Today, Kelsey, our Lead Account Manager, joins me for a special 50th episode. Kelsey and I take you behind the scenes of Kickstart Accounting and talk about some of our monthly finances and systems that help the business run efficiently.
We also go over some of the mistakes that were made back when the business was just starting and how I was able to fix them.
In this episode, Kelsey and Danielle also discuss:
- The systems that we use today to help run the business 2:24
- Xero and why you should or should not use it 11:10
- The importance of having a separate business credit card 12:05
- EOS and using it with your team 15:35
- Checking your operations expenses and profit 22:00
Connect with Danielle:
Website | https://www.kickstartaccountinginc.net/
Facebook | https://www.facebook.com/kickstartaccountinginc/
Instagram | https://www.instagram.com/kickstartaccounting
Twitter | https://twitter.com/KickstartAcct
Things Mentioned in Today’s Episode:
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Full Episode Transcript:
Danielle
Welcome back to another episode of entrepreneur money stories, Kelsey and I have a really special episode today. We are going to take you behind the scenes of all of the kickstarts, finances, and analysis that we perform on a monthly basis. So I'm gonna let you guys in on a little secret. So we started this business almost eight years ago, and I've been doing the bookkeeping and CFO work for this business the entire time until three months ago. And this has been a really interesting experience for me to go through. And I don't know, you know, as vulnerable as every single one of our clients are. And Kelsey is our lead account manager. And you guys have heard her on the podcast and several other episodes. And Kelsey has taken over our measures bookkeeping, but analysis with myself and the leadership team. And so we want to pull back this, the screens a little bit and, and show you what that process has been like, as a business owner. But then what do we do with information? Because I think we take a lot of action on this information, we make a lot of changes from it. So what was the process like for you, like taking this over?
Kelsey
I thought it was great that, you know, we always practice, we always preach, you know, to take out in someone else's hands, you can't wear all the hats as a business owner. So it was amazing to see you finally take that step and let somebody else take that over for you.
Danielle
Yeah. So a little bit of systems talk. So no, and I'm gonna tell you this, because I think this is what people should do, because I would do it a lot over again. But now we have seven years of historical data. So in terms of systems, and I want to share this with you with all of you, we use fresh books for billing. And I actually really like FreshBooks Books . You chose that because they offer automatic billing on a monthly basis. So when we work with our clients, all of the billing is done. The database on the contracts, they get billed for their first month, right? So every month on that day moving forward, they're built their monthly invoice. So everything is done on a flat rate basis, at that billing time when we're not attorneys, or traditional accountants really, we we believe in the value of our service. And so all of our invoicing is done on a flat monthly basis. So we chose FreshBooks. Because of the ease of use for ourselves and our clients,
Kelsey
I think FreshBooks was pretty much the only system that kickstart started out with that we actually have have kept
Danielle
Yeah, well and zero to the accounting software. But but
Kelsey
That was not ideal. FreshBooks is It is
Danielle
ideal. And it's grown with us. So other than the fees. But I think we can say that, like we tell our clients all the time, 3% of sales is just the cost of doing business today. But I think overall, it's grown with us. And it's really become our master tracking system. All of our sites, addresses, emails, their history, everything is in that system. So even from an operation standpoint, you guys have heard Vittoria on the show in the past. So even from an operation standpoint, when we talk about where we are going to manage like client addresses, when somebody emails us back and says, Hey, I moved or don't email anymore, email this, that is our Master System. So it's our invoicing system, but then also our client tracking system. And then one of the big analyses that we do on a monthly basis is a time analysis. And I want to share this with you because we preach this a lot to our clients that you have to understand how profitable you are for every single one of your clients and every single one of your services. And so we also have our team track all their time and Fresh Books by client or internal. I don't know, how do you think that that experience has been for them? I love it.
