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The People Gardener Podcast with Rhonda Delaney
The People Gardener Podcast with Rhonda Delaney
Unleash The Power Of Xero and Hubdoc! with Serena Shoup
Can your small business afford to miss out on the financial tools that could save you time and money? Join us for an insightful conversation with Serena Shoup, an accomplished CPA turned small business owner, as she breaks down her top recommendations for small business finance management. Serena takes us through the benefits of using Relay, an online banking platform that supports the Profit First methodology, and shows how it seamlessly integrates with popular accounting software like QuickBooks and Xero. Learn why separating your business and personal finances is crucial and how Relay's features can simplify team spending management, providing practical solutions for every small business owner.
Ever wondered which accounting software offers the best control mechanisms? In this episode, we explore the critical importance of audit trails and user access controls by comparing Xero and QuickBooks Online. Serena shares how Xero’s inability to delete transactions enhances security and oversight, making it a preferred choice for security-conscious business owners. She also delves into the advantages of integrating Google Drive, Xero, and HubDoc to streamline your bookkeeping and document management. From setting up these systems quickly to the benefits of outsourcing bookkeeping tasks, this episode is packed with actionable steps to help you stay organized and maintain peace of mind with your small business finances. Tune in and discover how modern tools can transform your financial processes, making your business run smoother and more efficiently.
https://relayfi.com/?referralcode=ShoupCPA
https://www.xero.com/us/
https://www.hubdoc.com/
ofcoursebookkeeping.com
Serena Shoup | Owner
Of Course Bookkeeping
760.440.5102
Well, hey there. Welcome to the People Gardener podcast. I'm Rhonda Delaney, your host, also known as the People Gardener, Thrilled to put this podcast together to help small business owners, new business owners, frustrated business owners and aspiring leaders, whether they're inside business or outside. Each week, we bring you some actionable steps so that you can actually improve your skill as a leader. That's what we're about. We're here to help you become a better leader by giving you access to lots of different perspectives. By giving you access to lots of different perspectives. The guests are varied. We're thrilled to have them. Get out your pen, get out your paper and be ready to learn Every single episode. You're going to be able to take something away that you can implement. Are you ready? Let's get to work. Publish deck. Well, hey there. Welcome back to the People Gardener podcast. Happy to have you here.
Speaker 1:This week I have returning guest Serena Shoup. She is an accountant, a CPA turned small business owner. She also serves the course creators and coaching community with an accounting, and then she mentors bookkeepers. I reached out to her and asked her if there were any tools that she uses or recommends for small business owners, and so she has decided to come and talk to us about three different ones, which is exciting A couple in the finance arena and then other relay is a banking online banking. So it's a banking thing. So, okay, darling, let's, let's have it. What do you got?
Speaker 2:Thank you for having me once again. It's always fun to come back and chat with you. So, yeah, the the three, I guess software programs or tech platforms, I guess is more appropriate. These days, everything's on the cloud, so we'll just call them platforms. The three that I want to talk about are all related to small business finance, so I thought it would be appropriate. So I guess I'll start with the banking platform, actually, because in order to send and receive money and make money, you have to have somewhere to put it all.
Speaker 2:Like Rhonda said, I work mainly with online entrepreneurs and so a lot of my clients don't transact cash, so it's okay to use an online banking platform where you don't need to go into a branch or anything, and it's been really, really efficient for them. A lot of my clients use a system called Profit First. I don't know if you've heard of that book, but this bank is a Profit First partner, so it's very friendly with opening up multiple bank accounts and they don't charge you. It's really an online interface and they have a real bank backing them with FDIC insurance and all of that. So, yeah, what I love about this platform is you can literally open a bank account within five minutes if you have all of your business documents. They now also have savings account with interest bearing, and they're starting to offer credit cards as well. We set up all of our clients on Relay, especially if they're not happy with their current bank. I use Relay for both of my businesses for my bookkeeping business and for my coaching business and it's free too, so that's always great.
Speaker 1:Wow, that's huge, especially when you're constantly dinged with fees.
Speaker 2:So it's especially impactful for those clients that do want to have multiple bank accounts to kind of divvy up their money. So you know, profit versus sort of like the envelope budgeting method. So that's what I follow, that's what a lot of my clients follow, and it's just really nice to have a bank that's friendly with that and it's so easy to open new bank accounts. It's easy to set up debit cards for your team and spending limits and things like that as well if you have a bigger team. And then our favorite part of it is that it directly integrates with our accounting software. So it directly integrates with zero and quickbooks, meaning all of the transactions come in through the feed, and so I've never had really any issue with that feed breaking and having to reset it. So that's a huge plus for us.
