Unlocking Winery Financial Success With QuickBooks With Jeanette Tan of QB Winery Solutions

by Drew Hendricks
Last updated Jun 8, 2023

Legends Behind the Craft Podcast

Unlocking Winery Financial Success With QuickBooks With Jeanette Tan of QB Winery Solutions

Last Updated on June 8, 2023 by nicole

30441077 10215610388354768 407523351697743684 n
Unlocking Winery Financial Success With QuickBooks With Jeanette Tan of QB Winery Solutions 11

Jeanette Tan, the founder of QB Winery Solutions, is a fractional CFO and an Advanced Certified QuickBooks ProAdvisor. With a passion for small winery profitability, Jeanette’s expertise is dedicated exclusively to the wine industry. As the accountant for Kokomo Winery in Sonoma County, she worked alongside owners, office managers, and bookkeepers, teaching effective procedures and systems. Additionally, Jeanette contributes to the growth of the wine industry as a faculty member at Sonoma State Wine Business Institute, leading seminars and sharing her knowledge.

Available_Black copy
Available_Black copy

Here’s a glimpse of what you’ll learn: 

  • Jeanette Tan tells us what it means to be a fractional CFO
  • The common mistakes wineries make with QuickBooks
  • How they supervise and teach wineries with their finances
  • The Fundamental Five Course of QB Winery Solutions
  • How wineries successfully pivoted to the online sales channel during lockdowns
  • She talks about simplifying winery operations with manual integration and standard operating procedures (SOPs)
  • She shares what it takes for wineries to effectively utilize QuickBooks
  • Jeanette shares their membership benefits and the most popular video in their library
  • The emerging trends in winery financials and industry health post-COVID
  • The key performance indicators (KPIs) that are recommended for wineries and the metrics they should aim for
  • Jeanette tells us the improvements she would like to see with QuickBooks

In this episode with Jeanette Tan

Jeanette shares her journey from Maui to Sonoma County and how she transitioned from her previous career to become a trusted financial advisor for wineries. We delve into common mistakes wineries make with QuickBooks, the essential components for wineries to effectively utilize QuickBooks as a vertical solution, and the tools and integrations necessary to simplify winery operations. 

In today’s episode of the Legends Behind the Craft podcast, Drew Thomas Hendricks and Bianca Harmon are joined by Jeanette Tan, Founder and Consulting CFO for boutique wineries profitability using QuickBooks at QB Winery Solutions, to discuss the unique role of a fractional CFO in the wine industry. We also delve into the membership benefits QB Winery Solutions offers, her amazing team, emerging financial trends in the wine industry post-COVID, and the recommended key performance indicators for wineries. Lastly, Jeanette discusses her motivation and excitement for the industry.

Resources Mentioned in this episode

Sponsor for this episode…

This episode is brought to you by Barrels Ahead.

Barrels Ahead is a wine and craft marketing agency that propels organic growth by using a powerful combination of content development, Search Engine Optimization, and paid search.

At Barrels Ahead, we know that your business is unique. That’s why we work with you to create a one-of-a-kind marketing strategy that highlights your authenticity, tells your story, and makes your business stand out from your competitors.

Our team at Barrels Ahead helps you leverage your knowledge so you can enjoy the results and revenue your business deserves.

So, what are you waiting for? Unlock your results today!

To learn more, visit barrelsahead.com or email us at hello@barrelsahead.com to schedule a strategy call.


[00:00:00] Drew Thomas Hendricks: Drew Thomas Hendricks here. I’m the host of the Legends Behind the Craft Podcast. On this show, I talk with leaders in the wine and craft beverage industry. Before we get on with the show, gotta do a sponsor message.

Today’s episode is sponsored by Barrels Ahead. At Barrels Ahead, we help the wine and craft industry scale their business through authentic content. Go to barrelsahead.com today to learn more. Now, last week on the show we had Jill Osur from Teneral Cellars. Jill painted a picture of a better world for us, a better world of equality, and how wine can be used to help shape that change. If you haven’t listened to it, gotta get that episode a listen. Today we have Bianca Harmon joining us again. She’s our DTC strategist. How’s it going, Bianca?

