Running an e-commerce business isn’t easy. Between juggling inventory, fulfillment, ads, and marketing, who has time to deal with accounting? On this 165th episode of the E-Comm Show, Andrew Maff interviews Abir Syed, Co-Founder of UpCounting. Abir recognized this challenge early on in their careers at EY, where they saw that traditional accounting firms were not equipped to handle the specific needs of e-commerce brands.
In this episode we discover why it is important for e-commerce brands to have their own specialized accounting firm. For one, it allows business owners to focus on what they do best – growing their brand and serving their customers. Second... well you're just going to have to listen to the episode to find out!
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Andrew Maff and Abir Syed
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While VP Finance at a startup Abir had the unusual opportunity to take over and scale an ecommerce brand they had acquired. Dealing with every aspect of the brand, he developed a love for ecommerce that then led him to cofound UpCounting - an ecommerce accounting firm. He provides fractional CFO services to their clients and also does some media buying on the side - which helps connect the dots between marketing and finance for ecommerce brands.
00:03
Be a big boy and like, pay attention the financials and and look at your cash flows, look at your margins, and make sure things make sense so Hello everyone, and welcome to another episode of The E-Comm Show. I'm your host, Andrew Maff, and today I am joined by the amazing Abir Syed, who is the co founder over at UpCounting. Abir, how you doing? Buddy? Ready for each show? Doing great. Thanks so much for having me. I am so excited to have you on the show one because as soon as we got on this little thing that we use here, you're super fun already to talk to, which, for accounting, not always the case. So I'm gonna hope you like that setup.
01:33
I totally agree with you. So hey,
01:36
you know what? Man, it's, it's one of those things where it's like an incredibly important, like, if not the most important, element of any e commerce business. And I don't see why people can't make it fun. And so far, you're crushing it. So let's, let's show, let's show the world. Let's. I always kind of start these off relatively stereotypically. For the most part, I kind of give you the floor. Tell us a little bit about your background, how you got started, how you started up counting, and then we'll take it from
02:01
there, sure thing, so I'll try to keep it to the super short version. But basically, before up counting, I was VP finance at a startup fairly, fairly well funded one. We raised about $60 million while we were there. We acquired an E commerce brand, and due to some strange HR mishaps, if you will, I ended up running the brand essentially. So had an opportunity to just kind of get really, really deep. Get really, really deep into the E commerce stuff, sending emails on Klaviyo, updating on Shopify, answering tickets on Zendesk, really doing everything, end to end, working with the agencies, eventually taking over, running the ads myself. So kind of fell in love with the E commerce space and got to know it very intimately. When I left, I realized that there was a lack of accounting support or expertise in the E commerce world. E commerce is an industry that is especially dynamic. They kind of make decisions very quickly. The need for data is very, very high, and because of the fact that they tend to operate on these really thin contribution margins, you know, trying to spend as much on ads, get row ads, as low as you can while still remaining profitable, the need for good data is a lot higher than these more old school industries where, like it kind of operate on quarters and years. E comm is like operating on Days and weeks. So basically, I knew there was an opportunity to kind of support e comm brands. I happen to be a pretty good accountant, and on top of that, I happen to know e com quite well. So for me, it was just a very easy, simple fit theory seems to have borne out. We're about 45 people now, but should provide bookkeeping, accounting, CFO services to support e commerce. Brands grow
03:29
awesome. So with where you were at before, because that's a very interesting story that you just kind of got tossed into that. And then it sounds like you also kind of dived into some of the marketing side, which obviously, being a data driven person, that's fantastic skill set to have. How can you tell us? I know you probably can't tell us, like, the actual name or anything, but like, what was, what was the brand that you were running, like, product line, at least it was in supplements, so mostly protein bars. Oh, fun. Okay, challenging enough. So on that side, how did you you started to kind of get into the marketing side, a little bit there too, but you were overseeing basically the business as a whole, even from an accounting perspective. Yeah, everything. I mean, I was still for the parent company. I was still the VP finance, but I was fortunate. I was able to hire someone pretty solid that was able to kind of support me on that. So freed up a little bit of the day to day