$100K in Amazon Sales and Still Owing Amazon Money: Why Your Payouts Don’t Match Your Sales

Speaker A: All right, this episode is brought to you by our friends over at Discounte. Now, Black Friday, depending when you're listening to this, is literally a few weeks away and you probably have more than one sale in mind, like a, uh, buy more, save more deal on your best sellers or a free gift over a certain amount or free shipping for the weekend, which is pretty popular. Discountee lets you set all that up in one place. Schedule each campaign to start and end exactly on time and to show an offer on your storefront with quantity tables, a countdown timer, or even a cart progress bar. And if you'd rather not fill in forms, there's Loomis, which is their AI assistant, which is inside Discountee. You literally describe the sale in one sentence. I don't know, something like 25% off the winter collection until Sunday. And Loomis drafts the campaign for you to check and save. You can also ask it about campaigns that you already have running. So that's even great. No developer is needed. And when you get stuck, they actually have real people on their team that can help you with your answers. So discount is even built for Shopify, so it has that privacy and that quality built into it. And more than 20,000 stores are using it today. There's even a free plan to get started, but we have a special code, Fastlane. You get 90% off your first month if you select Light essential or the discountee plan. And that's good until the end of December 2026. So go check them out if you ecommercefastlane.com discountee. That's ecommercefastlane.com discountEE. All right, let's jump into today's episode. Welcome back to Ecommerce Fast Lane. I am your host, Steve Hutt. Now today's conversation is all about, like, why a little bit, but why your Shopify payouts don't necessarily match your sales and, um, what that gap is quietly costing you. I've done some research on this. It's so interesting, the disparity between what your financial systems are showing and then what Shopify is showing. And the same problem happens too, even from a traffic perspective. We've always seen analytics in Shopify being 10, 15 different than what Google Analytics is showing or even third party pixel tracking tools. Right? And what's interesting though, so if you're around and then the sweet spot is if you're around a thousand or orders or more a month, uh, likely selling on Amazon like most people are, or even on TikTok, shop and you're worried that you Know, the end of the month is still like a weekend full of like Lily buried in spreadsheets. If that is what your life is like right now, then this episode is definitely for you. I can guarantee that. Um, my guest is Stefan and he's sales and onboarding lead at a company called Link My Books. And uh, they're@linkmybooks.com so you can go check them out. But before he, uh, held these commercial roles, uh, he was over at QuickBooks, uh, I think he was working for a company called Dext for a while, um, and was even a pay hawk. So there's, he's uh, he's uh, been deep into the fintech world and uh, you know, and now, uh, he's a person that now is sitting with sellers and literally like walking through their payouts line by line. Like he really gets into the weeds to really help shopify brands. And I'm really hoping, uh, by the end of this recording that you'll know what comes out of a payout before it even hits your bank. So you have this knowledge or where these tax overpayments maybe they're hiding in your multi channel business. Um, and you know, the first thing hopefully where you can fix all these 50,000 things a month that you're doing. Uh, hopefully, uh, this recording will help you figure out, well, how can we solve some of this complexity that's happening. So. Hi Stefan. Uh, great to have you on the show today.

Speaker B: Hi Steve. Thanks for having me on the show.

Speaker A: A little bit of a long preamble there. But you know what's interesting? And I always joke whenever I have, uh, someone in a financial background, it seems like it always can be more of a dry content. It's like, oh, you know, the thing was, is that the reality is that the financial health of a business is incredibly important. It's the only way you can make intelligent decisions, um, on the business. Right? And having financial health, even if you're not even looking to sell your business. I mean we talk about having your P and L in great shape, uh, if you're thinking of an exit, you know, in a couple years down the road, and that's table stakes, uh, for the, a new acquirer. But in today's standards, it's like, no, no, the business owner, controller, financial person has to make decisions, but they need to have clean data and they need to have it all set up accordingly and not just an afterthought once a month. And so that's the reason why I had you on the show. I learned about LinkMyBooks M. I'm like, this is a very interesting solution that is not just a QuickBooks connector or a Zero connector. It's way, way, way more than that. So before we jump into some of my questions I have for you today, like I said, you worked at QuickBooks and a few other places. Um, what pulled you uh, into the E Commerce accounting specifically? Was there something that pulled you into that market?

Speaker B: It's a good question actually. Um, I think the answer to this comes from my time at Dext. Um, when I joined Dext, I started interviewing with a company called Receipt Bank. In the midst of the interview process, they rebranded to Dext after an acquisition. And once I joined two months later, they actually acquired a company called Greenback out of Michigan, which um, basically does something similar to what we do. Um, E Commerce accounting automation, plugging into various sales channels and helping the bookkeeping and accounting side of E Commerce. And um, that's uh, sort of my first. Um, that was basically my gateway into. Into E Commerce from a software vendor perspective. And um, you know, since then, obviously once I had an opportunity to join Link My Books, um, as uh, you know, to help build out the sales and onboarding function, you know, this is where I really took a deep dive. Um, Dext obviously has multiple products. Um, and so one of those was uh, a product that became DexCommerce, which is uh, now uh, one of our competitors.

