The Accounting Podcast

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Michael Card: [00:00:00] Like I mentioned, Crumbl's a very tech forward company and we actually built our own point of sale. Wow. That all the stores use its. It uses Stripe as our merchant processor. Mm hmm. Yeah. We built it ourselves. We.

Blake Oliver: [00:00:13] How did that happen? Is the founder a tech person?

Michael Card: [00:00:16] He is, yeah. So Jason comes from a tech background, and he saw the amount that our franchise partners were spending on Square, because originally we were on the square. The cost associated with that, the some of the fat in the program that we were paying for that we never used as well as some shortcomings in other areas. He's like, we can we can do this better.

Blake Oliver: [00:00:41] This episode of The Cloud Accounting Podcast was recorded at the Oracle Net Sweet Sweet World Conference in September of 2022. To learn more about Net Sweet and the Sweet World Conference, visit Net Sweet, Sweet WorldCom. Welcome to the Cloud Accounting Podcast. We are recording in Las Vegas at Sweet World, and I am Blake Oliver.

David Leary: [00:01:06] And I'm David Leary.

Blake Oliver: [00:01:07] And we have a special guest today, Mike Card. Hi, Mike. Welcome to the show.

Michael Card: [00:01:12] Thanks. Yeah, happy to be here.

Blake Oliver: [00:01:13] Your LinkedIn says accounting for cookies.

Michael Card: [00:01:16] Yes, it does.

Blake Oliver: [00:01:17] It's my favorite LinkedIn subtitle I think I've seen yet. Tell me why accounting for cookies.

Michael Card: [00:01:23] Yeah. Basically the last five years of my life have been about cookies. It's been a lot of a lot of interesting conversations around cookies. So I thought it was an appropriate title.

David Leary: [00:01:34] And that's because you're a crumble.

Michael Card: [00:01:36] I am that crumble. Yes. I am the VP of Finance over at Crumble and I've been working with crumble since they started.

David Leary: [00:01:41] Okay, So I have not had a crumble cookie, but my daughter is like obsessed. She's like, you got to have a crumble cookie. And now am I summarizing the concept correctly? Or you kind of make the cookies extra thick and then at the point of sale or the point of purchase, you guys crumble them or break them and I buy crumbles. Know how it works? No, no, no. It's completely still concept. Okay. I was like, it's amazing. Business model. They're selling broken cookies. Okay.

Michael Card: [00:02:02] All right. That's an interesting idea. I'll bring that up with R&D, but no, no, no. It's just. Yeah, just amazing gourmet cookies. The fun thing is you get to you get a check every week what the cookies are going to be. We have a wide variety and it's on a rotating menu. So if your cookies up, you better buy it because it might not be around for even up to a year.

Blake Oliver: [00:02:25] Limited edition cookies, basically. Yeah. Okay.

David Leary: [00:02:28] And so before we get into Net Sweet and all this other talk, which has been reasonable, we want to talk to you. Yeah. And how it crumbles next week. But you have a you were a bookkeeper, you at your own bookkeeping firm, you got into tax and accounting. You work for years doing that. And so now is this like the peak of your life? Like, is it all downhill now after this if you're working for a cookie company?

Michael Card: [00:02:47] I mean, definitely. I don't know if I would find an industry that would be more enjoyable. But that being said, yeah, it's worked out really, really quite well. My goal was always outsource accounting services and then find a client that's doing something amazing and jump on board and it worked out really well.

David Leary: [00:03:05] So there were a client of yours first. Yeah. Okay, so tell us the story. Yeah. They come to your house or the door and they say, Do my books.

Michael Card: [00:03:12] Yeah, quite literally. Yeah. So the founders, it was a family practice. My mom and I, she had helped them with some tax stuff. She's more on the tax side, more managerial. She had helped them with some some tax stuff on a previous venture. So they stopped by and said, Hey, we're going to start baking cookies. We need accounting done. We said, Yeah, we can. We can help with that. And it was pretty awesome. It kept growing, kept growing, kept growing. They started franchising. We started doing the accounting work for a lot of franchise partners. Our firm grew along with Crumble.

David Leary: [00:03:41] And what were you doing the bookkeeping on then?

Michael Card: [00:03:44] So we provided services for the franchise or the corporate entity, and then we started providing bookkeeping services, tax services, payroll, sales tax, all that fun stuff for all of the franchisees as well.

David Leary: [00:03:56] And, and that suite from day one. Or were you.

Michael Card: [00:03:57] Also those books online for.

