Ean Price Murphy With Moxie Bookkeeping And Coaching

Intro: [00:00:04] Broadcasting live from the Business RadioX Studios in Atlanta, Georgia, it’s time for high velocity radio

Lee Kantor: [00:00:14] Lee Kantor here another episode of High Velocity Radio, and this is going to be a fun one today. On the show we have Ean Price Murphy with Moxie Bookkeeping and coaching. Welcome, Ean.

Ean Price Murphy: [00:00:24] Thank you for having me.

Lee Kantor: [00:00:25] Well, I’m excited to learn what you’re up to. Tell us about Moxy. How are you serving, folks?

Ean Price Murphy: [00:00:31] Yeah. So we are a profit first bookkeeping firm, meaning that we use the profit first philosophy based on a book called Profit First by a guy named Mike. And if you haven’t heard of it, it’s it’s definitely a must read in the entrepreneurial set. I did get a little giggle when when you said it was going to be a fun one and then said bookkeeping and I’m I’m assuming that there were some wilted faces after they heard that word.

Lee Kantor: [00:00:54] No, I think that when you are bold enough to have a name as moxy bookkeeping, I know that there’s fun in store. So I have a lot of confidence. I have a lot of faith in you. And just for full disclosure, we run our company as a profit first company. So we I am a big fan of super fan of that methodology and a lot of Mike’s work. But let’s for the listeners who aren’t familiar, why don’t you kind of give them a thumbnail of what profit first? How that’s different than maybe the traditional way of keeping track of your money?

Ean Price Murphy: [00:01:28] Yeah. So the biggest difference is I think that traditional bookkeeping and even accounting is really looking at the past what has happened so that we can make some guesses about the future. What I love about profit first is that it says, Well, great, we need to know that, but I’m not going to try to drive my car by looking in the rearview mirror. I need to know what’s happening right now, and I need to have the road lit far enough ahead of me that if there is a pothole that I can take evasive action before I ruin my axle. And that’s what profit first does

Lee Kantor: [00:02:14] And the way that I explained it to my folks and the people that we coach in terms of helping them start studios and things like that, we recommend profit first. We tell them when you pay yourself first and then adjust your expenses. That’s just a better way of doing business as opposed to the way most people do. Business is they just start subtracting and then whatever is left is what they get to keep. And then sometimes it’s nothing, and that’s not that’s not sustainable.

Ean Price Murphy: [00:02:44] We find right to me, profit first answers that very important question of I know you told me to pay myself first, but how do I do that when I when there’s so much money going out? And so it gives the nice guidelines, you know, and I use a lot of crazy metaphors and analogies in my work because that’s how my brain works. So for me, you know, when I’m explaining it to someone that’s like, I’ve never heard of this before, what is it? It essentially comes down to give every dollar a job and give every dollar a home in a separate bank account like the envelope system. And the first pushback that I always hear is, Oh, that sounds so complicated. And I think, well, do you have a junk drawer at home? I know I do, and I know there are stuff in there that I need, but I can’t put my hands on it right away. I couldn’t tell you if we were running low on twist ties, for instance, versus my silverware drawer where everything is neatly laid out. I know how many forks, knives and spoons I have so that when I go to set the table for dinner tonight, I can look at that and be like, Oh, I better run the dishwasher tonight. Otherwise I’m not going to have enough forks for the morning. That’s what profit first does. It allows you to see things separated out rather than in a big junk pile so that you can immediately know just by a glance at your bank balance. Do I have enough to carry me through the month or not?

Lee Kantor: [00:04:11] Yeah. And also when you say that OK, for every dollar X number percent goes to profit and that’s going to be a priority of me pushing it aside first, it just to me gives you the discipline to say, OK, that means, look, this month I’m going to have to cut back over here. If I want that number to happen, something’s got to give somewhere else. Yeah. So it allows me to kind of stay on top of things and prioritize. It’s like the person in the plane. I’m sure you use this metaphor of, you know, put the oxygen mask on yourself first, because if you don’t make it, no one’s making it. So that’s the way it is in business, too. I mean, you can’t forget that it’s hard to run a business successfully if you’re never getting paid, and there’s a lot of business people out there who think that’s normal.

