Looks great. As a note I don't count credit card rewards as revenue, but rather I count it as an offset to expenses. In this way, rewards don't add to the top line, but rather improves the bottom line. Basically I consider it a way to discount my expenses, or as a negative expense. The reason is because those rewards are linked to expenses. If you spend more, you get more rewards. Spend less, you get less. You can't increase rewards (generally) without increasing expenses. So I see it as a way to discount or reduce expenses vs. increase the top line. Long story short, if you see your rewards increasing 10x that means you've increased expenses some factor of 10x which isn't so great. You could list rewards under the "Everything Else" line of expenses as a negative expense in red. The result will be the same on the bottom line but it won't be misleading the top line, which should be driven as high as you can.
Also those cloud expenses look significant. That looks like an 80% increase year-over-year which is substantial. Is there a way to shave off a significant amount by moving to a different method for architecture? Or will that break your system? I worry about rapidly growing cloud expenses especially when you're not that huge of a company.
Finally I'm curious about those dividend earnings! Living off them is great, especially as you were doing so in the lower-interest rate years. Can you share insights in the high yield dividends you're earning that are also low risk enough that the underlying investment value doesn't erode?
I hadn't heard that about credit card rewards. I'll talk it over with my accountant. Thanks for the tip!
>Also those cloud expenses look significant. That looks like an 80% increase year-over-year which is substantial. Is there a way to shave off a significant amount by moving to a different method for architecture? Or will that break your system? I worry about rapidly growing cloud expenses especially when you're not that huge of a company.
The big one is Shopify ($4.7k). That's partially because they charge a percentage of our sales and partially because we had to upgrade to the $300/mo plan when we switched to the 3PL in order to get features that bridge our 3PL's system to our Shopify account.[0]
The other big jump was in HelpScout ($2.4k) because we used to have a discounted rate as a startup, but that ended after two years, so we pay a whopping $50/seat.
>Can you share insights in the high yield dividends you're earning that are also low risk enough that the underlying investment value doesn't erode?
Oh, really nothing especially clever. Just the popular Vanguard index funds like VFIAX (S&P 500) and VBTLX (total bond market).
I had some money in VLGSX (long-term treasuries), which didn't have a good time when interest rates increased in the last couple of years, but fortunately, I was diversified enough for stocks to compensate.
Interesting on the cloud expenses (Altho I'd really categorize those as SaaS vs cloud, but that's just semantics. I tend to think of Cloud as IaaS / Paas / Faas vs. Saas which is mostly renting an online application). Regardless, Those 2 only add up to $7.1k so I'm curious where the bigger ~$9k remainder is coming from.
Folks love Shopify, and it does work very well. But for my small businesses I've been very happily using Woocommerce on Wordpress, basically nothing but the hosting cost for Wordpress, and it's been delivering very well. I've done several million annually on the Woocommerce / Wordpress combo.
That being said, even eliminating or reducing Shopify would still have you at a premium vs last year so there must be some other Saas / Cloud expense driving that bill up.
>Folks love Shopify, and it does work very well. But for my small businesses I've been very happily using Woocommerce on Wordpress, basically nothing but the hosting cost for Wordpress, and it's been delivering very well. I've done several million annually on the Woocommerce / Wordpress combo.
I don't love Shopify, but it's been overall fine. It mostly does what we need, and it's been stable, so I've been reluctant to change. Even if we swap out Shopify, we still have to pay someone whatever credit card processing fee.
>Regardless, Those 2 only add up to $7.1k so I'm curious where the bigger ~$9k remainder is coming from.
It's just a lot of little things. A lot of them are around team collaboration. Here are the next top five:
CircleCI: $2.3k
Plane (contractor management): $1k
Time tracking: $700
TalkYard (support forum): $700
Inventory management: $600 (we stopped using this after we switched to the contract manufacturer)
Agreed. You should not include rewards as revenue. That is incorrect and misleading. I get lot of credit card rewards for our business but it is definitely not revenue. If anything, some accountants will argue that it is actually an income for yourself if you redeem them.
Unless this has changed in the last few years, credit card rewards are non-taxable income. you can personally keep the rewards and not claim this as income. I'm pretty sure this is still the case because if it wasn't my cash back card would be sending me a 1099.
Also those cloud expenses look significant. That looks like an 80% increase year-over-year which is substantial. Is there a way to shave off a significant amount by moving to a different method for architecture? Or will that break your system? I worry about rapidly growing cloud expenses especially when you're not that huge of a company.
Finally I'm curious about those dividend earnings! Living off them is great, especially as you were doing so in the lower-interest rate years. Can you share insights in the high yield dividends you're earning that are also low risk enough that the underlying investment value doesn't erode?