Speaker 1:So when you say integrate, you're talking about all of the transactions that happen in Relay Can be pulled into, or do they automatically go into?
Speaker 2:They automatically go into once you've linked your bank account to QuickBooks or.
Speaker 1:Xero.
Speaker 2:Yeah, so all your transactions are already there and then you just have to categorize them appropriately within your software. So, yeah, that's one of our favorite parts, and when we set up our clients on Relay, or if they're already on Relay, we can invite them into our portal, basically, so we can see a list of all of our clients on Relay and easily access bank statements to do all of our reconciliations and all the nerdy stuff that we like to do. But, yeah, it's been really awesome to have that at our fingertips and to have that as a resource, because a lot of clients come to us not thrilled about their banking relationship or the fees that they're paying, and, yeah, it's really nice to be able to facilitate that.
Speaker 1:So, that's number one. It's one of the admin tasks that are for most small business owners. They're most unfamiliar with like accounting, bookkeeping. That's just not where they live, so to have something that can take the load off them is amazing. So now, how do people find relay Like? Is it just a website?
Speaker 2:Yeah, it's relayficom, I believe. But I can also share a link in the show notes as well for you to, for you to share you to share.
Speaker 1:Are you an affiliate with them?
Speaker 2:Yes, I am a relay partner, okay.
Speaker 1:Awesome, so people will know that you'll receive some benefit for sharing the information.
Speaker 2:And so why that's important too is I feel like we touched on this on our last podcast we did together, but it always bears repeating because probably new listeners is like, when you set up your business, the first thing that you really should do is open a business bank account to start keeping your business finances separate. And a lot of people are like, well, I'm not making money yet and dah, dah dah. But it's like, even if you're not, just open the account and there's nothing to lose with relay because it's free. So it's not like you're going to be paying a fee, but just open that account, establish that habit of keeping things separate and you'll be off to the races.
Speaker 1:I'm a kind of a lister, a compartmentalizer person, so it makes total sense to me. Well, no stuff is here. My personal stuff is there, and I've been quite happily never to mix the two. But that's how my brain works.
Speaker 2:Yeah, absolutely so. A second ago I talked about it integrating with your accounting software. So that leads me to my second platform, which I prefer zero. A lot of people use QuickBooks online, but what I love about zero is that it actually didn't originate in the U? S and it, but it was the first cloud accounting platform, so it was built for the cloud, Whereas QuickBooks online most people understand and know it started as a desktop software that you put a CD ROM and download it and and all that kind of stuff and you had to wait for updates.
Speaker 2:Well, because of that, the QuickBooks online platform, it started as desktop and they kind of like migrated it to this online thing. So there's functionality that isn't the same and isn't designed the same, but Xero was actually built for the cloud, so that's a really cool aspect of it and so in a lot of ways, it functions a lot better because they had that you know, that end goal in mind to from from the beginning. They weren't trying to just like take something that existed in desktop and then move it to online, and so so, yeah, that's one of the things. The other thing that I really like about it because I came from corporate, I'm huge on controls and making sure that you know certain people don't have access to certain things, and there's always an audit trail. In zero, you cannot delete anything, Whereas in QuickBooks online, you can delete transactions and then end up with a mess because you're like, oh crap, what did I just do? And you can't recover it. So in zero, there's no deleting anything unless it hasn't already been posted, Like it has to have just been in a draft mode anyway, and so it's easy to recreate something that hasn't already hit the system. But there you have to avoid things. So there's always this trail of what has happened, and that's a huge thing for me.
Speaker 2:If you have a team or you have someone that you want to be able to do certain things in your software and not everything like maybe just enter bills or enter invoices, you can have them do that and then require your approval to post it to the system so that you're reviewing things. So I really like that review layer. Xero also allows unlimited users on every plan that they have Wow. So that's a huge thing. And, like I said, it integrates directly with Relay. So does QuickBooks Online. And what are the other features that I really enjoy? Oh, one huge one for online business is it has a direct integration with Kajabi payments if you're on Kajabi and with Stripe, so all of those transactions also feed into Xero if you link those up. And yeah, so we love that because most of our clients are course creators. Yeah, perfect.