Ean Price Murphy: [00:05:01] Yeah, and it’s really not. I mean. The word that you used prioritize, I think, is incredibly important, so profit first is a set of guidelines that let you see what your choices are and what the effect they have is so that you can be intentional and prioritize correctly rather than just throwing money at whatever is squawk and loudest for it today.

Lee Kantor: [00:05:24] Now you are a bookkeeper and a bookkeeping firm for folks who don’t know that maybe they have a CPA, somebody keeping track, maybe it’s themselves. But how does a bookkeeper like, do I need a bookkeeper and a CPA? Or is there overlap there?

Ean Price Murphy: [00:05:43] That’s a great question. There is a little bit of overlap, but they work in harmony rather than than working, sort of overlapping. When when we use the word accountant, it’s very much like using the word doctor. It could be a dermatologist. It could be an ear, nose throat guy. It could be a professor of philosophy, right? They’re all called doctor and similar in the accounting world. There is management, accounting and tax accounting. And and there’s a spectrum in both of those, right? So in the tax accounting side, you can have your EIA’s, you’re enrolled agents or your CPAs, you’re certified public accountants. Those people are generally focused on making sure that you are in compliance with the laws and paying the least amount of tax legally allowable. That’s their job. Now, some of them do bookkeeping, some of them do advisory. But the core of where they are focused is that when we look at bookkeeping, the core focus of a bookkeeper is on the internal day to day management of information so that you can make smart decisions. Now here’s the rub. Bookkeepers exist in this little bubble where they’re making sure that the books are perfect and match to the bank and the reports are clear and clean. And that’s kind of the end of their job. Some bookkeepers are able to explain this is what this report means.

Ean Price Murphy: [00:07:14] A very few number of them can take it the next step and say, And here’s what you should do about it. And the the next question after that is the, you know, the business owner asking, well, what can I afford? Can I afford to do X, Y and Z? And almost every bookkeeper will shrug their shoulders because that’s no longer bookkeeping. That’s the the work of a CFO, a chief financial officer. But most small businesses don’t have one of those. So in my opinion, you need not only a bookkeeper, although that can certainly be you. You definitely need a tax person to help keep you in compliance and what most people don’t know that they need. But that’s the person who’s really going to be able to answer their specific questions is someone who knows business advice, financial advisory like a CFO would. And again, because fractional CFOs are 5000 up a month. Having someone that is a profit first professional can give a business owner who does not want to learn accounting and does not want to be working in Excel pivot tables. The common language that a CFO would use to talk to their bookkeeper, their accountant and and make a plan for themselves. So it’s this brilliantly simple, very accessible version of some very high level stuff.

Lee Kantor: [00:08:45] And then so what I’m hearing is in your firm, you help with the bookkeeping and some of this advising. And then the CPA is still needed, but primarily to kind of execute the taxes.

Ean Price Murphy: [00:08:59] Absolutely. So I think of what we do in our firm as beans and rice. You know, bookkeeping is beans, profit versus rice or vice versa. You can cook rice a million ways without beans and beans, a million ways without rice. When you bring them together, however, there’s this magical complete protein that happens that would not have happened on its own. So I don’t think profit first should or does replace your bookkeeper, which is why it’s an additional service that we offer. We just weave it in because again, if we’re talking about opening multiple bank accounts and most people have at least five. A lot of bookkeepers go. That doesn’t make sense, I don’t want to do that, and so we provide this service of not only are we happy to to work with you in the profit for system, but if you need help getting set up in it, we can. We can help you with that too, and we can certainly help carry on. There are clients that we work with for, you know, months and months and months and more than more than a year to to make sure that the habit is really strongly formed before they do it on their own.