side. So really just kind of handled everything on the E comm side. Eventually hired a couple other people. Not all of them worked out, but really kind of the buck stopped me with the E commerce side. So that's why I had the agencies at the beginning, hoping they would carry the weights. And when I realized they weren't doing a great job, I'm like, I can figure this out. So I did that too nice. So very interesting. Okay, so on the up counting side, obviously. So you're there. You found the hole in the market. Started to create accounting. The the accounting side is very interesting, right? Because it's wildly important, but it's one of those areas similar to marketing, I would say where, like you, you struggle to figure out, where you draw that line, where is it? No longer you know the CFOs job, and it's someone else's job. So like inventory manager. That type of stuff as you start to bleed into, you know, those costs of what it's going to take to get it manufactured, and then when it's got to come and how it's cash flow and blah, blah. So in the in the terms of up counting, how do you kind of draw that line? What are the specific like services that you offer, and where does that line get drawn? Yeah, it's a great question. So on the one hand, one like, kind of just foundational piece of it is us big, making sure that we keep track of all the transactions that take place within a company. So anything that includes $1 sign, would that be your bank account, credit cards, the dealings that you have with different entities, your manufacturer, goods being shipped back and forth. And we just make sure that all of that data is categorized accurately and in a timely fashion, so that you get very reliable information quickly, so that you can make decisions better. And then on top of that, we're able to kind of build out processes to just basically make that whole thing a lot more efficient, provide more ad hoc reporting. And then for the brands that are a little bit more advanced, that are growing more rapidly, that want to make more aggressive strategies, if you will, then we can provide, you know, the cash flow forecasting, the financial modeling, stuff like that, so that they can have a little bit more predictability onto the into the future. To my mind, the reporting is really where a lot of the Robert meets the road, if you will. Because even if you have a good accountant who can put together the numbers and they're accurate, the truth is that most founders aren't necessarily that comfortable in the spreadsheets and with financial statements. So you can kind of look at it, and your eyes might glaze over a little bit like, Hey, okay, I can read the numbers, but it's not really like landing so we proved, basically, that was why I kind of started building out these visual dashboards that kind of show trends. And a little bit that takes the financial data, as well as some of the e Commerce Data, presents it in a way that, again, having run a brand, I would think to myself, This is how I would have wanted data presented to me, where, even if I don't have that much financial savvy, I'll still get the point and use be able to better make decisions with that information. What is that like? Your own proprietary platform? Are you guys using something like a looker studio or, like, how do you how do you combine all that data? Yeah, it's a it's a Frankenstein of a lot of different tools. So pulling in data from like, the various platforms, like a super metrics type tool, another one that pulls in data into QBO that's all kind of manipulated in database slash Google Sheets, and then that's pushed into a tool similar to Looker studio for the visualizations. Interesting. What's like, what type of brands are you working with? Is there like, you typically find like, hey, you know, if you're unless you're surpassing X revenue, or they're actually, like, certain industries you focus on? Like, tell me a little bit about who you guys work with primarily? Yeah, it's a good question. I mean, the thing about accounting is that technically, especially in E commerce, like, I don't really care that much about the difference between a beauty brand and a supplement brand, for example. Like, sure, a supplement brand might have a little bit more nuance around expiry dates and the way that they track their inventory with lot codes and stuff that, versus apparel, which doesn't. But end of the day, from accounting perspective, all the fundamentals are the same. So industry wise, we're pretty agnostic. And size wise, it's basically we can support anybody. But typically, I'd say once someone's doing above a million dollars in revenue, that's when they're a good fit. And we can kind of handle them until they're 25 50 million, really, until they get so big and so complex where they just really need to build it in house team. Oftentimes it's not so much as function of size, but complexity. So once you start doing a lot of wholesale, a lot of different sales channels and stuff like that. Like that. You have different locations. If you do your own manufacturing, that's where the complexity can get fast or go up quite quickly in terms of clients. Probably our best known one is obvi, just because those guys are