Speaker A: Right. So let's talk a bit about like when you open up, let's say a uh, seller's. Because you're in the weeds for sure, you open up a Shopify sellers kind of payout, like let's say, uh, and you guys work together on this, you take a look, um, and for the first time, like what's already been taken care of, um, before it hits their bank. Because I just want to make sure we set the stage a bit about like what is Shopify doing natively from a payout perspective when you log into their admin and have a look.

Speaker B: Uh, so typically one of the uh, questions I get, uh, very often from um, merchants that we work with is um, effectively wondering why the deposits doesn't match the sales figures. So what they've received in their bank account isn't what they expected. And I think this is fascinating. Um, um, I suppose division of labor. Um, M. Merchants are mostly in the trenches, in the weeds with the operational work. Making sure that the warehouse has, you know, the goods they need, um, to keep sales going. Uh, make sure supplier relations are on point, make sure suppliers are paid on time, um, advertising, branding, you name it, right? Working with agencies, uh, PPC agencies, SEO now, you know, um, uh, AI, search, etc. Etc. And staying relevant all the time while in, at the same time they have to deal with a lot of externalities coming from, you know, compliance from regulations, from um, changes on the various platforms they might be selling on, etc. Etc. And you know, the operational side is so heavy and so intense that accounting becomes a bit of an afterthought. So uh, it's easy to look at how many sales have I done this month and then be confused about what you're seeing in your bank account. And time and time again, um, we hear of these, I guess the clash of two worlds that have to, you know, operate together hand in hand. The accountant doesn't know about, or the accountant bookkeeper, they, they don't know about the operational side and they shouldn't, it's not their, it's not their expertise. And equally a merchant isn't an accountant by, by trade typically that's a different, um, it's a, you know, it's a, it's a different Persona, a more entrepreneurial Persona, um, you know, a risk taker by nature. Right. To start an online business and to keep pushing against all the odds, you have to have um, a lot of entrepreneurial spirit and truly believe, um, that despite the risk you can still make it. I suppose the nature of a bookkeeper or an accountant will be, would not be a risk taker. Naturally they have to be risk averse because every mistake they make ends up with an audit, you know, a fine, ah, revenue services, you know, asking questions, etc. So the risks are real and you know, that's why numbers matter so much and every decimal point matters. And the clash of these two worlds is what we, where we come in in a way because we work with both sides. And uh, if I may quote our founder and CEO Dan Little, um, revenue is vanity, profit is sanity. And one of the things that we help with is to clarify ultimately for merchants and their accountants, um, you know, what are the, what are the numbers? Uh, they should be looking at why and how to best track process and ultimately crunch these numbers for um, profitability, P and L reporting, etc. Etc.

Speaker A: Yeah, it's amazing. So like, was there anything specifically that you think about that, um, you found why there is this disparity between what the founder's expectation is about what revenue is supposed to go into their bank account and why what actually gets deposited, why it is mostly different because I Think at the end of the day, like people are trying to make financial decisions, but if the revenue is, you know, if the quote unquote, the profit going into their bank account is not what was expected, then we have to figure out like why that is. Um, is that where you fit into that mix is you, you can you share exactly why it is? Because clearly Shopify is making decisions about, with Stripe is, you know, putting these deposits into your bank account. But, but what's the why behind here's My revenue? Why is the deposit different?

Speaker B: Well, typically where we're seeing discrepancies in the data. And what causes this discrepancy? Um, you know, there's a few recurring themes here that, that are worth noting. Um, the timing differences. So sales are recorded when the order is placed. Payouts arrive days later, typically, you know, depending on the channel and of course, um, you know, the frequency that's selected on each channel, but typically two to five business days later, depending on the country. And um, you know, the platform used, um, orders from the last few days of a period show sales but haven't been paid out yet. So typically it's the confusion between looking at um, you know, a sales report, which takes the sales aspect of this versus looking at payout reports. And those are, uh, those are two separate reports. And very often in a merchant's mind those are the same reports because, hold on, shouldn't the payout be equal to the sales I've made? And it's a common misconception. It's actually crazy how often we hear this. Um, and you know, ultimately payouts are um, payouts of batch orders by the date they were captured, not ordered. So payout for say October 20th may contain orders from October 16th to October 18th. Not, um, everyone is getting paid at the same time because if they did, that would probably, um, crash the, you know, the systems. Even though they're working at a massive scale. Someone like Amazon is paying out tens of millions of sellers on any given day and they can't pay out, for example, everyone at the same time. And so sometimes what happens is orders from the previous period or for, you know, um, on both ends of the end of a payout period, there could be some orders that are missed in that payout and they land with the next one. That causes confusion and um, ultimately leads to these, uh, sort of discrepancies or perceived discrepancies. Now another reason is fees deducted before the payout. So Shopify payments processing fees, um, effectively a percentage plus a fixed amount per transaction are taken out before the money hits the bank account. So payout totals are always lower than the gross sales amount. Um then on top of that with Shopify in particular you have the flexibility of enabling multiple payment processes and payment gateways at checkouts. And all of these, uh, all of the sales might not go through Shopify payments. So this is at the discretion of the end clients going through the checkout process or PayPal, Afterpay, Klarna, etc. Um, any gift cards that might have been used, manual payments, third party gateways, etc, that are not going through Shopify. These also would include the different fee schedule, a different fee, um, percentage. There will also be uh, be paying you out uh, at different intervals at different times. So right, effectively you're now juggling as uh, soon as you expand beyond your Shopify payments or standard processor, um, you, you now need to account for additional timelines, additional formats of the data, etc. Etc. And it's very easy to get lost in, in you know the details here. So um, so that's a few of the reasons. And last, uh, but not least is of course refunds, um, chargebacks, adjustments. Right. So a refund can reduce a later payout rather than reversing the original sale reserves or hold on the account can delay part of the payout. So again what you expect is not what you see. Um, Amazon is uh, one to mention here. With deferred transactions they basically delay a payout until, and that's by design seven days after the delivery date. So if your delivery for whatever reason is late, um, say one of the fulfillment partners you might be using is, you know, um, has delays on their way. Um, that means that guaranteed you would receive the payout much later than expected. Um, taxes and shipping. For example, sales reports can be configured to show net sales excluding tax and shipping, while payouts include everything the customer actually paid. And now where it gets really interesting is you only receive one amount in your bank account. And the challenge is going like going and figuring out why is the amount the amount it is what specifically happened between the sales and the payouts. And this is where a uh, tool like Link my books can really help.