Kelsey
I think it's super easy, super intuitive, and the information is absolutely necessary. I think any service based business or any business that has clients should be tracking time spent per client. It's interesting,
Danielle
because we hear a lot of our clients choosing systems because it syncs with their accounting software. And we really flip this on its head because we don't don't think about anything. We actually suggested that our clients don't think about anything. But it didn't matter to us if it syncs with our software, what mattered was being able to do this time analysis. So when you start to think about your systems, or maybe think about changing a system in your business, how would you change the way you think about choosing systems, think about choosing a system that you can grow with in your analysis, right and how you're going to make business decisions in the future. We have pivoted this business because of that analysis, right? We've dropped clients because they're not profitable. And I don't mean that in a mean way, but we've decided that that client needed maybe somebody in house or they needed it. They needed a firm that could serve them and what their needs were today. And that was no longer us. And we were able to make that really difficult decision because we're, we're looking at this information on a regular basis, we also offer several different offerings. So we have our CFO weekly package, our monthly package, and our quarterly. And I talked about this all the time on the show, you would think that we would push everybody to the weekly backups, right? Because it's our highest dollar amount. But it actually takes us both time and energy. I would not say
Kelsey
That's the most powerful tool that we have. And we know that. So it's important to have that information so that you know that
Danielle
Yeah. And we've been able to. So Kelsey, and I both hold our discovery calls, we are the sales to a lot of the sales and marketing as well. And we've been able to very specifically align our clients with the best package that fits their specific needs, rather than what we think it is. And
Kelsey
When we do the time analysis, this is really important. If you have employees, contractors, anything, anyone that spends time on clients to do that analysis, you can also see any red flags glaring at you. If you see that, you know, an employee is spending an insane amount of time on one client. It's like why, what are you doing? Or and not just clients, but tasks? You know, are they spending 50% of their time on admin on admin tasks that can't be billed? You have to have that information? Yeah, that's
Danielle
a really good point. I was thinking about it from that aspect of accounting and systems. But there's a whole team management side of this, that I just totally forgot about Jameis. So we've also made some changes internally, that we aren't changing things. We're shaking things up internally. And we've, we're staffing our firm differently, because of what we're seeing our how we're seeing our team spend time. Again, I always feel like a broken record that I say no, I know your numbers. So well. But I want to give you specifically what numbers to look at, because it helps you make these business decisions. So what we found was that a lot of our new staff members, it was very difficult for them to learn who we are, what we are, how we do things. They are awesome accountants, right like we have, like shots for our entire team. Like they are amazing accountants, but they're really good at accounting. And it takes them a long time to learn what we do and how we do it. So we flipped it on its head. And we said we're not partnering new clients with new team members. And we are changing the way that we bring on clients and the way we serve clients. But it's all from the US understanding our numbers, just this week, we had a conversation with one of our team members. Because he specifically said internal tasks, there's a code called internal. And although we want our team to spend a sufficient amount of time prepping for their day and do what they need to do. We had to have a serious conversation with our team. And so we took this information and made difficult decisions and had difficult conversations, but it's making a difference like we're seeing
Kelsey
today, we're seeing a productivity increase.
Danielle
So we talked about Fresh Books and billing. I'm going to let you guys know no secret here. I'm almost embarrassed to say this, but we are in zero. We are not. It's painful. No, I agree. So when we started the firm, so zero came out of the so anybody who doesn't know zero, that is x e r o, you can look it up and don't sign up with them. I'm sorry, zero, I do love you. It is a great option for business owners who are going to do their own bookkeeping and accounting. They don't have a reconciliation feature. So there's no checks and balance. And when we first started this firm, I'm gonna tell you guys the secret to so there is this company. So I'm from Cleveland, Ohio. There's a company in Columbus called up sourced, and several gentlemen who started this firm. And they were a zero based firm doing exactly what I wanted us to do. Exactly. So I reached out to them, I called them and I sent them an email and shouted out to Upsource. They sent me like a book back in this email, like it was incredible. I actually experienced a lot of that when we first started this business and they told me how they use Xero with systems that they use, how they how they built their firm, it was incredible. And we took onto that we really follow them as a mentor. And Xero had a lot of options for accounting firms and they were a younger company and so I think that that was a lot of them. So they were ready and willing to serve accounting firms because they were a younger company and easy to use. So if you're somebody listening that you do not have bookkeeping support, and you don't have a system to use Xero is an awesome option. However,
Kelsey
As your business grows, you definitely have to have that checks and balances, we preach this all the time. And Xero just doesn't allow for that. It's too easy for things to go missed. And as accountants, we just can't, we can't allow that. So for that reason we push everyone to QuickBooks,
Danielle
I think we can share the story about the reset, zero catastrophe.