everywhere. So that's one that a lot of people know. But then we work with a lot of other ones, like man made, who's very well known, kind of like underwear brand for men, rival boxing, if you're into fighting sports, they're pretty well known in that space. So, yeah, I got, I got some cool ones, nice. The Is there, like, a, is there a limitation to, like sales channel? So do you only stick to the E commerce element, or is it also still work out if they, you know, if they also have, like a retail presence or something like that. No. Good question. Shopify is our bread and butter. But no, we're pretty much comfortable with any sort of sales channel. Obviously, most brands will eventually kind of expand outside of Shopify. So when they go into wholesale, if they're using EDI, if they're on Amazon, all that stuff, it's all within our comfort zone. If anything, most accountants are more comfortable with the wholesale stuff than they are with the Shopify stuff. That's where stuff becomes a little bit too digital for them. So if we can handle Shopify everything else, easy peasy. Yeah, and it's the same for Amazon, right? Like, I think you guys also do have a pretty big focus on the Amazon side. Is there, like, a different kind of approach to how you have to deal with that? I guess maybe because of, like, FBA fees and something, or I really could just be guessing, no, no, you're you've got kind of the idea. The only thing we're able to handle it, the only thing that makes Amazon a little bit more of a pain is because of how awkward the reporting is. So Amazon doesn't give you the best data. So it's definitely like we've kind of developed a process to be able to pull that data and figure out how to account for it. But that's the thing that definitely a lot of people struggle with. We've taken over books many times in the past, where people, just for example, look at a little bit of cash that you get booked at as your sales, not realizing that that includes FBA fees and your ads, and your your all your transaction fees, your Amazon commission, all that. So it's just there's more reports to kind of break out, as opposed to Shopify. It's just mostly transaction fees, taxes, shipping. So a little simple, okay, what um? At what point do you kind of draw the line on um? Yeah, I guess presenting the reporting and then also, like the consultation side. Like to give an example, I can't remember when this was we had the the founder of butcher box on the show, and he gave, he was given so much information. It's really cool. If you haven't for those you're listening. If you haven't checked it out. It's very interesting episode. He gave some insight into how they deal with manufacturing because of issues with lead times, especially with with meat, and then basically how that, how he's able to use that to project cash flow a lot easier than most brands can, because typically, you know, you're placing a pretty large order, and sometimes it's as big as, like, net 90 terms or something like that. And it gets kind of ugly, like, at what point do you get involved in providing insight when you're looking at things like that and you're projecting cash flow for, you know, manufacturing orders that they have to place? Yeah, it's a great question. It all comes down to kind of the scope of the arrangement that we have with every brand. So for the larger ones, where we're kind of working with them on the CFL level, we try to provide them insights wherever anything comes up that we're able to identify. So for example, with some of the larger brands I work with personally, we'll kind of get on weekly calls. We'll look at their cash flow. We'll kind of talk through the various items that are, you know, significant that are coming up in the pipeline that we'll have to be worried about from a cash out of flow perspective. And we'll have conversations about that, whether there's different ways to kind of finance. It different ways to kind of make arrangements with manufacturer and then even from a long term perspective, how do we get over this upcoming hurdle, but then how do we kind of make things a little bit better for us in the future? So ultimately, the goal is, I mean, philosophically, we're just trying to provide as much value as we possibly can. From the perspective of, like, all of our expertise, everything we've learned. So even if that goes beyond the accounting and finance side of things, at least speaking for myself personally, I can't say everybody on my team has this expertise, but I'm a little special in that regard. I do quite a bit of media buying as well, so I also have quite a lot of insight in terms of kind of like, how the ad platforms are performing, how things are going, how much of a reasonable investment one can make, whether or not the assumptions you're making about your growth are actually something that is, you know, realistic. So from that perspective, again, if I can have that conversation with a brand, even if I'm not their agency, I'll still have that conversation with them to make sure that any sort of insights I can share with them I'm able to provide, because in the day, I just want everybody to win. Yeah, isn't that a kind of a different skill set? Like, in my opinion, the