Speaker A: Yeah, I love the audit trail part of it too. I think that's incredibly important. And just the education component and talking about the timeline and I see this happening a lot. You're right. When an order is created, let's say in one month, but the payout is in another month. And like if you literally are closing your books, uh, on a monthly basis and then it's almost like an accounting principle where you have to make a decision, are we calling revenue the date of order or are we calling revenue the date of capture the money? Um, or is it revenue, or is it only revenue when it hits your bank account? Like, I'll give you an example. This happens a lot. Like if PayPal, let's say for example, is a method of payment. Now most people use Shopify payments, that's true, but a lot of people select the uh, uh, a different accelerated checkout. It could be Apple Pay, it could be PayPal. And so let's say you click PayPal. What a lot of brands do is they don't sweep the money that's in the PayPal account out every single day. And to surgically match an order to a PayPal transaction and have it surgically deposit into their bank account, a lot of times they wait for 500 bucks, thousand bucks, and they just do one big massive sweep. I don't know the audit trail that goes along with all the transactions that justify the sweep. It's the same thing with Shopify. I mean, Shopify does a very similar thing where they say, okay, well, you know, if you're on a plan where you're getting every day or every second day you're getting payouts, yeah, there's going to be a summary in a big chunk, but then I'm not sure how detailed. And that's where Link my books comes in, was that, you know, they're going to be detailed audits about. Okay, well here's what physically happened from transaction to money in your bank account and can justify everything. Right. This is the problem that I see people having with PayPal is. And sometimes they forget to sweep in the month where the orders were created and settled and shipped, but they're collecting the money in the next month. Well then, so then, uh, are there a cost of goods sold in a different month? Like you took the inventory out over here, but now you're, now you're getting paid for in another month. Like how does. And uh, you understand, like the complexity that can happen from pre orders or ordering into delayed capturing to fulfillment. It's such an interesting cluster, right?

Speaker B: It is, it is. Um, and I hear those challenges on practically a daily basis. And you know, if we are to apply, you know, um, accounting standards, uh, whether it's ifrs or, um, Gap or others. Right. Revenue is recognized when you fulfilled your obligation to the customer by definition, not when you get paid. Um, for most e commerce stores, that's effectively the order date or the shipment Dates, if you want to be strict. Um, so shopify zone sales report reports work this way. Um, the problem is that you know, the, the money would always arrive at a later date.

Speaker A: Correct.

Speaker B: And you know, um, once it arrives in your bank, you know, this is basically settling an amount that you've already technically earned. Um, and this is where it gets quite tricky because um, with um, that natural delay to be expected, um, it's almost, it's almost like an accruals basis of uh, accounting for yourselves. Even though it's not an accruals sale per se. There's no invoice, there's no payment terms. Um, the sale has happened at checkouts. The money has been transferred by the client. The question is when does the merchant receive it? And this creates this new uh, reality almost, which is neither accruals nor cash. It's almost dealing with both at the same time. Um, and of course that can be slightly tricky to get your head around. Um, to your point of how do you close the month on time, what you take into consideration, um, etc. So again, something that um, you know, we, we certainly help with, um, by, especially when it comes to a uh, end of month payout that covers both, uh, that covers two months. Um, we automatically would split that settlement payout summary that we've generated and carry a balance forward. So every revenue and expense line item goes in the right month, um, allowing you to obviously close the month accurately and not misstate your P L. So we have those measures in place and um, the same applies for say Amazon's deferred transactions, uh, which is a big pain point from an accounting perspective. Uh, your, your deposits never match any of the reports you're looking at. Literally none of the reports match. And so merchants and their accounts spend a lot of time, hours every month trying to, you know, clarify what exactly has happened. Which month should I associate these um, you know, figures, uh, figures with. So uh, again something we do is automatically produce adjustment entries based on the released and deferred amounts month on month. So uh, any point in time throughout the year, you can ensure that you're not misstating your P L. So even if it's for, you know, compliance purposes or for internal decision making purposes or to satisfy investors, uh, interest in the business, um, you know, clean data is, is absolutely critical. And um. Yeah,

