Shownotes
Yes, it is time for our annual discussion about getting your financial house in order. We are all guilty of letting stuff go while we surge through Q4. When will you take the plunge to get things in real order? When can you start to see monthly financials? When can you see how you did versus plan? When can you get an almost instant valuation for your business? Are you making quarterly deposits? Even more basic are you profitable? Well now is the time with great tips from a real experienced CPA who also sells on Amazon.
Mentioned:
AMZ Accounting Simplified – Quickbooks course that will help you get your house in order
Accounting we will go – Anna and Allison’s free Facebook Group
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Transcript: (note- this is a new tool I am trying out so it is not perfect- it does seem to be getting better)
Anna: [00:00] Telling records are denominated, are valued at lower of cost or market, so you want to think about it that way if something cost you, and I’m going to use round numbers $100, you listed it for 300, but now the market is only 90. You could consider maybe writing it off at market, but the problem is, is if there’s a lot of judgment involved and you know, these adjusting inventory values can get kind of, um, you can expose yourself to question that. You’d have to substantiate. So my professional opinion is leaving the value at cost is probably the wisest thing. So that would be 100. Unless you have a really good reason and support documentation for a lower value that you’re writing off, but you’re correct in that case, you certainly can’t write off $300 the fantasy price or whatever it was when you, when you purchased it.
Cool voice guy: [00:48] Welcome to the ecommerce momentum where we focus on the people, the products and the process of income are selling today. Here’s your host, Steven Peterson.
Stephen: [01:01] He just wanted to mention two sponsors today. Solutions Four, ecommerce and sellerlabs scope. For step solutions, four ecommerce, so it solutions the number four e-commerce dot com as Karen lockers group where she manages Amazon accounts for brands and smaller sellers like ourselves. We’ve been with her, I think it’s coming on two years now and been thrilled because, uh, she helps us with creating listings, reconciling shipments. That’s one that we’re working on right now. I’m making sure handling refunds and things like that and making sure that we’re, we get the money that’s due. Was that more than pays for my service and you can save $50 by using the code momentum. So solutions four ecommerce.com, forward slash momentum. Use a code momentum. You’re going to save $50 a month and she’s going to do that inventory health reports a new year. You really need to get your account in order.
Stephen: [01:53] Second up is a seller labs scope. You know, I talk a lot about it because I’m a user period. That’s, that’s what makes it so worthwhile for me is that we use it for all of our private label, but even for our wholesale business and we do more bundling and stuff like that. Then then, then private label, and so it allows us though to really take advantage of those key words and really get them figured out because you have to zone in on the key words and so again, you can use it for your private label business, for your wholesale business. Even if you want to improve a retail art business, sometimes you can get in there and add some keywords and if you can put the right key words and put the ones in there for the number one. Number two, number three sellers.
Stephen: [02:37] That’s the best part, right? So I’m go to solar lamps.com, forward slash scope and used to code momentum and save $50. Okay. Save the money and try some key words and see if you see an improvement in sales. And once you see an improvement in sales, you’re saying, hmm, let me try this on other, other, uh, ace and said, I’m selling. And all of a sudden you start to build a pattern. You see the improvement. Then you understand the value of doing it. And more importantly, you’re teaching yourself. You’re learning what to look for. And I think that’s one of the best parts about scope. It just helps make you a smarter seller. Let’s get into the pot and welcome back to the ECOMMERCE momentum podcast. This is episode 369. And a hell yes. It’s our annual discussion, our nerd speak, where we talk accounting.
Stephen: [03:20] What, what excites me about these episodes with Anna is a, she’s so smart, she’s so knowledgeable, but she’s also a seller. And so that’s what you want somebody who actually understands the business. And so her advice just really helps. Um, um, and she even says that she sells fabric. Um, so I think that’s a good example of something that’s complicated. Cost of goods, right? You know, think about how much you know, bolts costs, right? I actually know that term, right? Think about all the different pricing models and how many different versions and stuff. Well, that’s a lot of moving pieces and so she’s worked her way through that herself, and then therefore can offer advice on how to do it for yourself. In this episode, we always do a closeout 2000 the year before. In this case it was 2018, and then I think we touched on some pretty important subjects.
Stephen: [04:08] Um, and one that’s really special to me is planning. Um, so you could start off 2019, really strong. I think that that is what you can do. You could get redemption right now by putting a plan in for 2019, even if it’s only four or five lines. Revenue, cost of goods, a salaries and benefits, um, and other costs, even if he get that far and then profit, you have made a huge improvement in your business. And this is just so easy to do. And I think, um, I think the course that she’s offering for quickbooks is probably the biggest opportunity if you’ve been looking for a way to get control of your business. I’m a nine steps nine modules. There’s a million different videos. How to. It’s how to, like she said, she even tells you how to turn on the computer, right? That is where you want to go.
