In the episode:
01:32 - From paper receipts to leveraging the cloud
05:44 - You need THIS to make good decisions
06:28 - Some business nightmares
08:38 - The problem of fraud
12:07 - The ease of using Xero
14:23 - Better systems for greater transparency
17:07 - From the bad to the good
22:24 - Where to limit access
24:42 - Auditing your accountant
27:22 - If you find a good accountant…
29:47 - What numbers should you pay attention to?
32:22 - When customers don’t pay
35:00 - The power of the subscription model
36:32 - Automate when you can
39:07 - Reducing churn and increasing revenue
40:05 - Summary and takeaways
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Transcription:
James: James Schramko here, welcome back to SuperFastBusiness.com. Today, I have a special guest, we’re talking about business-y stuff. Welcome Scott Orn.
Scott: Thank you James, great to be on the podcast.
James: You're a listener of the podcast, and you've reached out and said you'd love to share some ideas around systems and financial processes, and after my eyes glazed over, I said, "Yeah, sure, that sounds fantastic."
Scott: [Laughs] Well, what we're trying to do here is, you know, at Kruze Consulting we work with about 140 startups, and we have learned all the best processes, best softwares for new businesses to establish themselves on, and so I was hoping just to give your audience some tips, and get them going in the right direction with the best processes and best software services, and save them a lot of grief down the road and do it right the first time.
The shoebox of receipts
James: Perfect. So you've been working with KruzeConsulting.com. And in that process, you've seen a lot of different approaches. I imagine when you first take on a customer, you would find some pretty shocking and horrific accounting practices and systems. So I'm sure that's true, right?
Scott: Oh, absolutely. We literally have CEOs come into our office with a shoebox full of receipts. Like, that happens.
James: Well, you know, I've met CEOs who wouldn't even know where the shoebox is. [Laughs] I'm often surprised at the lack of understanding around numbers by business owners, and it's certainly something that we've pushed to the front of our awareness. In the high-level coaching that I'm doing, we have to know our numbers. We got to understand all sorts of numbers, so we'll come back to what sort of numbers are important in a sec.
But over the years, I went through that process as well, where I'm keeping paper receipts for everything and doing printouts and then a once-a-year tax return, which I used to just dread, putting all that stuff out onto the huge table. I had a large table, it was 1500 cms, which is one half meters, which is pretty big. It's like, probably five feet or something, I'm not sure exactly, but five by five. And it was full of papers. And I would write everything down in a journal, and then I'd go and visit my accountant, and then they'd do the tax return.
A process upgrade
And then of course through that we sort of upscaled to the process where he would send a bookkeeper out to my house once each quarter,