Lee Kantor: [00:10:01] Now, if I work with you or a bookkeeper like you, does that mean that maybe I don’t have to pay like super high fees to a CPA? Maybe there’s less for them to do now that I’m handling this aspect of some of which might be construed as their job because I’m giving them clean numbers now, rather than them having a box of receipts that they have to sort through.

Ean Price Murphy: [00:10:29] Absolutely. If you’re handing your account in a box of receipts, please stop now. Nobody likes that. I know that you don’t like it, and your accountants certainly doesn’t. So what you’re doing then is essentially paying your accountant who’s a tax professional to do basic data entry work that is not the best use of your dollars. So, you know, there’s some structural things in the technology has come so far. You can take a little picture of the receipt on your phone and tell it what it was for right there and have it upload to software like there’s all of this beautiful automation that’s happening. And so, yes, hopefully your accountant bill will go down if you have good, clean books. I would also caution people, though, because I think a lot of people put their account, their tax accountants in the position of being the one to review the books and catch the mistakes. And again, that is not the job of a CPA. They’re not there to dove deeply into your books and say, Well, did you? Why did you really spend this much on marketing? What is that? Is everything categorized, OK? They’re very, you know, that’s that’s just not their focus. So, so expecting to do your own bookkeeping, not have any oversight, no controller, no CFO, you know, no full charge bookkeeper looking at your shoulder and hand those books to the accountant.

Ean Price Murphy: [00:11:54] The accountant would not be doing a U.S. service by digging deeply and to say, are there any mistakes that would cost a whole lot? And usually they’re pretty busy around the time that your taxes are due, so they’ll file what you tell them to file. You’re the one giving them the information unless you’re having them process all of your receipts. And so both of those are not ideal scenarios, in my opinion. Much better to have someone set you up correctly in the bookkeeping software of your choice so that you can do your own bookkeeping because you’re the one that knows how you earned and spent or get some assistance, you know, and some oversight. We do a lot of what I call second set of eyes bookkeeping where you, you or your staff member who maybe is an office manager and not a real full time full charge bookkeeper does the data entry and will do the reconciliation and look at the reports and review them and assess them, and then talk to you about them to make sure that you understand what’s going on so that there is that layer of, you know, oversight and double checking.

Lee Kantor: [00:12:56] So now in that layer of oversight and double checking, are you there to also make recommendations and like talk strategically about the business and the direction? And you said you wanted to do this, but here you’re spending a lot over here that has nothing to do with that or I’m noticing that this is now twice as much. It was, you know, doing some analysis and some strategy. Or is it just these are the facts here it is. You know, figure it out.

Ean Price Murphy: [00:13:25] It depends on what the client wants. You know, my preference is always to do the strategy, and the reason that I choose to continue to call myself a bookkeeper is because most small business owners falsely assume that is their bookkeepers job. And again, that’s really an advisory level position, you know? Yes, we can look for trends if you want us to print out reports that say, show me month over month. But as a bookkeeper, if I see a five hundred dollar phone bill one month, I don’t have a reason to suspect that anything’s wrong. Right? Maybe you just called France on your cell phone? I don’t know. And so you, as the business owner, have to be looking at those reports. No one knows your business better than you, and no one cares as much as you do. So if you’re doing what I call abdicating instead of delegating your books and saying, but you’re the bookkeeper, why didn’t you catch this? The answer is I don’t know what the parameters are, and I don’t same thing. I don’t think it’s a good idea for your CPA to be digging deeply into your books just in case there’s a question. I don’t want to be wasting your money by by looking, you know, by analyzing everything, if that’s not what you want or need. I love doing that. When there’s a specific question, right? When I say, here are your reports for the month, here’s your year to date. Whatever the reports are, you want to see if you come back to me with, Wait, why is this line item so high or so low? I go, Let’s jump on the phone and look, let’s figure it out. But it’s irresponsible to assume that I, as your bookkeeper or even your advisor, would have any insider knowledge, even if I know your business really well of why a particular expense might spike or drop during a particular month.