the accounting side is very black and white, right? Like, it's very much like, here's what you have. Here are the facts. It kind of is what it is with uh, specifically with paid media, I would say more so on, like, uh, on, like, a meta side, when you're involving like creative and targeting audiences versus like, specific keywords that have a standard cost for click and stuff like that. And then obviously your creative kind of gets involved in how the interactions are with that. How do you kind of make the judgment on those when there's a little bit more of, like a finesse to it? I guess you'd say, No, it's a fantastic question. So to a certain extent, when it comes to, like me, being in an ad account, specifically, just like any other media buyer would, right, like you, you have your understanding of what works from creative strategy perspective. You have a lot of experience. You've seen a lot of ads work, and then you also lot of ads work, and then you also know, generally speaking, from having run a lot of accounts, how stable you can expect that sort of ROAs, or how well that ROAs will hold as you start scaling. So to a certain extent, it's a little bit of that. If I'm working with a brand, and they are, for example, they just raise money, they're kind of projecting out some pretty substantial growth in the new year. Oftentimes, they'll come in and they'll come in and they'll have these, like, sort of hand wavy sorts of calculations. Like, okay, cool. We're at about a 3.7 blended ROAs. Now we're thinking that over 2025 we're gonna increase our revenue 20% every single month, and our ROAs is also gonna increase over time. Like, that's obviously a silly example, but that's the kind of thing I can look at. I'm like, Yeah, that's not gonna happen unless you decide to also allocate some massive amount of money to creative strategy. But even then, you'd also be able to have to have a bit of a proof of concept that you can sustain your performance at that level. And part of that is also just knowing, you know, having some amount of marketing awareness to know the kind of product you have, how big your time is, and what sort of realistic likelihood there is to be able to scale to that by looking at competitors as well. So part of that just comes down to, I guess, judgment and marketing experience, I suppose, touche, so you have your hands deep into these businesses from an accounting perspective. In some cases, you're also involved in the marketing side. So you've obviously got your ear to the ground in the industry. What's your thoughts on where it's going? Right? Like your are a lot of brands, are you starting to see any type of pivots in any way, shape or form, either from an accounting perspective or from a marketing perspective, or just how they're running their business in general? Yeah, it's a great question. I'd say that. I mean, the funny thing about accounting is that also unfortunate insofar as being able to talk about it, is that generally, doesn't change. It's the same stuff. It's not about Mark. There's all like marketing. There's some new, exciting tactic every week. But I will say that there is, what I've noticed, in the past year or so, there's been a very substantial increase in the amount of founders who have an awareness of certain financial terms and concepts. In particular, something like contribution margin like that became a buzz word for quite a while in marketing circles, because people just kind of came to a point where they understood that it's not all about just having a great ROAs and stuff like that, right? Especially because basically cost to advertisers. Kind of perpetually increases over time. I'm sure with the Tiktok ban coming around, there's a good chance that cost advertising is going to shoot up even more with a lot of that money kind of moving back into Instagram. So from that perspective, the need, and I shouldn't forget also the fact that there's also been less investing activity in recent years as well. So there's generally it has kind of trended towards being a little bit more difficult, like E commerce and industry a little bit more difficult to place, to win. So from that perspective, people have just been a lot more attentive to just running a bit more of a, let's call it sophisticated business, in terms of actually paying attention to your financials, like any other business would rather to be, kind of like an old school cowboy thing. We just kind of let some ads rip. See the row ads go up shop, the fire revenue shoot up, and I'm Gucci. Everything's great now, like, you actually have to, you know, be a big boy and, like, pay attention the financials and and look at your cash flows, look at your margins, and make sure things make sense. So it's nice, because I think the general community has been sophisticating Quite a lot, and so they're, they're making smarter decisions and becoming more aware of how important it is to have good data. Yeah, one of the things I've been seeing for a while now that's been, like, one of my favorite things to talk about is from an omni channel, like, kind of marketing perspective. So obviously, me being on the marketing side, that's how I'm looking at it. Of like, you know, you're running ads