David Leary: [00:03:59] Online. Okay. Got it.

Michael Card: [00:04:00] And and so yeah, we were providing these services and it kept growing and our firm kept growing and it was just this this wild ride. And then there came a point when Jason, the CEO, pulled me aside. When I was at the office one day I was working over there and he pulls me aside and he's like, Hey, we need finance in house. We need to be serious about finance. And he asked me to come on as the controller. So I did and started as a controller, continued working there. It was kind of a one man show for about a year and a half, which was a pretty hectic year and a half of my life, at which point there was a title change. I brought a lot of people on board and we yeah, we're, we're rocking and rolling.

Blake Oliver: [00:04:38] So when you came on board full time in-house, how, how big was crumble at that time?

Michael Card: [00:04:45] Oh, came on like right before the major closures started. So during the height of the pandemic. So I came on full time in 2020 and at that point you're testing my memory. I don't remember exactly how many stores we were at at that point. I think we were in the mid two hundreds at that point.

Blake Oliver: [00:05:07] Okay. So that's a pretty decent sized franchisor business going on.

Michael Card: [00:05:11] We had a lot going on. Yeah.

David Leary: [00:05:13] And then did you make the migration in that suite? Yes.

Michael Card: [00:05:15] Yep.

Blake Oliver: [00:05:16] And what was the breaking point? Why did you do it?

Michael Card: [00:05:19] Yeah, I think I got tired of having to use spreadsheets to do consolidations, and I was. I was seeing the direction things were headed. Right. We were starting to get more involved in the supply chain process. We were looking at massively expanding what we were trying to accomplish and the complexity of our entity structure was growing and I was just I knew we needed something that could last us four years. And so I started exploring and we landed on that suite.

Blake Oliver: [00:05:45] So what are you consolidating? What's the entity structure?

Michael Card: [00:05:48] Yeah, yeah. So parent company holding our franchising entity, a supply chain entity. We only have one corporate held store at this point, but as we continue to. Grow and expand. We're going to open a few more corporate stores. There's going to be other expansion opportunities that that come up. And the idea is that everything will live under that parent overarching company. And so being able to consolidate by type of business, like consolidating all of the corporate store entities into a single financial statement for just for evaluation, for analysis purposes, but also obviously tax purposes, we're rolling everything up. We need some some clarity there.

David Leary: [00:06:21] So so so what I love about I think you might call you are really the stereotypical listener of The Cloud Accounting Podcast. You were doing bookkeeping course online or Xero, and you have that experience doing multiple businesses and then now boom, you're doing the ERP, you're doing a full rollout. Like how did you get the confidence to do that? Right? Because a lot of people get that imposter syndrome, like, oh, that's, oh, that's, it's too intimidating. I can't do that. And then be like, How did you do it? Like once you got the confidence to do it?

Michael Card: [00:06:48] Yeah, Yeah. No, great, great question. And honestly, imposter syndrome is a real thing. There's, there's a lot of that. But you come to realize that everyone is figuring it out. Everyone is figuring it out. So if you are willing to work hard, you can pretty much do whatever you want. That's at least the realization I've made. I work hard and I'm willing to learn and I am not afraid to say I messed up and and admit that quickly. If you make a mistake, admit it quickly, work with the people you need to get it fixed. Move on Problems that fester. Those will those will ruin you. I've seen that happen to to some people. So yeah, that that was kind of the mentality that I that I adopted as I was moving into this. The, the question came down, Hey, come on. As a controller. I said, Yeah, I think I can do that. Yeah. Make the move, leave the family practice. That was scary. That was, that was hard. Unexpected. My, my mom was very supportive. That was great. And then, yeah, just every new day at crumble, it seems exercise of that muscle for me of saying, I don't know how to do that right now, but I know I can figure it out.

Michael Card: [00:07:57] Trusting myself to to be able to rely on resources that I had available to me and ask the right questions. And it's one thing led to another. And then when it comes to implementing the ERP, honestly, I relied pretty heavily on on my experience with QuickBooks Online, right? Because when you get really into QuickBooks, you'll notice where there's holes, you'll you'll be like, Hey, wait, I want to be able to do this. I can't. And the more you work with businesses that are growing, you're going to start seeing those those walls pop up, right? And even a ways there's ways to do some things in that system that you realize or you feel like there's a better way to do it. So as I started hitting those walls, it gave me the the resources I needed to ask the right questions in the ERP process. And again, I just approached it accepting the fact that I don't know everything, but being quick to to fact check people as well. I did a lot of fact checking against the sales people as we were looking at ERPs, and I don't know how much they actually enjoyed working with me, but it worked out. So.

