Hello, I am Melissa Traverse here for the Taste Radio podcast talking about some of the biggest
tension points that CPG brands and founders face when they're scaling a brand and those
are financial accounting and inventory management.
I am joined by Matt Lynn, inventory accounting guru from BELAY Solutions and he is going
to shed some light on all of this that is going to help everybody out quite a bit.
Matt, thank you so much for joining us today.
Thank you for having us, Melissa.
It's great to be out here at Expo West and it's great to sit down and be able to chat
this because it's kind of a passion project of ours working mainly with CPG brands and
hoping to help them scale.
It's been such a pleasure chatting with you and the team and learning all about what you
do over there, BELAY Solutions.
Can you tell us a little bit about yourself and what your role is and the kinds of solutions
that BELAY gives to CPG brands and founders?
Yeah, absolutely.
My role with BELAY, I'm actually our inventory accounting manager.
I run our inventory department so we work with CPG brands, taking them from spreadsheets,
putting them on inventory management systems and really helping connect their tech stack
between their sales online marketplaces to that inventory management system even down
to their financial systems like QuickBooks.
BELAY overall is kind of an outsourced accounting firm and with that we're helping teams
we have different levels with bookkeeping, controller level work, even high level into CFO type
items.
So we really help those brands in any way that they need financially and then I just
have a subset of a department where we're really just laser focused on inventory.
It's certainly a complex topic and there are plenty of places to go wrong.
Let's start by going right and start super simple.
Can you tell us what some of the biggest red flags are that would help a founder understand
or the person running a brand understand that it really is time to get some help with some
of these areas?
Yeah, absolutely.
I think some of the early red flags is just everything is chaos.
So when they're looking in their financial software maybe they don't really have an accounting
background and they're kind of just piecing it together and doing their best and what
they'll see is that reconciliation take forever.
If they even happen, they have a lot of transactions that don't get coded or they just put them
into placeholders to just get rid of it so it's not an outsour.
They'll notice they have revenue but no cash or they notice that they have a good amount
of cash but their blind spot is really seeing the vendor invoices that are sitting there
just needing to be paid and so they just lack that clarity that's going to really be
around the corner.
You know you were talking about one of the red flags that comes up that I think makes
so much sense when somebody asks you what your numbers are and you can't come up with
the right number that's a big problem because that's something that you really should
be able to share with decision makers who you know you're ideally looking to do business
with what should you be able to call up at a moment's notice.
Really at any time you should be able to know an accurate margin.
It's amazing how many founders wind up talking to that they can tell you their revenue numbers
they can tell you their selling price and then the minute you start talking about cost
or their cost of goods sold they just get a deer and headlights look.
So really it's very hard to tell am I even making money or if you don't know you're
entire landed cost.
Maybe you know what the freight cost is the duties separately but you're not really getting
that as part of your unit cost.
So it's really hard to tell am I even making money or am I losing money from the very beginning.
And do you recommend that founders are able to call up a margin by channel?
Absolutely and depending on the number of products and channels you kind of want to know
what are your best sellers which ones are making the most and which ones maybe you're not
making as much but especially if you're branching out and you're doing D to C with B to B absolutely
want to know that.
Gotcha.
You mentioned that when things feel really chaotic that's probably your red flag.
I would say that it probably almost always feels chaotic if you're running a CVD brand and
I know this may be hard to quantify but is there a revenue number is there a number
of doors number that would help a brand understand whether or not it makes sense to bring on a partner
like belief understanding that so many brands are bootstrapped or they might be tied for cash.
What is that for Tim point?
Absolutely so there's not really a set number it's a little bit different for everybody depending
on where you're at in your process and sometimes just your level of understanding of financial
aspects.
When you're first starting and you really cash conscious and don't want to spend that
much money you may keep it on yourself.
As you're growing as you're getting to those six figure revenue numbers and especially
as you're approaching seven you want to make sure you've got good financials because as
you scale to that point most likely you're going to be looking to raise capital and investors
the first thing they're going to look at your books and are they clean and do they show
a clear picture of your business.
You know another area that folks might look to to organize some of the chaos are their
systems.
So many folks stick with Excel spreadsheets for a good amount of time.
How do you know that you need to outsource some of your accounting to an organization like
BELAY Solutions versus maybe signing on to a SIN7 or Netsuite or something like that.
Well that's actually something we really help with.
When it comes to that cost question that's something that trips people up and sometimes
if you just have a turnkey business you buy and sell a finish good you can maintain
with spreadsheets and we've had clients with a million dollar revenue that can do that.
We see so many brands nowadays are using contract manufacturers and they're just sourcing
certain parts of their product.
So when you start talking costs they have no idea exactly what their unit cost is.
So that's where we come in and we kind of understand we'll speak with the customers
and the clients and get their needs and then if we think they're ready for a system they
will help put them on that system so they can get some of that clarity and it's not something
we force on anybody.
There are plenty of times where founders come to us and we'll tell them bluntly you're
not ready for it right now.
But we'll let you know when we think you are.
That sounds like excellent advice.
What should a founder or somebody running a brand look for in an outsourced accounting
partner like are there certain checklist items that they should make sure that their
partner be able to execute or be able to help them understand?
Absolutely.
I think one of the keys there's a lot of outsourced accounting firms out there.
Some focus on service-based SaaS companies but if you're a CPG founder you really want
to make sure that your accounting firm has CPG experience.
I would ask them what kind of brands have they work with and even beyond that industry
specific because there's so many subsets of CPG and that's something that I think is great
about what we do with Belae is that we kind of run the gamut.
It's kind of like the insurance commercial we know with thing or two because we've seen
a thing or two across a broad spectrum.
Probably getting references is always helpful right?
Absolutely.
All right so this all sounds great.
I think we have a really good understanding of would it make sense to hire an outsourced
partner what some of the things you should be looking for are what does offloading this
kind of work mean for the brand?
What can this do for lightening the load of a founder or lightening the load of a brand
operator?
How does that help them in their everyday business?
It just tries to really help quiet the chaos.
So what we're looking to do is just take some of the weight off that founder's shoulder.
Let them focus on building the brand, building the business, getting that exposure.
If you don't have sales you really don't have anything so we want them to be able to focus
on that while we take care of your back end office work and we can just present that to
you on a monthly basis you can help make decisions you can take that to investors and really
you can just focus on growing your business.
I feel like I felt founders and the folks who are running brands collectively sigh.
Breath of relief just hearing that.
How can people learn more about BELAY solutions?
So people can text taste to 551-23 for their free inventory guide to get started.
Matt Lynn, inventory accounting guru at BELAY solutions.
Thank you so much for joining me here at Expo West.
It's been such a pleasure to chat with you and learn about what you all do over there
to help founders and brands with their financial accounting and inventory management.
For everybody else out there, thank you for listening to the Teased Radio podcast.
I am Melissa Travers and we'll see you next time.