Speaker A: so I want to talk about the. Yeah, no, and thank you for sharing that. I, you know, I did some research on this. What I find interesting though is that it's not just a shopify problem. Um, And I think your solution um, helps with the education and making some proper decisions. I think the problem is with not having proper financial hygiene and being able to make proper decisions I think is critical for a business. And I think that's where your solution fits in, where you're connecting not just the Shopify store but um, you're also, if you're an Amazon seller, which most brands are, at least part of their catalog is going to be on Amazon just for you know, brand building purposes and just the organic reach that Amazon has. Um, but there are people that are listening that are probably Etsy sellers or they're on Walmart. I mean Walmart Marketplace is even a sponsor of this show. It's like you know that's, that's a, the massive baked in audience. Even TikTok now is, you know, it's just massively blowing up for Gen Z's, um, and young and young millennials and it's, it's such an interesting way. Um, and so I guess my question back to you is that you know, you've been very intentional, you know, with LinkMyBooks is saying there's the Shopify problem with you know, in trying to understand the financial data, but you're also really intentional on these connected marketplaces too because I think that's the problem that that's out there right now is that there's a disparity in having a source of truth, financial truth, uh, of these marketplaces and Shopify. And then because sometimes you want to pause for a moment and go, okay, well how's my TikTok shop doing right now and do I need make any changes or you know, margin things or pricing changes. And the thing was it's hard to get your head wrapped around the financial side other than just going into each platform specifically, um, where you have a different methodology around bringing in these channels and then helping you know, organize it and then making better decisions.

Speaker B: Yeah, that's a, that's a very, very good question, uh, and point that you're making Steve. And then ultimately with um, multi platform sellers which is uh, sort of the um, you know, the type of merchant where you know that they see the most value in using a tool like Link my books. Um, I'll give you an example of a, ah, client I was uh, recently working with through their accountant and um, they were doing some really good numbers on Amazon but they weren't monitoring the advertising costs. So even though they were doing five digits, sometimes six digits in sales with every payout, they still owed Amazon money, which I Found absolutely mind blowing because if you are making 50 to 100k every 2 weeks, surely you're making some profit on that. Not only were they not making profit with every payout, they actually owed Amazon money. Um, and they weren't tracking the advertising costs. So then quick question. After they got plugged into Link My books, we pulled three months of their data is something that we do by default. Um, their accountant wasn't aware of that and I said okay, so here's like an actionable insight for you. You need to address the advertising spend. It's out of control. Um, they're not making anywhere close to the type of revenue they should be making to justify these advertising expenses. And this is ah, one example where um, you know, the insights from the data, ah, uncovering patterns and uncovering um, the reason behind um, you know, if you just, if you're just looking at your sales data, you're not looking at um, the advertising spend. If you're just looking at what's come in the bank, you'll be shocked to see that you actually owe money. Even though you've done, you know, thousands of orders and you know, captured 50, 60, 70,000, um, US dollars in, you know, for two week periods. Refunds, um, is another one that really can impact, you know, the operations. And typically what ends up happening is, you know, um, unless you're tracking the patterns, if there's, if there's um, an increase in refunds, you have to be looking at what is the specific product causing refunds. Maybe it's a faulty product, maybe I should pull this product. You know, it's that something off the back of accounting, you know, data. You're now starting to make better decisions. And that's why all these things broken down into granular line item categories for all your sales, all your fees and not just bundling all your fees, splitting fees into FBA fees, digital um, services fees, commissions, affiliate commissions for TikTok for example, you name it, right? It's, it's, it's so, so important to have that granite of view. Um, so instead of you know, basing it just on, you know, very retrospective analysis, once the problem has really become uh, large enough to, you know, seeing the data come in on a more regular basis, split according to the right type of categories, it's critical.

Speaker A: So it sounds like uh, link my books. It doesn't uh, just save like time, like hours. It actually shows you where your profit is actually going by channel. So you can figure that out. Um, and then you know, you or your accountant, I Guess can figure out what to do about it. I guess is a, is probably the next steps because if it's broken out by channel, you can organize it like in this particular case. Holy smokes. Negative margin from Amazon. That's insane. Right?

Speaker B: Yeah, yeah. I mean imagine uh, owing Amazon uh, free 4000 on one payout and then the next one is two and a half thousand that you owe them. You've already made sales of more than a hundred thousand, yet you still owe them money. It's almost unbelievable. Um, and I think that's where you know, having, having that, you know, um, visibility makes a massive difference. And to your point, um, accountants want clean data. Uh, they're not going to key in manual, you know, uh, sales in Excel from you know, a uh, report that they've received from their client that will typically sit with the bookkeeper.

Speaker A: Right.

Speaker B: Um, but in order for the bookkeeper to you know, move to the next level of what they do for a client, they need to free up their time. And so now we go from the merchant never has to export anything. The bookkeeper stops doing very low value added work and starts, you know, upskilling the accountant on the other end is receiving clean data that they can actually uh, you know, um, do some advisory work on.

Speaker A: Yeah.

Speaker B: So, so it's, it's, it's quite transformational when you look at it from that perspective. Although a very focused and simple, not simple to build and by all means is uh, on a daily basis I discover how complex I can actually the whole product is. But it's made to look so simple that you're almost sitting there thinking hold on, like what am I missing here? And um, and this is when you know, it's, it's, it's a highly focused, highly niche but highly effective product.