Stephen: [04:58] If you’re going that direction, um, you want to get control. This is the year to do it. And I hope you do it. Um, I just want to see some success for everyone this year. What’s going into the podcast and welcome back to the ECOMMERCE momentum podcast. Very excited about today’s guest. She’s a repeat guest and it, it’s kind of become our thing. We do an annual kind of close out the year and what a challenging year it was and started the new year. And let me just say this, it’ll be a challenging new year and we’re going to talk about how to do it right. How do you get your books in order? How to start the new year, maybe a little budget. Talk, a little sexy budget. Talk with Anna Hill. Welcome back, Anna. Thank you. I’m excited to be here. And yes, this has become sort of our annual event.
Stephen: [05:43] Not always look forward to it. It’s funny that we talk about it, but we, it is sexy to talk about a budget or it is a cool to have good looking books. I mean it and it sounds such a nerd speak, but it’s true because your business, I mean you know how your business is doing right up through November, right? Yes. Okay. I’m not quite as good. I’m close. I’m close, but I will file on time this year. I did not file on time last year. I mean we’ve got an extension but I will file on time this year. That is my goal because
Anna: [06:16] feel so good that that’s behind you.
Stephen: [06:19] Yeah, because it does take that, you know, because it weighs on me. That stuff just sits, it sits in my head. I don’t know how you are, but that stuff sits on me and so to be able to have that out and then you’re really executing the plan. Now I do have a 2018 budget in place and like you, we use quickbooks which we’re going to talk about, but that’s very exciting to having that budget kind of gets me ready. But getting rid of the past really allows that.
Anna: [06:46] I agree. It’s, it’s like you compete with yourself when you have a budget. At least that’s how I feel. It kind of turns on that competition within me and it makes it fun.
Stephen: [06:55] All right, well let’s start with talking about closing out 2018. I said it was a challenging year. Was that fair? I mean, we have a lot of clients. I mean, would you say that’s across the board?
Anna: [07:06] I think that is fair. Yes. I think so.
Stephen: [07:08] Yeah. I think there, there’ve been so many changes outside of our control. Um, and the, here’s a hint for 2019 they’re going to continue, they’re not going to get and they’re going to happen to probably more frequent and I think that’s, that’s the hard part. And if you don’t have a solid plan, I don’t think you can adapt as quickly. You agree?
Anna: [07:27] I agree. And you know, people say this isn’t fair, they’re charging more for this or they did, they were doing that and I agree it’s not fair, but it’s also unfortunately the nature of working for ourselves. Unfair things happen.
Stephen: [07:40] Well, you know, if, I guess if you’d sit back and you look at ecommerce, it’s fair because we’re all equally getting treated that way generally. Generally, not everybody, but you know, like I think of the postal increase that’s coming up in in a few weeks in January, pretty significant and one of the, I think one of the fundamental changes they are making is they’re taking a, you are a, a first class package and they’re going to zone it. It’s just as cheap today to send a, you know, fish 15 helps package from my little town in Carlisle, Pennsylvania to Harrisburg, Pennsylvania as it is for me to send it to Hawaii. Now, how does that make sense financially, right? It doesn’t. I agree. So they have to put a structure in place to fix that. Right. And they’re saying, hey wait, now ideally I’d like to see the rate from here to Harrisburg go way down.
Stephen: [08:27] Right. You know, I’m not certain that’s going to happen. No, it won’t. But it does make sense that it goes up for Hawaii and the challenge is those of us who built her business, I’m just picking on Ebay right now. Um, but those of us who built our business on free shipping or a, or not putting in zone, not setting them up correctly. If you’re old and you have old ebay listings, which I do a couple of thousand, um, you know, we were doing what was right at the time. Well, it’s evolved and I think that that’s one of the more challenging parts is how do you go back and fix that piece of your business? And I’m only talking shipping, but it’s not just shipping. It’s the html language that got changed. Or Amazon are used to allow html. Now they don’t or used a third party and then they’d have an updated their interface. And every one of these are real examples of. This is what I would say, and correct me if I’m wrong, I don’t think if you don’t have the cost of the ability to financially make those changes in your business, then your business is nowhere near as profitable as you think it is.
Anna: [09:32] I agree. I totally agree. It’s almost like you have to have a mental financial slush fund for surprises that will pop up and if you don’t have that then maybe it’s not as strong or maybe you need to change and have some business savings. And I know people don’t usually think of savings in a business, but it’s important because of these unfunded surprises.
Stephen: [09:51] Yeah. It’s um, you know, you think about like you’ve worked in corporate America, you think about those companies and we downplay the value of those small administrative positions. Right. You know, it was my full time job was removing them. Any place I could, I can go into a company and squeeze. I was an expert at it. That’s why they moved me up so many times because I can go into a company and say, you done, done, done, done, done. Okay. Seventy percent of the staff is gone. We can do it through technology. It’s awful to think about, but it’s true. That’s what that was my skill set here. We sit there and say hey, we can do it ourselves. Hannah, you’re a one person operation. Right? But Yep. And you’re only focusing on the fun parts of the stuff that you like, that other stuff gets missed and over time it builds up. So I just think that this is one of those things that if you set yourself up, and I like what you described, a little bit of a slush fund, a little bit of a what if in your budget. And that’s painful though...