Kelsey
So we have a client, who was in Xero. And after taking, like, a really good look, the inability to reconcile allowed so many things to go missed, and fall through the cracks. It was crazy. And from that moment on, we, we, I almost don't even want to allow clients to be zero. It's insane that you can't reconcile. So if you can reconcile, you can catch anything that's missing, right, then, if you've never reconciled, you know, there's really no way to see if anything's missing. They have a, you know, you can check the balance and accounting software to your bank balance and see if that's similar. I don't think it'll ever be exact. It should be theoretically, but you know, timing, things like that can make the balances off. But if you keep saying, Oh, it's just a little bit off, it's just a little bit off in time, you know, that really adds up. And then now you don't know, you don't know where that problem is. So
Danielle
I'm gonna tell you another embarrassing story. We first started using zero credit card that, you know, when we first started the business, and I've shared this with you guys, before, we didn't go open up a business checking account or business credit card, I'm sorry, we had to miss check your business credit card, because you use sign for your business anyway. So as your personal liability either way, and the business didn't have credit yet. So now we do it the time we did not. So I just took one of my credit cards, and I called it my business card. However, there was still personal expenses that were hitting it from time to time. In Xero, we were deleting the transaction, oh my gosh. So and because they don't have a journal entry feature like it, yes, that's another thing. So the balance is still wrong. The balance is still wrong. So I'm sharing that with you. Because you can make epic mistakes with your accounting systems if you don't know how to use them. And quite frankly, it wasn't a system that we weren't comfortable with. And we weren't using it in the most appropriate way. So even as an accountant with so much experience, we still miss used it because it was a system that we didn't know how to use. And that's why we use QuickBooks with all of our clients now. And I understand as I'm saying that, like you as a business owner, you're like, Well, I don't know how to use QuickBooks. But that's why we always say to them to the experts. Yeah. Because now we're looking at migrating looking at migrating over. Oh, yes. Now that I took them over. I never could take on an undertaking. It was always too much time and energy. So see, that's exactly why I wanted to share this episode with you all because you're not alone, right? Like, the things that I'm talking about. I'm talking about them because I feel passionately about them. But not because I'm not right here with you. Right. I'm right here with you. So, alright, so Kelsey, you've sent the financials a few months in a row now to me as a business owner, but not just to me, but like, as a leadership team. So we are implementing EOS. So EOS is a whole nother rabbit hole that maybe we'll do a podcast episode on that. Maybe I'll have Kevin on. So Kevin is our EOS implementer. EOS is an Entrepreneurial Operating System, I'm gonna put it in the show notes, the series of books that have been written. Also, Kevin's information in here. It is a system where you set 10 year goals, three year targets, you really get very specific on who your client target is. So we've actually pivoted our business. Since implementing ELS, we will continue to work with product based businesses, but we are an accounting firm for service based businesses. And we have three very specific, unique processes. And we help us implement each of those. Each of those things identified
Kelsey
and implemented and cared about,
Danielle
they carry them out, right, like it used to be there, but it was in my head. So I was operating from one system, but the team wasn't operating from the same system.
Kelsey
Ahead. You know, it was never vocalized, or documented or anything like that, which is another really big thing about us. But so it's been really great given us a lot of clarity on the business
Danielle
clarity, yes. And mission vision values, like all of it and communicate with the team. So Kevin has actually come on and done an entire session with the team and walk them through EOS and what it is and how to use it. The reason I bring this up is because we have a leadership team that sits as part of the is a bi weekly meetings, it's a 90 minute meeting, which, when we first started this, I was like, we don't need 90 minutes.
Kelsey
We blow through those.
Danielle
But the leadership team we have, we set 90 Day rocks, so their 90 day, not just goals, but the specific tasks to complete, we set their 90 Day rocks, and then there's accountability. So we have to report to Kevin and to each other. If we're on track or off track, I don't know how many like i This experience has been like, mind blowing to me, because I'm like, I don't want to let my team down, I have to report them on track, right?
Kelsey
That's huge, you can't really use it, we would not have been able to do half of the things that we've done over this last, what, six months, four months, had we not had a US and had those rocks, it would have just been, you know, on my plate and just down the next list on the next list of things to do. But now I have to do it, which is awesome.
Danielle
It is. So like by the end of the quarter, I think you even said I'm off track, I will have them done by the end of this quarter
Kelsey
that I'm not alarmed yet. If I'm still on track by our next bi weekly meeting, then I'll be
Danielle
alone. And then we have a scorecard. So on the scorecard are things like revenue, our net profit number of discovery calls, number of discovery calls, upcoming number of referral partners. So we have a referral partner program. So if you are a client or a longtime listener, we have a referral partner program. So Kelsey, and I, one of our rocks is to continue to not just engage with new referral partners, but nurture existing. So that's our rock. Right? So these are items on our scorecard Instagram engagement. So Alexis is our marketing team. And so she has rocks and goals in her scorecard, like Instagram engagement, Facebook, and LinkedIn. You can think of them as I think she was gonna try Pinterest, a Pinterest. And so and so Oh, Google Analytics website. So then some Google website analytics. So we're practicing what we preach. Right? We have a scorecard that we have said, what are our rocks for this quarter? What are our goals? And then we backed into that and said, What do we need to track every other week to see if we're going to meet our rocks at the end of that quarter? And we're keeping track of it on a scorecard that's visible to the entire entire team, and what not to interrogate our entire leadership team, I went on a huge digression from my original point, which was the
Victoria
photons we know what information we need. It's what system is gonna get us that information? Yes.