Speaker A: Yeah. What's interesting, you know, you think about like, like, you know, and this is like on top of my mind right now is just like where does like the software's job end doing what it needs to do, like my books, it does something and then like. But then where does the accountants job fit in? Because sometimes and it gets expensive to have an accountant versus a bookkeeper and a lot of times you, and you would think that Maybe you know, QuickBooks would, would do like the daily ledger and like, and so there's going to be some journal entries and things that just can happen on their own. But that's just more like table stakes of just getting the financial, you know, these, these line items put in there and then whatever your expenses are separate. You Know, fixed expenses and one offs and stuff. But I'm just curious about the software's job when it ends. Like what is it giving to the account? I guess I'm trying to make this seems warm and fuzzy here, like are you really helping the account to do as you say, maybe high level tasks instead of like low level tasks?

Speaker B: It's a very, very good question actually. And I wonder sometimes, um, in this particular sector, right, dealing with financial data, ah, on software there's such a, of blurry line between we're talking about the software and functionality and now we're talking about tax. In the tax code this line gets blurred all the time and you know, we always have to lead with a uh, bit of a disclaimer that from my end, you know, I'm not a tax advisor, but we're talking about tax. Fair enough. But I cannot advise you on what is the right way to do your tax. That's you know, so, so you see there's a fine line and I think to your question, right, in this particular space, financial technology for accounting and tax, uh, there's a fine line between where the software functionality ends and where the job of a qualified CPA begins. Right,

Speaker A: right.

Speaker B: Um, and the two things that intertwines because even when you do um, like a simple action of mapping line items the right way and applying the right tax mapping, so many qualified finance and accounting people could get it wrong. Getting one or two tax mappings, for example from a European tax perspective could um, mean that over time you're overpaying on value added tax. And we did have a few uh, such merchants in the last months. Um, they were simply, you know, made a very small simple mistake that over time and over an increasing volume uh, of sales had ballooned to overpaying in the range of 40,50,000 in tax, which now they have to go and claim uh, back. Uh, so they wouldn't have been able to do that unless the, you know, the model hadn't been challenged by say link my books in our um, you know, tool because that gave them the clarity, it sort of challenged them to reconsider how they're mapping certain, in particular it was a question of mapping um, Amazon fees and which entity actually invoices them for those fees, whether it's a entity based in the UK where they were registered for tax purposes or whether it's a Luxembourg entity, which is, is what Amazon uses for transfer pricing, you see.

Speaker A: So

Speaker B: it's, it's from such a small mistake, you know, um, they uncovered 50,000 of overpaid um, VAT, which is, you know, it's mind blowing considering how simple and small this error is. But what, how big the impact can be to the business and the cash flow and the bottom line and everything else.

Speaker A: Ask a question about uh, how AI fits into a lot of this because I think it's on a lot of merchants mind. A lot of people use other ChatGPT or Claude a lot of times it's a little bit of their source of truth for a lot of things. And they're using these MCP connections now to certain tools for doing certain things. Um, is there ah, um, an MCP server for link my books? Um, and then, and if there is, I don't know if it's, if it's early days now for that because, uh, Because I guess the thing was it's interesting where some people just like um, the chat solution. Once you get everything connected, then in natural language you can ask the right, the right questions. Even though you know the pipes are set up correctly in the background, you can still query directly from Claude, um, to your tool of choice. I'm just curious what your, what the current lay of the land is for. Link my books and then maybe what you see the future of AI.

Speaker B: Yeah. And ah, we're, we're getting a lot more questions uh, around that. And um, you know, clients um, that we work with are sharing. Um, like literally a couple weeks ago I spoke to a merchant that's building their own mini ERP system and as part of this they needed um, you know, our connectors. Um, and you know, to your point, I mean AI is so prevalent now and increasingly prevailing that um, just just being able to ask a question about your books, ask a question about your refunds, etc. Is, is definitely um, definitely saves a lot of digging and making sense of data.

Speaker A: Yeah, yeah,

Speaker B: going backwarding

Speaker A: and stuff. Yeah,

Speaker B: exactly. Going back to the, to the merchant, uh, expertise versus the accountant's expertise. We can look at the same balance sheet but see completely different things. Um, if you don't know financial ratios, if you don't know the regulations, if you don't know what you can classify as a business expense versus not you could, you could make mistakes and those mistakes are always punished by, by the, by the regulators and, and the revenue service. They're the absolute ruthless. There's no, you know, one strike rule. There's nothing like that. You made a mistake. Fine. That's it gang. End of, end of discussion. And um, we are working on an MCP very early stage I don't want to um, obviously uh, from a commercial perspective sell the uh, sell the product roadmap.

Speaker A: It's an alpha or beta right now I guess.

Speaker B: Um, no, no, it's only internal. We're in the very early innings of testing this. Um, all our like our product is hard coded. The reason for that is um, you know models have massively improved this year. But that wasn't the case last year. Last year when I was working with AI, it wasn't as good as is today. It's almost a different tool and I think where it's all going next year in terms of accuracy and you know being able to trust the output.

Speaker A: Right.