to a website. It's, you know, just in layman, they're migrating over to Amazon, right? Like, you know, vice versa, etc. So from marketing perspective, you can figure out how to manipulate that. How do you look at that from an accounting perspective? How do you evaluate, okay, you're spending x amount on advertising on Amazon, and you're seeing why? However, because you're having people bleed over to your website, you're also getting this like, are you looking at it from an extremely high level, or are you actually looking at it from like a per channel basis with the brands, and then, if that's the case, how are they kind of painting that picture? Yeah, that's an excellent question. So there's two aspects to it. Number one is that, yeah, we do typically break down financial reporting into a channel level or on a channel basis. From my vantage point, the way I often explain it is that selling on Shopify versus selling at Costco are basically completely different businesses. Your margins are completely different. Your timing of cash flow is completely different. The volumes that you're doing is completely different. The way that you drive increases in revenue on Shopify, mostly Facebook ads, versus how you increase it at Costco, very different. So they're basically too many businesses of their own. So anybody who kind of merges them into one PNL, you're losing so much data that is very, very difficult to really understand what's going on. So absolutely, we'll segment things out insofar as how we kind of draw the interpretations. A very significant amount of it will overlap with what marketers look at too, which is basically omni channel kind of presence, the halo effect, cannibalization between channels. All that is extremely relevant. But we go, I'd say maybe a step further, in addition to also including all the costs that go to support those various channels. So simple example, just to kind of illustrate it, would be, when you launch at a wholesale let's say you go, you go into Costco, so you launch over there, you're doing a lot of sales. A big chunk of that is going to cannibalize sales from from Shopify, undoubtedly, at the same time, a lot of the Facebook ads that you're running. Maybe your ROAs isn't quite as strong on Facebook, but you also know that you have the halo effect of all the ads that are running over there to be able to support the Costco presence. So that part, again, marketers are quite well aware of that. But we'll then start also looking at all the additional costs that to go into supporting a channel like Costco. So how different your margins are, how much the shipping and distribution costs are there, and then also everything around commissions. So if we're talking about, like, a larger strategy with a lot of different wholesalers, and you have a wholesales team, you have a lot of commissions there, and the cash flows are also very different. So you might have, you know, a really good week on on Facebook, and you'll see that revenue within the week, essentially because and you'll pay your ads, like, 30 days later, but you'll get your Shopify revenue a few days delayed, but you'll get it right away. Whereas on Costco, you're gonna run ads for quite a while. You're gonna slowly build up that awareness, and you're going to get an order from Costco. You're gonna ship it to them. It's gonna take them time for it to hit the shells, and then you're gonna collect from them, 4590 days, whatever the terms are, way down the road. So from even from a cash flow perspective, it's just a completely different beast. So there's a lot of additional things to consider, but tons of overlap with what marketers are thinking about too. Do you find that that is kind of how most brands are looking at it, as like, more of like an individual channel, and then marketing is just kind of a, I guess, like a bleed over in all of them. I think that a lot of brand I think it comes down a little bit to their sophistication. A lot of brands come to us where, kind of all their brands or their channels are kind of blended together. So the founder oftentimes has an intuitive sense of the fact that they're kind of very different things. And so they'll kind of like do their own little math, if you will, to be able to see, okay, how is wholesale performing, how Shopify performing, but in terms of what they're getting as financial statements, it's all kind of blended together. And I find that's kind of the interesting disconnect where, like we recently started working with a brand where he basically had an internal person rebuilding the entire PNL based on their sources of data, and ignoring what they were getting from their accountants. Because, like, well, this is how we want to look at it. I'm like, but yeah, but you can just get your accounts to do it that way. If they're breaking it out the right way, you don't need to have the work done twice. So intuitively, they know what they want to see, but they're not accountants, so they just kind of like, cobble something together to get the. Information, but oftentimes it's the accounting side of it is not done ideally from from day one, yeah, that makes sense. What's like the biggest problems you typically come across once you're like, Okay, we're