David Leary: [00:08:59] So you're not your in-depth knowledge of QuickBooks Online, of what it can and can't do, really set you off the right foot of what you're looking for in an ERP?

Michael Card: [00:09:07] Yeah, I mean, accounting software is accounting software, right? So I felt hyper confident with my experience in QuickBooks Online that I could look at an accounting software, even a much more robust one like NetSuite, and say, okay, this is what it's missing, or This is what it has that I'm currently missing, or this is what I need to understand about how it works. Now, as far as all of the other aspects of an ERP, that's where I started seeing that I had blind spots, right? And that's where the questions come in. But yeah, I'm not afraid to just beat systems to to a pulp, trying to make sure that I understand how they work. I break systems quite regularly in my processes and that's learning happens at those points and I love that.

Blake Oliver: [00:09:52] So where did you go to learn what you needed to know about ERP and Net? Sweet?

Michael Card: [00:09:59] Yeah, I mean, it starts with Google searches. I talked to a lot of people that I trust. I did. I do have an awesome series of mentors that I can refer to and ask questions to highly recommended to to anyone who's hoping to kind of follow a similar path. And and I was able to start bouncing things off of them. And really almost more than anything, in a lot of instances, it just gave me the confidence that I needed to know that I am asking the right questions. Right. And asking questions that you think sound dumb is not a bad idea. I did quite a bit of that during those few months while I was exploring ERPs, asking questions that felt super obvious, but it actually turned out to be extremely beneficial because either they'll explain it because it's an easy question and they're happy to answer easy question. Salespeople love easy questions, so they'll answer easy questions all day long and you'll get the information you need. And if it's not an easy question, how they go about answering it, you'll learn a lot. You'll you'll realize, oh, this is a possibly a. Weak point in the CRP, or this is a very complex aspect of the CRP, but it's critical for me. I need to dig. So yeah, it's communication, it's interaction with with those those people that you get to work with. And everyone's trying to do the right thing, right? Everyone's trying to help each other accomplish our goals. Salespeople, they're trying to get a sale, but if they make a bad sale, it's going to come back to them. We need a good product. If we're terrible to work with, we're not going to have a good experience with the product, right? So just trust that people are trying to work towards a common goal. Make sure you establish that goal. Things go well.

Blake Oliver: [00:11:33] What else did you look at.

Michael Card: [00:11:35] As far as ERPs? Yeah, we looked at Sage Intacct brief stint looking at SAP, and then I was told that that was not the direction to go from what I saw. I could agree with that. But yeah, I really.

Blake Oliver: [00:11:49] Came down because of the price.

Michael Card: [00:11:50] Yeah, the price. And Cromwell is a very tech forward company and I think I probably would have given my CTO a heart attack if I told them that I wanted to use SAP. He did. Or we had a very interesting conversation. Even around NetSuite, financial softwares are, generally speaking, a little bit slower on like the up and coming tech side. Netsuite does a pretty good job, but but I had to help them understand know there's there's improvements in the system you're not working with the original Oracle system here. You know we have something that's a little bit better. But anyway yeah, we looked at Sage Intacct. It was a cool solution. I think there was a lot of good. What it really came down to was as I was asking them, Can we do this? Can we do this? And I was like, I was way down the road. At that point I was like, How does it handle multi subsidiary, multi currency? Like I was trying to be as future looking as possible in my questions.

Blake Oliver: [00:12:44] Global empire of.

Michael Card: [00:12:45] Cookies. Exactly right. We want to be the global cookie company. So the the questions I was asking Sage had many more instances where they said we don't do that yet or we don't really support that. This is how you would work around that. Whereas NetSuite Sweet was very quick to say, Yes, we can handle that, or we have a partner that can handle that, or we have an integration that can handle that. And that gave me the information I needed to know that NetSuite was the system that would would be the most futureproof for us. So that's that's where I went.

David Leary: [00:13:15] So obviously you landed on NetSuite, you picked up suite. Can you paint a picture of what your app stack, your tech stack was before and where you're at now and kind of the timeline of that migration process?