Speaker 1:Going back to the controls, I would imagine it's a huge what do I want to say? For business owners to know that, yeah, I need this person to do this and I can actually set up controls, that that's the only thing that they're going to be able to do. They can't be wandering around, they can't be moving this from here to there. That there's comfort in knowing that there's controls. Do you see that as a big thing for minimizing abuse?
Speaker 2:Yeah, and what's interesting is I used to work at a CPA firm and we've worked with clients who have had fraud happen to them and theft basically. But I actually have a current client that has been experiencing some of that from before I came on, and working with us was one of the things that illuminated another issue that was happening. And yeah, but having those separation of duties is another way to say. Controls basically is just making sure that whoever has access to moving money is not the same person who is like overseeing the whole reporting process or reconciling the bank accounts. And these days, especially with online business, it's a little bit different. Right Back, if you're talking about like a brick and mortar business, you have someone that's physically writing the checks and then someone else signs it, and that's how you separate those duties.
Speaker 2:Well, it's a little more difficult in the online business because everything is purchased with a credit card. So in that regard, you have to make sure that A the person that has control of that card number is trustworthy, but then also somebody's reviewing all the transactions that are hitting that card after the fact so that you can catch things. So there's not as much that you can do on the front end for controls as far as making sure that there isn't fraud happening, but you can absolutely mitigate it getting worse by keeping an eye on things, and fraud always starts small, so so, moving to your accounting business, is that something that you work with your clients of setting up those different controls you have recommended, or you know standard operating procedures of hey, we want to get this implemented and you go over.
Speaker 1:Okay, who's going to be doing this, who's doing that?
Speaker 2:Like you are, for a larger business? Absolutely. That's super difficult in a small business when you don't have enough people. So that's where working with someone you know, a firm like us, or even even just doing your own review of your reports every month, is so important. If someone else does have access to a credit card and you're having them purchase software or ads or whatever, you need to be monitoring that. And even if the only thing that you're doing is reviewing the bank statement each month for that card, that's better than nothing. But when you work with like, one of the things that we do with our clients is we look at the monthly reports every month, month to month, and we compare what happened this month versus last month. Does this look normal? Does this spend look a little high? If it does, we flag it for the client and say, hey, this spend was a little higher and most of our clients are doing their own purchasing, so they're like QuickBooks and zero the online experience is better with zero In my humble opinion.
Speaker 1:Exactly Okay, and that's, and that's certainly valid. You're in the trenches, and that's what these episodes are all about People that are actually using these tools.
Speaker 2:Right yeah, cost-wise per year and yeah, so we have zero has plans that start at like $15 a month and then their top tier plan is only like 65 or 70, I think. So that's one of the things that we we extend to our clients is we just cover the subscription because it's the tool that we want to use, and so we just kind of build that into the fee for our client and then by doing that, we kind of get a discount on the subscription as well, because we're managing it.
Speaker 1:Yeah, perfect Makes total sense. I am enough old school I really have trust issues with the whole cloud business thing. I'm a pen and paper gal, right? So yeah, it's been hard for me.
Speaker 2:That, yeah, and I relate to that as well because I started accounting on paper ledgers. I just sent out a newsletter to my bookkeeping community about how I got my start was working for my dad and his HVAC business, but he's the one that started, where I initially learned how to write checks and record things in a ledger when I was 12 years old. So thanks, dad. But to your point about the security of the cloud, that's also one of the things that is important to me and a lot of people kind of just trust the system and I trust the system, but I also make sure I have a backup, and so included with our clients. Is I pay for an additional service? Again, I eat the cost of this, because this is I want everyone to have the peace of mind. Is I pay for a service that automatically backs up all of our clients files so that if something does happen, we have additional copies of it and we can export it? And all is well in the world, hopefully?
Speaker 1:Yeah, awesome, awesome, frame it that way. How easy is it for people that are banking with a brick and mortar or with another online banking to move things to Xero?
Speaker 2:Oh, so yeah, Xero can also pull feeds from pretty much any other bank as well. They just use a. It's not a direct feed. So there's like this third party software that pulls the information and so sometimes those break but you reconnect it and it's totally fine. So, like the big, all the big banks work well, like Wells Fargo, us Bank, I think, pnc you know what I mean. Like the big names, those all integrate. Even smaller credit unions integrate because of the software, a third party that they use. So pretty much virtually any bank will integrate and pull the transactions into Xero.
Speaker 1:It's just not as seamless as Relay, and so is it simply the business owner, some type of form that they-.