Speaker B: Is going to be a different reality altogether. So

Speaker A: yeah,

Speaker B: um, for now hard coded. But we are extremely interested in what this can uh, help us achieve. We, we use AI for various topics internally as a business and also externally for customer support. For example, whenever you contact uh, linkmybooks, we have very um, well trained bot, um, called Neo that helps to answer and by the way something worth mentioning in terms of statistics, um, three quarters of questions are answered correctly and this is off the back of surveys from clients who have interacted with Neo. So when I joined this business um, just over a year ago that metric was under 50%. So, so it's a, you know, it's interesting to see how far we can, we can push this um, to give everyone almost an assistant within the product. And to your point as well, those connections to your um, operative brain, you know, whether it's chat, GPT, whether it's Claude, where it's anything, anything else that you might be using, um, to be able to pull data, make sense, you know, of, of, of various tools that you might be using. Um, you know, in my experience working in this industry for like close to nine years now, financial um, technology, there's not a single company that solves it all right, uh, you know, without, without you know, saying any, anything negative about um, other ecosystem, um, you know, companies. But you know, even someone like Intuit, you know, massive company, NASDAQ list had been around for years, practically invented accounting software back in the 80s

Speaker A: and

Speaker B: I had the pleasure of working uh, working at QuickBooks for, for a few years. Um, but they for example do not do what we do and they do offer a connector which you know as of late has not produced amazing results and that's driving a lot of business our way. Um, and so you know, if a company like Intuit with that scale can't fix the problem, um, the name of the game is around integrations with integrations as we know are painful. You might choose the wrong products or lots of organizations might um, choose a product at a given time but then after team changes or technology changes, those products are no longer fit like a good fit together. Um, and so then back to square one. Evaluations, demos, trials, etc. And then making them work together. I think this is the true power of AI is to connect those dots in a more seamless way possible without having deep engineering know how. Um, and I think this is going to make a massive difference um, to all e commerce sellers looking through all sorts of tools to do their business. You know from inventory management, you know, pricing, fulfillments, accounting, et cetera, you name it.

Speaker A: Yeah, it's amazing, I know that. Just, just more of a side note for those that are listening, um, even if there's not a go to market MCP uh, yet, which is a lot of businesses, you know, and tools and things don't have it yet, but it's on their roadmap just because these, these frontier models, as I agree with you, especially like Opus in the Claude, you know, this 5.5 model right now is absolutely like mind blowing for so many reasons. Um, but what's interesting is Claude with their Chrome connection, which is quite interesting where giving it authorization on certain platforms. So it could literally be the Link My books app. Um, in a logged in Chrome experience you could still query um, the solution and it will learn by taking screenshots and clicking around and then start training itself about, well, how do I pull the data out of the platform instead of doing it manually? I can, I can in natural language ask the question about, hey you know what, whatever the financial question might be that you're trying to figure out what's going on in my TikTok shop for last week. Can you, can you please give me a summary of X, Y and Z? An MCP would already have an API connection and could pull the data points and share it back. But since that's not available, the Chrome connection could still click around and figure out how to do it, um, and share back the data by scraping in real time through a Chrome browser. So something to throw out there as an option, right, for those that are listening.

Speaker B: Um, yeah, I say the biggest challenge in getting the product up to um, you know, day, um, it takes a really long time to be even allowed um, to pull data from Amazon and Amazon or Shopify or any of the connectors that we have, TikTok shop, Walmart, um, those relationships and you know, uh, being allowed to connect to the APIs. We also need to go through auditing processes every year with Xero, with QuickBooks. And I was speaking to a gentleman at an event recently that said oh, with Claude I can build your product in two days. I said honestly, good luck with that and I'd love to see what you build. It takes, it takes a really long time to bring a robust, accurate integration to market. Um, the latest one we're super excited to bring to market by the end of this year will be one with temu. It's taken a really long time and I've witnessed that process with obviously not being um, involved myself uh, but, but knowing how much work goes into it. Um from the perspective of our product team and um, accountants that we work with to validate everything has to be when the business data accuracy we cannot allow um hallucinations or 95% accurate. It has to be 100% accurate. So it's quite complicated. Um, I suspect part of um, it's going to be a case of I guess format wars right. For, for so long you couldn't charge your iPhone with a, with a Samsung chargers which is ridiculous.

Speaker A: Yeah.

Speaker B: And you know you had to have ah, someone like the European ah Union mandating this through heavy bureaucracy and whatnot. Forcing every country. Yeah, yeah, exactly, exactly. For example. Yeah, precisely. And um, I suspect that a lot of, a lot of companies firewall access to their data so they don't make it. It will be amazing if you can just go and crawl Amazon or allow some agent into their shop uh, into your seller central and then it makes sense of everything that that'll probably be a dream come true for many sellers if you can have an agent following you and everywhere and just getting that data. But I suspect Amazon will be happy about that. Shopify might not allow it. Ebay might not allow it. So let's see where things go. But I think they are definitely a very interesting um future for us and for the industry. Um, AI is definitely revolutionizing that as well as with any other

Speaker A: so interesting these personal agents and stuff like Metamuse and stuff. And I know there's you know ChatGPT's got their dots and there's Grokbot and I think even Duet just came out or at least on preview now for uh, people in the anthropic cloud world. But it's so funny when you hear the story about Metamuse, uh, or Amazon um, blocking uh, that bot from going to their site and making purchases on behalf of uh, the agent. It's so interesting wars that are happening right now.