Lee Kantor: [00:15:16] Now are you helping me set up certain reports that are kind of giving me dashboard views of my financial health?

Ean Price Murphy: [00:15:26] Yeah. So we generally use QuickBooks Online or zero zero, which is my personal favorite, and those softwares have little dashboards built in them, and they all have these pre formatted reports so that it’s very easy with maybe 15 minutes of training for you to be able to go and look those things up. You know, one of the things that I’m always really trying to get people towards is this idea of you shouldn’t have to wait on your bookkeeper or your accountant in order to make decisions about your business. We want to be there to make sure that the data is solid so that when you’re making plans and assumptions that you’re doing it on clean, clear, real data. But I don’t want you to have to schedule with something from me two weeks from now because you have the opportunity to. You know, get a great deal on something or there’s a limited time offer or, you know, you want to make an extra debt payment and aren’t sure if you can afford it or not. If I’ve done my job right as your advisor. I’ve let you know here are all the things that you can totally figure out on your own without having to learn accounting. You just, you know, know how to click a couple of reports or with profit. First, just look at your bank balance. And here are the flags that if you see them, what they’re waving is caution and give me a call and we’ll figure out what’s up before that yellow turns to red.

Lee Kantor: [00:16:58] Now, if if a person an entrepreneur did their job right and has this information, could this have helped them or would this help them for like a PPP loan or a, you know, one of if they were getting an SBA loan or a business loan? If you do a good job, here are you. Do you now have the data you need to kind of share that with your banker and anybody else that might be able to help you, you know, get financing when you need it?

Ean Price Murphy: [00:17:31] Absolutely. And the best time to get a loan is when you don’t need it. The best time to be prepared to get a loan is before you need it. One of the one of the things that really broke my heart during the pandemic with the PPP was business owners who thought they were being smart by not paying themselves or not paying themselves through payroll, even though they were an escort or taking shortcuts or not. Keeping up to date on things got tremendously less than those who were sort of following the rules a little bit beforehand and keeping good track. I mean, the difference between like five thousand and one hundred thousand over and over and over, I had people reach out to me because they said, you know, I didn’t get anything for the first PPP and I’ve heard there’s another one and I want to be able to get something because I’m drowning over here.

Lee Kantor: [00:18:22] And it was because they were trying to be a little clever when it came to how they pay themselves.

Ean Price Murphy: [00:18:28] I think I think more than clever they were trying to be penny wise and saying, I don’t see the value in that. I know my accountant told me to do it, but I don’t. I don’t get why, so I’m not going to. And you know, that I think is one of the things that frustrates accountants all the time is I tried to tell you. So I’m also a huge fan of people checking in with their accountant at least once a year before tax time. Right like now, September October is a fabulous time to reach out to your accountant and say, Can we just take a look at everything in the year so far to make sure that I’m on track? Have I paid the correct amount of estimated tax payments, or should I slide that one into January before the taxes are due so that I I know? Am I in the ballpark or not catch any mistakes before they bite you in the behind? And more importantly, listen to the good advice that your tax person will have for you about given where you are. Here are the the tax strategies that I would recommend we implement before the end of the year to make sure that you’re really maximizing your savings and quarterly is best, in my opinion. But but at least once a year

Lee Kantor: [00:19:45] Now in your practice, do you have a specialty in terms of the type of entrepreneur you work with? Like do you do more manufacture or more creative services or professional services? Do you have a sweet spot in terms of your ideal client?

Ean Price Murphy: [00:20:01] We do. It starts with our niches. What I like to say No A-holes. We like working with people who are nice people. That’s sort of the first barrier for entry. You have to be a good communicator and and someone that’s pleasant to work with. We treat you with respect. We expect the same. Certainly, we do serve, you know, focus on professional services and our our juicy center is the creative industry. But what I define is creative is a little bit wide, right? So I know some lawyers who I consider to be creative professionals because they’re creative problem solvers and they’re not all lawyers, but those types are out there. Some people in the trades, you know, so it’s really just sort of who identifies with that. We we love people who love what they do and want to be able to focus on that work and not have to worry so much about figuring out, Am I going to be OK? Or is there something terrible waiting around the corner for me now?