Speaker 2:Yeah, so within Xero you just click a button that says connect bank account and then you type in your bank account, it pulls up the login screen and you log into your bank and sync everything and so in general that stays connected. Occasionally, like if the bank changes the formatting of the, the exports or whatever it'll, it might break, or every so often you might have to re-log in to reconnect things. But yeah, it's a very easy process. Also, I have one client that is like do not connect my bank feeds, even though they're available, and so we just log into that client and export the Excel file and then import it into Xero to do our work, and it's not that much more difficult.
Speaker 1:Okay, in my head I was confused with was confused with the zero and the relay and I think I needed to be asking you that question about relay. So you've got this online bank. Now can you easily close out your existing brick and mortar or your existing online and move everything to relay? Is it the same kind of process?
Speaker 2:Oh yeah. So when I first started my business, I was using a personal bank account for a business bank account, which is better than nothing, but I was still keeping it separate right. So this is something that you especially if you're a sole proprietor. It's not a really big deal. It's not until you become like an LLC or some sort of business structure that you do want to make sure you're running your business in a business bank account.
Speaker 2:But at the very beginning of my business I just had a separate personal account at USAA. So when I opened my Relay account, you just basically I can't remember if you actually can, I think I linked the account because you can link accounts and transfer money from Relay to your personal, and I think that's how I did it. But you can also just like ACH yourself and it's a super easy process to just move those funds and fund Relay or vice versa, like when I pay myself. It's just a transfer from Relay to my personal account and it's and it happens within a day or two.
Speaker 1:So Cool, okay, so you were bringing us three, yes, so my last one is HubDoc.
Speaker 2:Yeah, so this is a platform that is now owned by Xero, so it's included when you are a Xero customer. It's called HubDoc and basically what it is is a way to organize all of your receipts and documents that are your proof of all these transactions that are happening in your business, and this is something that the IRS wants you to have proof for all income and expenses. So when we're talking about proof, that's not just the bank statement, it's like receipts from the meals that you purchased, invoices for the contractor that you've hired to do XYZ service. So this is a really great way to keep all of that organized without having to manually like upload things to your Google Drive and rename the files and all that kind of stuff. So, hubdoc, you can just forward emails into yourself.
Speaker 2:You can snap a photo on the app that they have that's what I do when I travel or you can upload a PDF or whatever and just dump it in, and so then HubDoc reads the text on the receipt or invoice or whatever it is and pulls that data from it, so like the date, the amount, the vendor, it files it in a vendor specific folder so you can go in and say, oh, I want to see all the receipts that I have for this one contractor or this one software, and you can just find that folder, pull up everything that you have in there, and then it also pulls the data and you can sync it into Xero or QuickBooks and basically it attaches that document to the transaction in QuickBooks or Xero as well.
Speaker 2:So you've got two places that you have that documentation in case you ever have an audit. And then the third area is this is what we all say I'm big on backing things up and my clients having access to their own stuff too is we also sync it with our clients own Google drives or Dropbox to? Anything that gets uploaded to Hubdoc also gets duplicated in their Google drive, so they they always have access to it and they can find it easily without logging into Hubdoc if they don't want to. Okay, you're mind blown. You're like I don't know what I just listened to lots of stuff turning around in my head.
Speaker 1:Does this now relieve you of the need to hold on to the paper copies so the irs accepts what you uploaded to hubdoc?
Speaker 2:the irs is saying, yeah, we're okay with that as proof of that expenditure or yeah, especially because I don't know if you've ever run into this, but you know receipt paper fades after a couple years unbelievable.
Speaker 2:So the the workaround for that back in the day was to actually make photocopies of all of those receipts and staple them in a file. So I don't do that. I literally, when I'm traveling and I'm at the airport or whatever, eating my meal, I write on the receipt what the travel was for, like oh, I'm on the way to zero con or whatever, and then it's just travel meals. I snap a photo of it and upload it immediately app, and I just leave the receipt there. I don't even try to bother taking it with me. I just that's just the habit that I've created and I try to instill that habit into my clients as well. Like, just immediately take a picture of it and then just wash your hands of it, just make sure it's uploaded, I could get rid of two or three drawers of in the filing cabinet.
Speaker 1:yeah to these receipts for the seven years or 10 years or whatever yeah, seven years.
Speaker 2:Unless you've committed fraud, then there's no statute of limitations oh wow, that's pretty amazing yeah, so, and that's part of the reason why we create so many avenues of backups as well, because we don't want anyone to ever be like thinking that it's in there and then something happens and it disappears. So we link the Google Drive, we also push that transaction into Xero. So it's attached in Xero, it's in HubDoc, it's in Google Drive, so it's in all these multiple places for people.