[00:00:44] Bianca Harmon: It’s going great. Very much looking forward to today’s episode.

[00:00:48] Drew Thomas Hendricks: Yes. Today we are taking shift into the back end of the wine industry again, and we are talking with Jeanette Tan.

Jeanette is the founder of QB Winery Solutions and is a fractional CFO. Welcome to the show, Jeanette.

[00:01:02] Jeanette Tan: Hi, great to be here.

[00:01:05] Drew Thomas Hendricks: Jeanette, so tell us, what does it mean to be a fractional CFO?

[00:01:09] Jeanette Tan: It means to be a part-time CFO. So every small business needs a CFO, but most small businesses don’t need a full-time CFO.

And the wine industry there, there’s so much complexity around the costing and systems and all the different things that they have going on that they all need a CFO some folks I only work, a couple hours a month. Other folks, I work 10 hours a week. So I work whatever the amount is needed.

[00:01:38] Drew Thomas Hendricks: That is so smart. Cuz you want the quality of a top-notch CFO but you can’t afford to hire them so much. So, stepping back a second, how did you get into this business from and in the wine industry and being the fractional CFO for so many wineries?

[00:01:53] Jeanette Tan: It’s a long road, so I’ll try not to digress too much.

[00:01:57] Drew Thomas Hendricks: I hear it started when you were 12.

[00:01:59] Jeanette Tan: Yes. So when I was 12, I was the family, I was the family chef and I cooked with, Julia Child’s cookbook, but my muse was Graham Kerr, the Galloping Gourmet. We always sat down with a glass of wine and my parents drank wine. My dad drank German wines.

My mom drank champagne. Well, she drank Asti Spumante.

[00:02:18] Drew Thomas Hendricks: Oh, yeah.

[00:02:18] Jeanette Tan: So that’s what I drank. But we both progressed with our taste and so by the time I was a senior in high school, we were drinking Koerner Rouge and the really dry stuff. And then, flash forward in my twenties, my family had a French restaurant and I ended up being the manager of the restaurant and this was in the eighties. We opened a thing like in 79 or something, 79 or 80, something like that. And we didn’t have enough money to, get a proper wine cellar. So we had a very limited list of wines and we offered all of our wines by the glass. Which was in the eighties that was totally a new concept, and we focused on the California wines. We took the list of the wines that were at the 76 Paris Tasting. And we kind of went shopping with that list, and we had a bunch of those wines on our list. So we kept rotating wines, we had dinners with the winemakers which was in the eighties, again that was a new thing.

[00:03:13] Drew Thomas Hendricks: Where was this restaurant?

[00:03:15] Jeanette Tan: it was in Los Angeles. Oh. It was in a suburb of Los Angeles. And then one of my clients was a winemaker himself. He connected us with a grower and we went out and picked a half a ton of grapes and barrel fermented. Some Chardonnay and we put the barrel in, the walk-in and Oh, I’m surprised there was any wine left because we kept sampling the customer, the guests on it.

It’s like, taste this is so awesome. And then we ended up winning a blue ribbon at the local winemakers’ competition for our barrel for men and Chardonnay. So I’ve always kind of played around in the wine industry. It’s always been an interest. But when we sold the restaurant, I ended up moving to Maui.

And on Maui, you have to do a little of everything. So it became a QuickBooks ProAdvisor cause I had this, accounting, you know I had to do the bookkeeping for the restaurant, so I knew about bookkeeping and that was fun. So I did a little, worked with all different industries on Maui. Then after 20 years moved to the mainland. And

[00:04:15] Drew Thomas Hendricks: What brought you to Maui?

[00:04:16] Jeanette Tan: I was part of the management team that opened the Four Seasons Resort in Wailea. And that was just a blast of a half being part of that team and being, being in it at the very beginning.

[00:04:29] Bianca Harmon: Yeah.

[00:04:30] Jeanette Tan: So, when I moved to the mainland, we moved to the mainland, moved back to the mainland in search of better schools.