Michael Card: [00:13:27] Yeah. So before NetSuite, we had QuickBooks Online. We use Divvy as our corporate card and spend solution and Bill.com as payables, but BILL.COM and next we kind of happened around the same time those, those came on board around the same time. And, and honestly, more than anything it was we have an ERP, let's flesh out our processes. So around the same time the ERP came online is when I started being able to hire more aggressively onto my team. So it's not really that we've replaced things on our tech stack. It's that our tech stack became fleshed out right? And it's still very much so. In the process of being fleshed out, we're looking at we're using the net suites warehouse management solution, the WMS. But but we're actively exploring improved ways to approach R and AP and procurement. We're talking to a lot of vendors. That's why we're here is really where we're working with as many vendors as we can to make sure we have a clear picture of what our options are.

Blake Oliver: [00:14:29] Who have you been visiting around the show?

Michael Card: [00:14:30] Oh man, we've talked to I think we've pretty much talked to everyone. But but some major ones that we're looking at. We're looking at Cuba as a potential solution for kind of a holistic approach to the whole procure all the way through pay process, really streamlining that. That's something we're exploring. We've also looked at Esker, but they're not I don't think they're here. I haven't seen Asger, but that's another one we're looking at kind of in that automation and and more holistic process solutions. I mean, pay and Tesoro looking at some payroll stuff, papayas kind of intriguing papaya.

Blake Oliver: [00:15:07] What do you use for payroll now.

Michael Card: [00:15:09] We're on ADP, we're using their total source solution PEO because we're growing so fast, being able to have them deal with all of the regulatory stuff, it's been very valuable. So we went with the more expensive option that got out of the way of our growth and that is something that we've done on occasion. Honestly, we've made judgment calls like, hey, it's more expensive, but it gets out of our way and we can just focus on what we're good at, which is franchising and making awesome cookies. So yeah.

Blake Oliver: [00:15:39] So we've been asking customers about what parts of the suite they're using. How full suite ahead are you as that? That is the theme of this conference.

Michael Card: [00:15:49] Yeah.

Blake Oliver: [00:15:50] Yeah. So you said you're using warehouse management, which is a net suite add on. What else?

Michael Card: [00:15:57] Yeah, we're using the fixed asset management module. We're using, I think. I don't remember what it's called. It's like advanced Advanced accounting Solutions. I don't know. We are very close to be using the revenue recognition module, and we also are actively building out the One World module as we're moving into Canada.

Blake Oliver: [00:16:17] So. And what are the revenue recognition issues around cookies?

Michael Card: [00:16:21] Yeah, right.

Blake Oliver: [00:16:23] I'm trying to imagine.

Michael Card: [00:16:24] That it's actually much more around the franchising side. Okay. The initial franchise, the fee. Yeah. The initial purchase does have to be recognized over the life of the agreement. So, yeah, it's a small enough part of the business that we haven't used it yet, but we're getting to the point that it's a good thing to automate.

Blake Oliver: [00:16:42] Well, and if you sell cookies on a subscription at some point, then you're going to have to, you know, the onboarding fee is going to have to be amortized over the life of the customer.

Michael Card: [00:16:51] Absolutely. You know that that may very well come.

Blake Oliver: [00:16:54] So what do you use for e-commerce?

Michael Card: [00:16:57] Yeah, So like I mentioned, criminals are very tech forward company and we actually built our own point of sale. Wow that all the stores use its it uses Stripe as our merchant processor. Mm hmm. But yeah we built it ourselves. We.

Blake Oliver: [00:17:14] How did that happen? Is the founder a tech person.

Michael Card: [00:17:17] He is, yeah. So Jason comes from a tech background, and he saw the amount that our franchise partners were spending on Square, because originally we were on square. The cost associated with that, the some of the fat in the program that we were paying for that we never used as well as some shortcomings in other areas. And he's like, we can we can do this better. That's that's like if if there is a sentence that describes Jason McGowan, it's we can do this better. He looks at things in a way that other people don't and it's so great. So so he committed to it. We brought on Bryce, who's our CTO, and together they started building.

Blake Oliver: [00:17:58] So that is amazing. That's a cookie company that built its own point of sale system. I mean, hey, that's, that's revenue recognition someday when you decide to license that out.

David Leary: [00:18:09] Yeah. Shopkeeper We're sure was built. He had wine shops and he couldn't get what he wanted. He built the first iPad point of sale, really, and that was turned eventually became shopkeeper. But now this is interesting because you're up there in Utah and what we call it, Silicon Slopes. Yeah, right. Debbie was there. There's lots of startups there and that scene is there. It's here some part of your founders where why don't we just spin out this point of sale as a standalone company?

Michael Card: [00:18:35] Definitely a possibility. Definitely a possibility. And we've been approached by a number of brands asking to license the software, but we want to perfect it a little bit more and make sure that we have something that's truly unique and excellent before we start taking over that market as well.