starting to work with someone, let's get in there. Nine times out of 10, what's the big problem? So not uncommon at all, to see, depending on who they were working with in the past, especially if they're working with like non e commerce specific accounts. Very, very common to see people just taking the cash coming in to your bank from Shopify and just booking that as revenue. Same thing with Amazon, like I mentioned. Just book that as your revenue, not really identifying the fact that there's a lot of different expenses in there. So the information is completely skewed in terms of your sales, your discounts, your transaction fees, FBA fees, commission, stuff like that. The other one, very, very common, is inventory. Everybody, like every brand I know, struggles with inventory, inventory tracking, inventory costing, knowing your cost per unit, if you don't your cost per unit, then you can't calculate your break even row as correctly. Like that is a complete disaster. Everybody has a problem with that. It really never ceases to amaze me how little brands actually know their true cogs. Yeah, it's really impressive. Like, I am always shocked at some of the conversations I have with some brands that are guys doing well into seven, eight figures. And you ask them, like, All right, what's, what's your cogs for? Like, this product line, they're like, I don't know. I got to figure it out. Like, okay, no, hundreds. I don't know how you're gonna figure out anything else. Then, no very, very common a brand cannot give you an accurate break even, realize they'll give you a rough number, like, ah, if you're above the three, you can scale to the moon. Was like, alright, yeah, but what's your actual break even? ROAs, they don't know. That's amazing. So what's like, what's, what's the next steps with up counting? Are you guys exploring just, obviously, just continuous growth with the company. I know some agencies, they start looking at like software stuff like or what's the what's the game plan? It's a combination of things, to be honest. Like, we've got a lot of ideas. So on the one hand, we do want to just keep on continuing to grow with the types of services and clients that we have, but we're looking to kind of implement software and different aspects of the way that we deliver our service, ultimately, thinking, how do we continue to keep adding on value to what we do? I'd say, in our space, we're one of the younger companies. A lot of the other ones that are competitors, if you will, have been around for like, 10 years. We were only about four years old. So there's a lot more that I keep thinking and theorizing about. Like, if we did this or this, or this or this, we'd be able to provide even more value. So for example, cash flow forecasting is an easy example. That's a fairly manual process. So the more we're able to kind of make that easier and more accessible, then we can provide that to more and more clients for a lower cost, so that more people can enjoy the value of something like that. So we're constantly making strides in so far as what we can do to kind of improve things inventory as well. Big one, just because a lot of people have that problem, a lot of people don't have a solution, and we'd like to be able to, we are able to work with the solutions they bring, but we want to be able to kind of bring them solutions to so just constantly iterating on product, make it as good as possible, so nobody could possibly find anybody better than us to work with. I apologize for asking this, but I know this is, like the sexy term that everyone always has to ask. So like, how much are you leveraging AI to figure out those kinds of data points? Not enough at the moment, just because there aren't enough tools that are doing a great job of it. But it is something we're kind of working on and exploring in the background because we know that that is future. So it's not by any means something we're afraid of or want to ignore? Yeah, I can see it's potential, but I completely agree. There's so many things where people will post stuff and look how great this is, and then you go to do it like it's actually not that cool, exactly. This is great beer. Really appreciate your time. This is awesome. Super appreciate all the insight you gave us today. I would love to give you the floor let everyone know where they can find out more about you, and of course, more about up counting. Yeah. About up counting.
23:43
Sure, no, I appreciate that. So upcounting.com. UpCounting, if you want to work with us or just kind of learn more about our services, and if, for some reason, you want to follow me, I'm all over the place. Abir_CPA or .CFO, depending on the platform, my name's unique enough you Google that you'll probably find
23:59
me beautiful over here. Thank you so much for being on the show. Everyone who tuned in, of course, thank you as well. Please make sure you do the usual thing, rate review, subscribe all that fun stuff on whichever podcast platform you prefer, or head over to The E-Comm Show.com to check out all of our previous episodes. But as usual, thank you all for joining us, and we'll see you all next time have it going.
24:18
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