My kids were approaching high school and we ended, we landed in the only place I would go, which was Sonoma County. Oh, should I skip something in there? So, the second year that the Four Seasons was open in the beginning of the summer, the GM came to US managers and said, we know we’re gonna be slow in the fall, so we want your managers to take a leave of absence.

We’ll pay your medical, just go away. Just be back by festive season. I go, well when do you want us to leave? They go, oh, you can leave like mid-August. Just be back by November. And I’m like, I’m outta here. I got a job as a cellar rat at Dry Creek Vineyards in Sonoma County. Yeah. And in those days, so this was early eighties in those days, the game was in Napa. But they were already full with their cellar crews. And

[00:05:18] Bianca Harmon: So, you came out for harvest basically?

[00:05:19] Jeanette Tan: I came out for harvest, yeah. And spent the entire harvest working for Dry Creek, Vineyards. And I was so happy that I landed in Sonoma County. It’s just fun people. Obviously great wine and, yeah, I got to drive a forklift to top up the barrels and I was filthy for three months, I was in heaven. So then, I mean that was fun and I was ready to move back to the mainland and permanently transition into the wine industry, but I accidentally met a surfer. And stayed on Maui and got two great kids out of the deal. But, then

[00:05:55] Drew Thomas Hendricks: There’s some great ways in Maui. I’ve got an uncle over there,

[00:05:57] Jeanette Tan: Then flash forward, looking for better schools for my kids. And the only place I would live if I didn’t live on Maui was Sonoma County. So landed in Sonoma County, traded paradise for the wine industry, and by this, and then I thought I was gonna need to learn about AMS cause I thought that was the software that all the wineries used. But I discovered that all the small wineries are using QuickBooks and they all had a mess. And I took all the experience that I had gained working for the different industries on Maui. I put them together into a system that works for small wineries. And then I taught some classes at Sonoma State Wine Businesses.

[00:06:37] Drew Thomas Hendricks: What was the common, when you first jumped into these wineries with their QuickBooks, what was the common mess that you used to see? Or what’s the biggest mistake they make?

[00:06:46] Jeanette Tan: Oh, well, there’s two basic kinds of messes. One mess is because AMS is an industry-standard software, a lot of people were trying to replicate what they thought AMS was doing and they were trying to set up QuickBooks to mirror AMS.

[00:07:02] Drew Thomas Hendricks: Now AMS. So to all the people that are listening that aren’t in the accounting side, that stands for account,

[00:07:07] Jeanette Tan: I don’t know what it stands for.

[00:07:09] Bianca Harmon: AMS and then there’s RMS as well. And

[00:07:12] Jeanette Tan: Yeah. They’ve been around for a long time.

[00:07:14] Drew Thomas Hendricks: They just need powerhouses, and then so the people are like, well, I don’t wanna pay for AMS, it’s bigger than I need.

[00:07:19] Jeanette Tan: Right, exactly.

[00:07:20] Drew Thomas Hendricks: I use QuickBooks, but let me just model it after AMS.

[00:07:23] Jeanette Tan: Exactly.

[00:07:24] Drew Thomas Hendricks: Mini AMS.

[00:07:25] Jeanette Tan: Correct. And they weren’t using the features built into QuickBooks. The second big mess that I see is in the costing. So the costing is really, is very complicated because the l, the production cycle for wine. It can span three calendar years. You have the year of harvest then you have a year of aging, and then you have a year of bottling and you have to carry those costs through that entire cycle. And then to make matters more complicated. There’s what we call true cost. Which is the correct way of carrying all those costs, but then there’s also tax costing. So how the costs show up in your tax return follows a different set of rules than the cost that you carry in your books. We recommend, well we strongly recommend that you use this true cost in your books because that’s how you have your true profit loss report. You can’t manage the business if you have tax cost in your books.

Tax cost is fine to file your tax return, but you need to manage your books with true cost. And this is a very challenging issue with people. And yeah, it’s a lot easier to track your cost with tax cost, you’re gonna get very wrong numbers.

[00:08:44] Drew Thomas Hendricks: Yeah. It’s hard to figure out where you need to go.

[00:08:46] Jeanette Tan: Well, it’s also, you’ll actually get fatal numbers. You’ll make wrong business decisions if you’re using tax costs.

