Thread by @smalter

the financial stack of a multimillion dollar services business 👇

@chargebee abstracts away payment method (credit card, direct debit, invoicing) and payment terms into subscriptions.

it does revenue recognition for accrual accounting so no more insane spreadsheets from your accounting team that are impossible to understand.

chargebee runs on @stripe as the payment gateway.

stripe creates a virtual bank account for every u.s. based customer who pays via invoice and automatically marks invoices as paid when cash hits the account.

avoids a ton of manual, error-prone work.

because chargebee doesn't have any commenting / collaboration tools, we import late invoices automatically via a custom script into google sheets every monday morning to discuss what steps are being taken to get those invoices paid.

see @kevinakwok's kwokchain.com/2019/08/16/the…

@teampay handles purchase request and approval with a nice workflow in slack.

each approval comes with an audit trail so you know who requested, who approved, and why.

teampay imports expense categories from @QuickBooks and makes categorization part of the workflow.

before @teampay, we just had a shared credit card we stored in @1Password.

at the end of the month, i would have to chase down different expenses to figure out where they came from and whether they were still needed.

@teampay runs on a @SVB_Financial debit card. it creates a new virtual credit card # for each expense.

the only downside of using teampay is that you don't get credit card points. so we put our big recurring payments on our @AmericanExpress card and the rest on teampay.

our bank is @SVB_Financial. because i never wrapped my head around the sweep account, the roi seemed low, and it came with some risk, i opted instead to open a savings account with @bankmercury.

now every month, i'm moving some percent of profit into our mercury account.

@expensify handles reimbursements.

it also imports expense categories from @quickbooks, which reduces the end-of-month work in categorizing expenses for the purposes of creating financial statements.

@JustworksHR runs our payroll. we moved from @GustoHQ recently to get on justworks' peo health insurance which requires you to use justworks for payroll. we got significant cost savings without compromising on coverage by moving to peo for health insurance.

in @GustoHQ, you could categorize your team members by dep't and feed that into different payroll categories in @QuickBooks.

i think that isn't possible in @JustworksHR though i'm not 100% sure.

breaking down payroll by category helps you understand your ratios much better.

also, it allows you to put some payroll above the line as cost of goods sold and some below the line. that helps you understand your margins better.

we pay international contractors through @GoVeem.

@JustworksHR runs payroll 2x/mo and pays u.s. contractors 1x/mo at the end of the month and veem pays international contractors 1x/mo at month's end.

@PilotHQ does our books. they deliver them by the 15th of the following month which makes them timely and useful.

they integrate with all of the tools we use and pull in data themselves from all of those sources. that dramatically reduces manual labor and human error.

pilot requires that you use @QuickBooks, so we switched from @Xero. the main similarity is that they're both hard to use.

the thing that drives me insane about quickbooks is that when looking at the p&l, you can't right-click open in a new tab.

before @PilotHQ, i just glossed over my financial statements. now i actually use them to run the biz which has leveled up my financial operational skillz.

@ProfitWell connects with @chargebee and delivers subscription metrics.

chargebee has its own metrics product but i still trust profitwell the most for accuracy in terms of how they calculate the metrics and how they define them.

flightpathfinance.com helped us get a lot of this set up, especially

- switching from stripe for credit card and direct debit + @billcom for invoicing to using chargebee
- going from generic categories on our p&l to ones specific to how we think about our biz

we're starting to use flightpath's software for projections and goal setting, and to review how we did re those projections/goals on a monthly basis.

by making these changes, we were create leverage by producing financial statements that everyone on the company's leadership team could use.

for those running the day to day, we reduced manual labor and increased accuracy via automation and tools with superior ux.