Speaker B: Elon Musk was uh, tweeting that, uh, uh, or should I say Xing? Uh, he was tweeting, ah, that. Or maybe we should, should start a competitor, uh, of Amazon, which by the way. Yeah, absolutely. Competition always benefits, um, then consumers. So uh, I welcome it. Although I, you know, I think Amazon's built, uh,

Speaker A: yeah,

Speaker B: it's, it's nothing short of incredible. Um, but yeah, I think more, more competition is always welcome. And uh, yeah, that's, that's a little bit of a preview of. Yeah, okay. Or in theory it's possible, but in practice it won't be. And I'm sure they're going to firewall it, block it and encourage um, everyone to use their MCP or their AI or their Frontier model, etc. So

Speaker A: yeah, Rufus, or whatever they call

Speaker B: it.

Speaker A: All right, so just before we wrap up, I just, I want to, I uh, guess put a lay the land here. Um, who gets the best value from your opinion, because you talk to a lot of merchants, both from the complexity and from a GMV perspective. Um, who gets the best value out of. Link my books today.

Speaker B: Uh, well, I would say, um, basically anyone who needs to solve the mess of E commerce bookkeeping. So anyone selling on either one sales channel and in most cases the best value is on multiple sales channels, say on Amazon Shopify or having multiple Shopify stores, multiple Etsy's, um, you know, merchants is the biggest group of clients that we, we service, but equally the bookkeepers and accountants that then offer them services. Um, so these are broadly speaking the two groups. And you know, and just to summarize, I guess at the end of, um, towards the end of our discussion today, um, what is the problem that we solve? Right,

Speaker A: yeah,

Speaker B: so we basically solved the mess of bookkeeping, uh, for E commerce sellers. Anyone selling on multiple platforms, uh, is always wondering. The money that lands in their bank account is a lump sum of payouts. The bundle to get hundreds of individual orders which on their end have sales refunds, marketplace fees, shipping charges, tax, you know, various tax rates under each scenario, whether you're um, exporting or whether you're doing domestic sales, etc. That, that would play into it. And effectively instead of manually unpicking, um, you know, all of those deposits received in a different format from, from different channels at different times of the month, um, and manually reconciling those payouts, um, we help automate that aspect of things. So no longer having to download reports, checking invoices received, uh, for various services Say advertising or um, FBA on Amazon etc. Just to give a few examples. Um, all of this now becomes streamlined where you get clean entries that match to the penny, the deposit amount received. So all of a sudden you've gone from spending anywhere and this is based on literally our clients telling us these numbers. Anywhere between six to ten hours a month per channel, right. To all of a sudden having full automation. All you need to do is then start running your reports, just update your P and L refresh, refresh and everything goes there automatically with audit files to back it in case, um, in case the, the IRS or HMRC in the UK have any questions.

Speaker A: Right.

Speaker B: Um, so yeah, in practice to summarize reconciliation, um, so each payout matches um, a single entry. We generate tax accuracy. So whether it's VAT or sales tax on sales refunds and fees categorized properly, um, multi channel visibility. Being able to compare your sales and your profit margins, um, you know, between Walmart, TikTok, Shop and Shopify in one glance using our analytics feature, um, and very importantly tracking you know, cost of goods sold to clarify profit margins across all these channels. Um, and all of this working in the background seamlessly, um, is sort of, yeah, the value proposition. The second group briefly is bookkeepers and accountants. Yeah, as I mentioned, something we hear all the time, um, bookkeepers and accountants do not favor E commerce clients. The reason being not because there's not money to be made. The problem is it's too manual, it's too confusing. They need to know very well how Amazon, TikTok, uh, Walmart operate. They need to be able to navigate these systems as well to understand the timings, formats and the traditional accountant, who's extremely knowledgeable in accounting and tax and the fundamentals of their line of work, their trade, isn't familiar with E Commerce. And to, to your going back to the question you asked me in the beginning what got me into E commerce and it's, it's actually a difficult question to necessarily answer. Um, but I stumbled upon you know, QuickBooks, uh, as a, you know, I had an old colleague that brought me into the, into the team, um, you know, reached out, said like I think you're going to love the company. And I did. Um, but I had never worked with financial accounting software before. Um, it definitely wasn't my favorite subject at university. So, um, you know, how I ended up working with accountants for you know, five, six years of my career on a daily basis. And it got to a point where they were asking me post Brexit, how should I do this, how should I do that? But how do you categorize it, how do you map it? Um, so it's interesting, um, get to say that as part of this journey, um, you can conclude that um, there's expertise in one field. Um, but the modern reality requires you to have expertise in multiple fields at the same time. So you could be an accountant. But a lot of the accountants I worked with had to know how to set up software, how to integrate software packages, um, how to be flexible with their clients. If for example they get a client that uses Link My books, but another one uses spreadsheet, but another one uses something else, um, they need to be able to service all. And the easy solution for any bookkeeper, accountant when they get a new e commerce client is to say, do you know what, I don't have the capacity, I can't take you on. Um, once they see our newly released accountant, uh, portal, um, this gives them the level of confidence to then start doubling down on these type of clients. So we've gone from refusing business to now actively pursuing these type of clients. So broadly speaking, two categories but a very different reason. Um, to use Link My Books on one end is to focus on the operational work you do as an owner, entrepreneur and merchant. On the other end is, um, to grow your practice as an advisor or bookkeeper or an accountant. Um, you need the right tooling in place to scale your expertise. You know, so otherwise you're back to doing, you know, pen and paper books and you, you're not going to be able to handle 20 clients. You have one or two max. Yeah, so

