank you for coming on.
Really appreciate it.
Great conversation.
Wow.
Jared Mitchell: for having me.
Matt Edmundson: Nice.
It's beautiful.
Just stay there for a few minutes.
Don't go anywhere while I close out the show.
Thank you so much for joining us.
It's been great, hasn't it?
Now make sure you check out the eCommerce Cohort.
Be great to see you in the Monthly Mastermind.
If you're not in there already, come check it out at eCommerce Cohorts.
Big shout out to the team that makes this show possible, which
includes the beautiful and talented Sadaf Beynon and Tanya Hutsuliak.
Big shout out to Josh Edmundson for the theme music.
And if no one's told you yet today, let me be the first.
You are awesome.
Yes, you are.
Created awesome.
It's just a burden you've got to bear.
Jared's got to bear it.
Nathan's got to bear it.
His five month old kid's got to bear it.
I've got to bear it.
We've all got to bear it.
That's it, eCommerce Podcast is produced by PodJunction,
the new name for Aurion Media.
Find out more about PodJunction, find out more about everything at eCommercePodcast.
net.
But gentlemen, that's it from me, that's it from all of us.
Thank you so much for joining us, it's been fun.
Bye for now.