Lee Kantor: [00:21:05] Should they be at a certain revenue level before it’s appropriate to work with you?

Ean Price Murphy: [00:21:11] Um, I don’t put that out on anyone, I let people self-select for that, I think, you know, getting started off on the right foot is extremely important. One of again, the biggest stumbling blocks that I’ve seen with people who do their own bookkeeping or or even outsource it is the list of how they earn and spend money. Their chart of accounts does not apply to them. It’s whatever the default of the software was. And so they already feel a little confused and locked out and just by customizing that which every bookkeeper should do for their clients. Suddenly, things make more sense, right? It’s not sales. It’s, you know, commercial photography versus portrait photography or whatever. The whatever the distinction is, it’s it’s trying to answer the questions that the business owner themselves has. Because even if you’re in the same industry as others, what you’re doing, how you’re doing it and why you’re doing it is going to be different. So we want to make sure that we’re really aware of what your goals are and that the books and the data is supporting that. There was a second half to that question, which I’ve already completely oh.

Lee Kantor: [00:22:27] Well, it was about your height. It was about the sweet spot, and then you covered that in terms of the creatives and then and because when people drill down their business, you said that a lot of times they use the default of whatever the software has. Right. And then, yeah, and then it’s the same thing on the revenue as the expense side, I’m sure.

Ean Price Murphy: [00:22:49] And and well, so the yeah, the question that I had forgotten that I’m remembering now, as you had said, is there is there a sweet spot in terms of revenue for the clients? And I was saying, I don’t like to decide that for them because I think people really do need to get started on the right foot. So investing some upfront, I think, is a good idea. But again, if that’s not my choice to make and then after that, I really want them to focus on sales and marketing. And so whenever they feel like I’m now making enough that I need some input, I feel like, you know, I have a proven product. I’ve got clients coming to me. I’m not struggling for for income. Cash in is not my biggest concern now. My concerns are systems and spending and controlling costs and knowing where these things are going. That’s when I want to talk to them again. A lot of times that happens around 300000, but I get people calling me at one 50 or even 100. So it really depends so much on what their personal financial literacy level is, what their comfort with numbers and finance and business is. You know, I don’t want to solve a problem that somebody doesn’t have,

Lee Kantor: [00:24:02] But the way it sounds like you work with people, it might be up front, do some work to create a strong foundation and then pause and you’re available, obviously, but then swing back around when they’ve hit another kind of milestone where they can bring you in and then help maybe create tighter systems around this new reality they’re in.

Ean Price Murphy: [00:24:22] Yeah. So and that sort of reflects in our service offerings, right? We have these sort of like short jumpstart packages, you know, just a couple of meetings to get you going and that that’s not only reserved for our first starting people, that’s also a great way to get to know us and figure out if you want to continue with us. It’s just a matter of how much hand-holding you want, right? If you already have a business coach or an accountability group or a mastermind that you check in with, you may need less hand-holding from us than, you know, an entrepreneur who does not have those resources and really does need to have that sounding board and someone to help talk through the systems and say, like a general practitioner, Dr, might you know, this sounds like this sounds like we should call it a specialist like, I see it’s definitely something wrong with your inner ear, but I’m not an inner ear person. So let me go get you to that specialist and talk to me again when you’re done.

Lee Kantor: [00:25:21] Well, congratulations on all the success. If somebody wants to learn more about the bookkeeping and or the coaching or just wants to chat with you. What is the website?

Ean Price Murphy: [00:25:32] The website is Moxy Bookkeeping.

Lee Kantor: [00:25:35] Well, Ian, thank you so much for sharing your story today. You’re doing important work and we appreciate you. Thank you. All right, this is Lee Kantor. We’ll see next time on high velocity radio.