Episode description
Episode description
On this episode of DTC Pod, We dive into the challenges of building a product that combines traditional accounting, finance, and tax with the progressive world of DTC, and the importance of financial statements, tax-saving opportunities, and inventory management. We also explore the impact of integrating real-time cost of goods sold data, the importance of understanding profit, financing, and cash flow, and the potential of measuring return on net profit. Finally, we talk about ways to identify profitable products and unlock business opportunities, and why focusing on conversion alone may not necessarily lead to profitability.
[00:01:34] Real-time ecommerce bookkeeping. Inventory system coming.
[00:04:12] Lios background in accounting and law.
[00:08:35] Essential financial basics for DTC brands.
[00:12:02] Ecommerce-specialized bookkeepers and software.
[00:16:02] Finaloop - high-value real-time accounting.
[00:23:54] Full ledger with SaaS functions. Investing in R&D.
[00:27:47] Integrating inventory management system.
[00:31:06] Real-time financial data. Net profit-based ROAS.
[00:38:37] Understanding profits, cash flow, and financing is crucial.
[00:47:53] Tips: pick up deductions, recognize bad debt, legit deductibles.
The Rise of DTC Brands in the Financial Ecosystem: "I just couldn't ignore the big opportunity of combining, I'd say, the traditional word of accounting finance tax into the progressing word of DTC. And this is basically how Finaloop was born."— Lio Pinchevski 4:12
Outsourcing Bookkeeping: "Even for these firms, the bookkeeping work is usually a loss making part of the business that is just meant to cross finance the more profitable part of the business, which is the CFO and the taxes."— Lio Pinchevski 16:02
Challenges of building a broad MVP: "With us, we're a different animal. We are somewhere between an infrastructure company and a SaaS company. So we built on one side a ledger, a full ledger, and then on the other side, we need to add SAS features to this ledger. This is unique because if you think about bookkeeping, either I do your bookkeeping or I don't do your bookkeeping, and then you need to get a bookkeeper."— Lio Pinchevski 23:54
Real-time Business Management: "If we ask 100 brand owners right now how much money in cash and in profit they did yesterday, 100% would tell you that they don't know. They know roughly how the business is doing. They don't know exactly how it's doing. And the difference in 2023 between roughly and exactly is huge." - Finaloop's focus on real-time PNL, balance sheets, and KPIs can revolutionize brand management by providing exact information instead of approximations.— Lio Pinchevski 31:06
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Episode brought to you by Finaloop, the real-time accounting service trusted by hundreds of DTC Brands. Try Finaloop free - no credit card required. Visit finaloop.com/dtcpod and get 14 days free and a 2-month P&L within 24 hours.
Past guests & brands on DTC Pod include Gilt, PopSugar, Glossier, MadeIN, Prose, Bala, P.volve, Ritual, Bite, Oura, Levels, General Mills, Mid Day Squares, Prose, Arrae, Olipop, Ghia, Rosaluna, Form, Uncle Studios & many more.
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Lio Pinchevski - Founder and CEO of Finaloop
Ramon Berrios - CEO of Trend.io
Blaine Bolus - Co-Founder of Seated