Danielle
So now that you're you're sending this information to the leadership team, what what information are you including in the financials that you think has been helpful for, for the management team to make decisions in those meetings,
Kelsey
so we have a budget. So comparing our actual revenue expenses to our budget is one of the main ones because we really try to stick heart to the budget that we put in place earlier this year profit percentage, again, the profitability per client growth. So for this year so far, what does it look like compared to last year? You know, for this timeframe? Are we higher? Are we lower? We also have percentage growth goals. So are we meeting those? Are we growing at the percentage that we thought we would,
Danielle
I think a big one for us. It was interesting. Our profitability was done last month. And that was an Eos, you have to call it IDs. So issues, decisions, opportunities for improvement. So that became an issue, right? It became an issue as a leadership team to look into it. Now, it makes sense. We understand it. We brought our entire leadership team and some other team members here to Cleveland, we had an amazing quarterly planning session. And we had a lot of travel costs. We brought the entire team in, we did a social, we took pictures. It was a beautiful event. And I will continue to pour money into that, but we understand it,
Kelsey
right. It was a little alarming. But once we looked into why, it's totally fine. We also had a lot of annual subscriptions come out. Yeah, yeah. So we are making changes.
Danielle
So if your listener, check your spam, because our emails might be there. We recently migrated from G Suite to Microsoft.
Kelsey
And it has been, it's been an adventure.
Danielle
And I think Chris's name is Adventures in automation. So we have been doing a lot of training with a woman named Chris through a grant that we found here in Cleveland, Ohio. So don't forget to use your local resources. We heard about this grant. And actually, we found Kevin that way as well. So we're really utilizing the resources that we have available to us. So don't forget to utilize your state and the things that they have available. We don't know all of them nationally. I can talk about them in Cleveland. So in Ohio, we have what's called the tech crowd. A program where you can offer training programs for your employees, their grant to the state. So we met Chris doing some training for the team and excel and creating dashboards. So if you're a client, you should see some really beautiful charts. But Chris helped us with this G Suite and Microsoft integration. And the reason that we took this adventure on was systems, our money, you know, when you these annual things when you grow, right? It was one thing when we were a very small team, but we have to continue, we have to continue to grow in order to support our clients. So we have to continue to bring on new team members. And we have to give those team members the same tools, no matter what. So they have to have Calendly. And we use a boxer. And we use grasshopper for our phone system.
Kelsey
I mean, just having the email subscription. So
Danielle
yeah, and then zoom is another one that pays zoom. So knowing our numbers, we were able to see what percent of our income is going to operations, subscriptions. And were able to see, I would rather pour these dollars back into the team. I'd rather spend more money on training and rather spend more money on traveling to our clients and traveling to conferences. I would rather put that money into other places not to operate subscriptions. And so we've gone through this very difficult process of migrating our emails, file sharing Citrix ShareFile.
Kelsey
And that's a very expensive one.
Danielle
We migrated from Dropbox into Citrix ShareFile, several years ago. And we did that because of security. Dropbox is actually not as secure as you think Citrix ShareFile allowed us to be able to share files securely with our clients, and, and vendors, quite frankly. But as we grow, it's a very costly software. And Microsoft has very similar products. And we're really excited to be migrating. But again, knowing our numbers allowed us to see that this annual subscription was coming. We knew it was coming in May. And so we were able to make decisions. It's been a difficult quarter like Victoria has been laughing, she listens to it. This has been a difficult quarter for us, because we've had so many things going on in the back end. But it's because we were looking at our numbers last quarter, that we were able to make all these decisions this quarter. And it's not just about seeing the numbers, right, it's about being able to make the decision,
Victoria
have that extra plan. So we calculated the cost of all of our operations subscriptions, looked into our different options and found out that, you know, we can pay less for the same, basically the same service. So we're investing so much into caring. I think it'll pay off.