Speaker 1:But yeah, how long would it take somebody to decide okay, we're going to go with the relay option and we're going to go with Xero and HubDoc. How long for them to gather the information that they're going to need to input and then to actually do it? Ballpark, I'm not going to hold you to it.
Speaker 2:We do these setups for clients all the time.
Speaker 2:If you have all of your documents in one place, like once you hand those documents to us your LLC paperwork, your EIN number pretty much that's mostly what we need.
Speaker 2:We just need those official documents to to know what your official business name is, the EIN, and then I think when you set up Relay you also have to upload like a picture of your driver's license. But if you have all of that handy, you can set up Relay in five minutes and be granted your account within the same day, and then with or maybe even just like 30 minutes, like it happens very quickly unless they need more documentation. And same with Xero, I would say, as long as you have everything handy, you can set all, all of that up as a fresh start within an hour, can set up Xero, hubdoc, all within an hour. Now what comes into play is like how much are we like catching up from back days, right? So if it's like right now we're in June and you want to put everything in from January 2024 until now, well, that's going to take you probably several hours, but it's the setting up the system itself is something that you can do within an hour.
Speaker 1:Right, Wow, that is pretty amazing For me. I'm, I was like you. I did books for my mom and dad in their business, so the whole accounting part of things I know enough to be dangerous. Right, that's how.
Speaker 2:I feel about tax.
Speaker 1:I have an accountant. She does the taxes. I mean, I get to the reconciliation of the bank and the credit card. I hand everything over. But for somebody that isn't familiar and comfortable with bookkeeping and whatnot, this just sounds like it relieves so much pressure and stress. Yeah, that's.
Speaker 2:The other thing is I always am like you know people are like it relieves so much pressure and stress.
Speaker 2:Yeah, that's. The other thing is I always am like. You know people are like could you train me? Could I do this myself? Absolutely, you could do that yourself. If you're going to keep on top of it and if you have the personality and propensity for spreadsheets and numbers, then absolutely you can handle this yourself. If you know yourself and you know that that's not you and you know it's never going to get done and it's just going to stress you out, just outsource it.
Speaker 1:Well, that that's me. I have no problem data entry, I have no problem reconciling the bank and the credit card, but I'm not doing anything else. It's like, yeah, no.
Speaker 2:Yeah, and that's great.
Speaker 1:That's great that you're doing that as well. I don't know how.
Speaker 1:Not interested. I mean the whole nine yards. But yeah, the basic things I'm fine with and I also have enough of a control freak nature in me. I want to know, I want to see, because I want to verify. It's not complicated because there's only two people that have cards, that are doing things, but still you got to verify that the vendor has charged the correct amount, that the PO in that matches, and then you got to go to battle with them that they overcharged you or you know freight was supposed to be included and it's not not. So for me I I feel very comfortable doing that because I want to know, yeah, and I can feel comfortable, that okay, all of this is right and then send it off for them, the accountant, to do whatever the accountant does yeah, puts it into pretty reports and tells you how much money you made and deals with all the taxes and all that kind of stuff.
Speaker 1:Well, awesome these, this is amazing. I hope lots of small business owners happen to fall on to this podcast. Yeah I am going to be posting it on my youtube channel, my podcast youtube channel. To me it's it makes so much sense. The three things together to complete your suite of finance.
Speaker 2:It's a sure way to just make sure everything's organized and above board and you're doing what you're supposed to be doing for the IRS and for your own peace of mind. To be honest, it's the biggest benefit.
Speaker 1:Well, awesome. Thank you so much, Serena, for sharing your info Wonderful.
Speaker 2:Thank you, I appreciate it.
Speaker 1:Okay, that's it for this week, folks. We'll talk to you again next week. Well, thanks for joining me today. Just a quick reminder if you were not on my email list, go to my website, rondadelaneycom, and there's a place there that you can subscribe. And there's a place there that you can subscribe. Keep you up to date on all things people, gardening and leadership. And also a reminder that the Raving Fans Society app is available on the Apple Store and the Google Store. I do have a free membership in there that you'll be able to access some of my material, and then there's also a paid membership, and right now it's $49 a month, and you will receive access to all of my material, all of the teaching content, including a resource library that will really help you along, as well as group coaching every month and then quarterly bringing in guests that will talk on topics that pertain to small business owners and leadership. Thanks again for listening and we'll see you again next week.