Speaker A: I really thought about that. That's a really good point you made about that because I uh, my main thought of having you on today was like the benefits for the merchant and then giving nice clean records, uh, and then high level, uh, work to your accountant. But then on the flip side though, it's no, there's, there's the accountants, the tens of thousands, if not hundreds of thousands of potential, uh, accountants that are wanting to or are currently doing e commerce businesses as a large book of clients they have. Um, it sounds like this is an interesting connection for them to make their jobs better, um, and more impactful for their book. Right? So it's interesting

Speaker B: that's what it is because um, of course when you hear automate the bookkeeping, what does that mean for the bookkeeper? And you know, that's a conversation and a question that we get all the time. But what that means for the bookkeeper is you start adding value beyond the mechanical work, you start adding value in other ways by learning how to read the data. And ultimately that's the journey of a bookkeeper. I know bookkeeper wants to remain a bookkeeper all their career, potentially. They want to move into, move up the ladder, right in this career. Career, um, this career ladder in particular, get qualified as cpa, start working bigger accounts, start filing annual accounts, um, you know, deal with more, I suppose, more rewarding and interesting problem solving. Um, so I think that's the angle there. And obviously on the merchant side, they don't want to be paying anyone per hour to do manual work. That's, that's a sunk cost. So you want to channel these funds into getting actual proper advisory, consulting, um, support from your accountant to read the numbers actually. And so, so it's, it's, it's sort of a win win if you look at it from that perspective.

Speaker A: Yeah, it's amazing. Now I know we chatted before recording today, and I understand you have a, um, a little, little bonus or a promotion for those that are listening. I know the pricing is so incredibly affordable as it is. I went to the website this morning and just entering approximately number of orders per month, uh, and how many channels that you currently sell across. Um, and then pricing comes up and um, it's, it's very affordable and there is a free trial. But I'll pass the torch back to you. Um, what do you want to offer those that are listening today?

Speaker B: Thank you, Steve. Uh, it has been great talking to you first and foremost and thank you for having me on the show. Um, so, uh, absolutely, for anyone listening, um, we're here to help, um, whether it's uh, just to have a quick conversation to, to better understand your business and um, tell you, you know, how Link my books can work for you. We offer a free trial on the website. Um, quite simply, go on to linkmybooks.com click on the blue button that says free trial.

Speaker A: Yeah,

Speaker B: and as part of um, those listening, we have a special offer, um, using the fast, uh, lane discount voucher that you'll be able to spot somewhere on the page. Uh, um, we would also offer a extended 30, uh, day trial. Typically we offer 14 days. And um, if you reach out to us and you know, you're one of uh, Steve's, uh, listeners and followers, um, we'll make sure to, to also uh, offer a free onboarding call to make sure that everything is set up, uh, on your account and um, share some best practices, um, from other merchants that we work with. So uh, yeah,

Speaker A: that's amazing.

Speaker B: Looking forward to meeting, meeting some of you. Yeah,

Speaker A: this is lovely.

Speaker B: In the coming weeks,

Speaker A: a lot longer than I typically record. But I tell you something, I think it's, it's like financial health and profitability and the multi channel world that we're in right now. Um, I think having financial clarity more than just syncing to QuickBooks and dealing with it once a month, uh, and, or just only looking in the Shopify admin, uh, for, you know, for profitability, that's not the way to do it. I think, you know, for a very small amount of money. Connecting over to link my books right now with either your Xero account or your QuickBooks account. Uh, I think you're, you're setting up for success in your multi channel world and knowing all the things that you guys do, um, and setting nice clean records and things over to your accountant, I think is, uh, is amazing. So I just wanted to thank you, number one, for coming on the show today. I really do appreciate it. I learned a lot. I'm on like literally a month. You can't see the camera's off, but I got, I got page two of notes. Uh, and so I've taken for a dry topic of like, of financial and accounting things. Uh, I've taken a lot of notes. So it clearly was impactful for me. And I'm hoping that my listeners, everybody listening today, hopefully you get some value out of this also. And yeah, thanks Stefan, for recording today.

Speaker B: I hope your audience sees value or hears value in this case. And, uh, thank you very much for making me part of the show. It's been a pleasure.

Speaker A: All right,

Speaker B: thank you, Steve.

Speaker A: All right, take care. Well, that's it for today's episode. I'd like to thank you personally for being a loyal listener of E Commerce Fastlane. It's my hope that this podcast is offering you a ton of value through growth strategies, tactics and exclusive insider tune tips on the best Shopify apps and marketing platforms, all with my personal goal to help you build, manage, grow and scale a, uh, successful and thriving company powered by Shopify. Thanks for investing some time today and listening to the show. I'm so proud and excited that you have a growth mindset and are a constant learner. I truly appreciate you and your entrepreneurial journey. Enjoy the rest of the week and keep thriving with Shopify.