Kelsey
Yes, I absolutely think it will. So I wanted to share all that is an open and honest conversation right now. Because it's about looking at it, and then deciding what to do with information. And I think that that's I think that's a difficult place for even our clients, right? So clients, or their business owners, colleagues, you hear people say, know your numbers, and then they're like, clients, how am I supposed to do? I'm like, okay, cool. I know that. Now, what am I doing? So I wanted to share this episode with you so that we could share the things that we're looking at. Right? So Kelsey is sending me the same report that all of our clients are getting the same format, the same KPIs, the same information. And so I wanted to share with you what we're doing with that information. We are making difficult decisions about the clients, the clients that we accept and choose to continue doing business with the difficult conversations are what service offerings that we have, the difficult conversations around our team, where they're spending their time, who we hire, how we hire them, difficult conversations, operationally. You know, what systems are we using? What are we going to change moving forward so that we're always efficient? Now, I mentioned a few changes in operations. And I wanted to do that, because just because you made a change doesn't mean you can't make another change. Like it was hard when we moved from Dropbox to share file. Yes. And this is hard again, but it's the right decision for the business. That's right. And it's just,
Kelsey
You know, kind of learn from our experiences. And, you know, we we went through some growing pains, everyone feels like they go through growing pains, but you just
Danielle
cut that out. But it's true. And having these numbers that you look at like having that scorecard has really made a difference. So we offer this feature to our CFO clients so our clients who earn our weekly package have the ability to receive specialized key performance indicators. And I think that that has been something that for me personally has really been moving the needle is having this scorecard right these KPIs that we set together of where we want to see our company go, and and then measuring them. So they don't have to be all accounting, right. I mentioned some marketing operations, they sales, they're leading indicators plus lagging. So leading means they haven't happened yet. So how many discovery calls do we have? How many podcasts recordings do we have coming up? Who are we guessing on what shows or we're we're guessing. And so these are all leading indicators. And then we have lagging. Right? So how many shows did we go on? versus how many discovery calls that we have? How many new clients that we signed? So the scorecards can be built out with your money team to start to help you understand what your business is, and and where you're going? I said it better myself. Yeah. Yeah. All right. So I feel like we nailed it. Right. And anything? Yeah. I think we did this, we just wanted to, so I'm gonna tell them we're actually together in a hotel room. In Austin, Texas, one of our clients asked us to come and be a vendor at her conference. So shout out to Brooke with a line Summit. She brought us here to Austin to help serve other Pilates studio. She's a Pilates studio owner, she has two very beautiful things. Oh my gosh, the studio is gorgeous. So she has two studios here in Austin. And like, just overall shout out to Brooke because she envisioned this. So this is her first ever Summit, and she willed this thing to life. And it's it is, it's been a really incredible adventure. And she brought all these studio owners together and practitioners and people who teach continuing education pour into their professional development as business owners. So we were there yesterday as part of the business owner portion of it, and then coordinated ourselves as practitioners, right, because we're always developing as people, not just in like in your craft, as well as a business owner. So it's been a really beautiful event. So I don't know, I'm really excited to be traveling.
Kelsey
And it's so nice to feel like oh, life.
Danielle
Yeah, yeah. So, you know, shout out to anybody who is, you know, willing their new goals into fruition, like Brooke did, she'd never done this before. And, she made it happen. And she made this beautiful event happen. And like never forget that there's people who want to support you and want to see you grow and succeed. We have a lot of vendor partners who we work with who we want to support them, right, we have another client who will we'll be going to Florida in August, a shout out to Brandi, you guys have heard her on the podcast, she was in really early episode, we're gonna be going to her show. And when she launched the event, I responded back with an email and I said, I want to go. So just don't forget that if you have an idea, right, you have a dream in your business. And maybe it's not something that you're doing today. Reach out and other business owner right or reach out to your partners, reach out to not just your friends, but not just your friends, right. Because Brandi I mean, we're friends now. But like she knows, like she didn't know why. Like, you need to think about who your partners are today? Who could be your partner and reach out because there's more people who are willing and able to help you with anything. All right. All right, tag us shows episode kick started counting on Instagram. Check out all the really funny reels that Alexis made us all do. I was there. I did it. So if I can do it, even though you said you can send us a direct message on Instagram Kickstarter counting, send us an email support at Kickstarter counting inc.com If you have any questions, this was a pretty intense episode. So if you want to share your experiences and what you're doing, you can email us and tag us in your posts. And then don't forget to like and subscribe. That's how this podcast is gonna continue to grow. We're pouring a lot of time and energy into this resource and we are going to continue to do it. This has been a passion project of mine for a long time and we're gonna continue to pour into it but you the listener are going to be what makes the difference in sharing this episode with other business owners liking and subscribing. Get it in the algorithm, right like we're all fighting with the algorithm man. So like and subscribe and let us know how we can continue to support you
Transcribed by https://otter.ai
