hey it's patti scharf CPA and co-founder of catching clouds the leader in
e-commerce accounting welcome back to my Saturday slow down Saturdays I like to
remind everybody to take a deep breath work on their business instead of in
their business
today I want to talk about just the idea of having accounting financials in
general it's really amazing to me how many people I meet how many like really
successful multi-million dollar ecommerce sellers who keep their nothing
more than just spreadsheets on their business they really don't have any kind
of accounting in general so I'm gonna tell you a secret as a CPA I'm always a
little bit impressed by people who can build multi-million dollar businesses on
nothing more than spreadsheets because accounting gives you such good insight
into different elements of your business how you're running it and how things are
performing that if you're just doing it on spreadsheets I'm kind of like
intrigued on how you can actually even do that successfully and I I think one
gosh how much like bigger better more successful with your business be if you
actually were doing accounting and then the other I think about is the
businesses who are like I don't need accounting then they just do
spreadsheets and they're not successful at it and they they struggle or they go
under because of it and I've talked to so many different accountants and CPAs
who are just like I I I can't believe all these ecommerce sellers who just do
not care about their finances and I don't think that's actually the case I I
think that's extremely rare actually I think virtually everybody cares about
their finances they just have varying levels of of what they actually care
about so I think one type is the kind that's like and I think this is the
spreadsheet people who are like you know I have shopping carts and like Shopify
gives me all the details and stuff what do I need accounting for and I think
that they don't really realize that accounting is really to pull together
all the different pieces of your business so if you're paying payroll or
you know other expenses or pulling out distributions to yourself or you're
investing in equipment like you you get that whole picture with you
our accounting system and like spreadsheets it you don't you can't
really reconcile spreadsheets so you don't know if you're missing something
or it's just not it's not a complete picture and it and you're not going to
be able to find out if you're missing something because it's not a closed-loop
system like an accounting system is so I think it's it's one of those cases where
they just don't know what they don't know they don't know what they're
missing and spreadsheets feel good enough to them the next type is the
people who think that they only need to pull their numbers together for their
taxes you know they're the shoebox people who are like here I don't want to
deal with it and they they just want to know oh how can you save me on taxes and
and what whatever else and I think this is another one of those cases where they
don't know what they don't know which is to say that they don't know that by
keeping track of their accounting on an ongoing basis actually will give them
more insight into their business another another type is the oh my god accounting
is so boring like they know it's important and they just don't want to
deal with it you know they they have every intention of taking care of their
accounting this they'll set it aside but you know when you're an entrepreneur
you're wearing 18 billion different hats and the one that is least appealing to
you and most mundane you know that one's gonna wait for a while so so that's
enough you know that's another one of those where if you're staying on top of
it or maybe you get somebody else to help you out it's gonna help propel your
business because you're gonna have better insight into what's going on and
it won't be so painful at the end of the year when you have to pull all that
stuff together here's the other problem if you are just kind of putting off
can care of that stuff there may be hidden problems like like you may have
some sales tax liability issues that you haven't addressed you don't know where
you stand and every month that you put it off you can be creating more and more
liability for yourself and you can be digging yourself into deeper and deeper
trouble and not even knowing it so that that's one that I think everybody should
really be concerned about if you're an e-commerce seller especially with the
new changes in the sales tax laws and then the last type is the I know it's
important but it's so scary like you know there's this whole group of people
who they just they don't want to know lalalalalalala like if they don't know
about it then it won't hurt them and I think that people they intuitively know
like in the pit of their stomach that it's a problem and they they may be
having trouble sleeping at night or back when I had a tax practice more than once
I had somebody coming in and I would talk to them about the tax liability
that they owed and they weren't proactive about it and so they got a big
ticket at the end of the year and they were in tears in my office because they
they didn't deal with it proactively and here's the thing I really really
strongly feel like knowledge is power maybe it's because I grew up with the
little schoolhouse rocks videos but but knowledge is power and you can do
something about a problem if you know about the problems so not knowing about
it is not a solution and actually if you're in this camp I want to point you
in the right direction go start by reading simple numbers straight talk big
profits by Greg Crabtree I think and go read profit first by Mike Mike lowitz I
hope that's how you pronounce his last name those are two really good books
that are not scary that they will push you in the right direction and you can
get started on this path that will be so much more beneficial to
you than just sticking your head in the sand the last comment is if you are just
starting out with your e-commerce business check out my link below I have
an e-book that you can get for a startup guide ecommerce seller startup guide so
hopefully that will help you and I think that's it for today
so I hope you liked this video you did please like comment and share if you
haven't already please subscribe and I'll catch you later