David Leary: [00:18:51] But does NetSuite have a point of sale as part of the suite opportunity here?

Blake Oliver: [00:18:56] Yeah, and they could be truly sweet with with crumble.

Michael Card: [00:19:00] Oh, there you go. Oh, I love it. I love it.

Blake Oliver: [00:19:03] Evan would like that joke. I think I hope. What hardware does it run on iPads or.

Michael Card: [00:19:09] Yeah, yeah, yeah. All, all of our stores run iPads. The kiosks are iPads, but there's there's a lot of technology around. We actually have a very, a very awesome dev team that has been doing a lot as far as gathering data and improving automation and functionality and consistency in our kitchen processes. So yeah, there's there's more than just a few iPads involved.

Blake Oliver: [00:19:33] So you have iPads back in the kitchen too, for when people are making the cookies.

Michael Card: [00:19:37] Yeah. And every cookie you have an iPad with you that walks you through every step of the process and.

Blake Oliver: [00:19:42] Quality control.

Michael Card: [00:19:42] There. There's a lot of quality control.

Blake Oliver: [00:19:44] Interesting. Yeah. And so do your franchisees make the cookies at their stores?

Michael Card: [00:19:49] Every every store is a bakery. Raw ingredients are brought in through Cisco, who's one of our partners, a few other smaller partners, but primarily Cisco. And then we ourselves focus on those specialty items like the gummy sharks for Shark Week, for example. We we go about sourcing all of those because it happens once a year. It's not realistic for us to to try and expect a third party to handle that well for us. So we handled the acquisition, the bringing it all in and shipping it out to our franchise partners and that's that supply chain arm that triggers the warehouse management.

Blake Oliver: [00:20:20] So if I wanted to open a crumble, yeah, like what's my buy in as a franchisee. Yeah.

Michael Card: [00:20:25] Yeah. So the, the initial franchise purchase and we're actually in talks about this right now and I don't actually know for sure what it's changed to but. I believe it's 50,000 is the licensing purchase. But a given store, depending on where you're at, obviously build out costs are going to vary, but you can expect it to run you between three and 500,000 to get fully up and running first week's inventory. Our stores cash flow very fast. Yeah, very, very fast.

Blake Oliver: [00:20:58] Well, the cost of goods is very low. You know, I assume it's the bakery business.

David Leary: [00:21:02] The retail price is very, very, very high. Very, very high.

Michael Card: [00:21:05] Yes. So. So yeah, there's really good margin.

Blake Oliver: [00:21:08] Yeah, that's great.

David Leary: [00:21:09] Yeah. Michael, if people obviously they can go to crumble at the website in order cookies and have them delivered and or they can curbside pickup and all these crazy options. But what does it mean. Just want to talk to you. Our listeners are like, Hey, I have a client that maybe needs to make the next step or they want to just connect.

Blake Oliver: [00:21:26] Are you hiring?

David Leary: [00:21:27] Oh.

Michael Card: [00:21:27] Yes, actually, there you go. Kind of always at crumble and not not just in the finance area, but actively. I'm looking for someone for corporate PHP and we have kind of two arms of FBA. We have our unit FBA focused on store financial and performance and then we have our our corporate side and looking for a staff accountant, pretty entry level staff accountant on our supply chain side. So okay.

Blake Oliver: [00:21:53] Great. Well we have students that listen great, we have people who do FBA that listen.

David Leary: [00:21:57] So if people like cookies.

Blake Oliver: [00:22:00] People that love cookies, you know, I love who does it, right. Yeah. Well if those folks who are listening want to find out about the jobs you've got available, where should they go?

Michael Card: [00:22:10] You can just go to our website. There's a section with job postings there. We're on all of the major job posting places and if you're in the area, you can always just stop by, say, hi, we've got a merch store in our in our corporate offices and.

Blake Oliver: [00:22:25] In Orem, Utah.

Michael Card: [00:22:26] Oh, actually we just recently moved. We are in Pleasant Grove. Lynn Linden area. Yeah, we got, we got enough space for us now, which is nice.

Blake Oliver: [00:22:36] And that website is crumble cookies crumble cookies dot com.

Michael Card: [00:22:43] Correct.

Blake Oliver: [00:22:44] Mike Card, thanks for joining us today.

Michael Card: [00:22:47] This is great.

David Leary: [00:22:48] A lot of fun.

Michael Card: [00:22:48] Appreciate it.