[00:08:52] Drew Thomas Hendricks: That’s very ominous. Fatal numbers.

[00:08:54] Jeanette Tan: Yes. Yeah. and I’ve said

[00:08:56] Bianca Harmon: She doesn’t sugarcoat anything.

[00:08:58] Jeanette Tan: Yeah, no, I’ve seen some wineries suffer because they were basing their pricing strategy on tax cost instead of basing it on true cost.

[00:09:10] Drew Thomas Hendricks: So a hypothetical example is they’re pricing their wine at $20 a bottle because that’s what tax law is saying. Tax law saying, but it should be more like 40, something like that. Yeah. Oh my gosh. So that could easily sink you and you think you’re doubling your, you think you’re extremely profitable and you’re not.

[00:09:28] Jeanette Tan: Exactly. Exactly.

[00:09:30] Bianca Harmon: Wow.

[00:09:31] Drew Thomas Hendricks: So that’s a huge unmet need that you came into and all these wineries just kind of bootstrapping themselves up through QuickBooks was kind of how you built QB Winery solutions.

[00:09:39] Jeanette Tan: Right? Exactly. Exactly. Yeah. So we’re just trying to get the message out there that we exist. So not in addition to the CFO services that I offer, we also have courses on our website.

On how to set up QuickBooks. We call it The Fundamental Five and we have a course on the costing called the Costing Book Checklist Course. We actually walk you through step by step exactly how to do the costing. And the small wineries, our ideal customer for our courses is a two to 3000 case winery. It’s usually owner doing the bookkeeping. We call them the reluctant bookkeeper. They like to do it because they, they can put their finger on the pulse of the business by doing the bookkeeping themselves. But their business isn’t so complicated that they can’t do it. It’s, I like that size of business. I think a small winery, doing 3000 cases, a hundred percent DTC can do really really well. They can have a nice streamlined operation. Once you get into the like, 10,000 case, 10, 12,000 case. You’re into a lot of staff, a lot of complications.

[00:10:47] Bianca Harmon: So you’re wineries are basically coming to you and almost contracting you out to do their finances?

[00:10:53] Jeanette Tan: We supervise them. One of the things that sets us apart from most accounting firms, we prefer to teach people how to do the day-to-day bookkeeping. We’ll come in and review the file, make sure it’s clean, talk to them about anything new that that showed up, you know how to handle that.

And then we’ll review their financials and give them, our opinion about how things are going. Because I only work exclusively with wineries. I know what the trends are, I know what the ratios should be. So we teach people how to do the day-to-day stuff. We prefer that they do that, and then we’ll come in and support them in that work.

[00:11:37] Drew Thomas Hendricks: Sure.

[00:11:37] Bianca Harmon: Love that.

[00:11:38] Drew Thomas Hendricks: Does that tie into The Fundamental Five Course that you have?

[00:11:41] Jeanette Tan: Yeah. The Fundamental Five is all.

[00:11:43] Drew Thomas Hendricks: Talk to me about that. I’m really intrigued about that.

[00:11:45] Jeanette Tan: Sure, so the Fundamental Five is our system. So there’s five things that need to happen in the QuickBooks file.

In order to create a system that works for a small winery. So first of all, you need to have an effective chart of accounts. That means an organized chart of accounts. You need to track your sales by class. And what’s unique in the wine industry is that you have all these different sales channels with very different margins to sell your wine through. And so it’s really important that you track that, so that you can see what your gross profit is. What each of your channels is generating in gross profit. The third is set your inventory up correctly. And this is the area that people tend to make the biggest mess.

QuickBooks actually has a really good report that tells you what your, how much inventory you have on hand. When I show this to people, they’re like blown away that that even exists, but you have to set up the inventory correctly. And most people make a mess out of that. The fourth is, you need to use the right method to integrate your point of sale system.

Now by integrate, I don’t mean it an electronic integration, it’s usually a manual integration. We have two different ways of doing it, and it all depends on the tools and the, and what’s available in the point of sale system. So for example, there’s the push in where every sale that happens in your point of sale system ends up in QuickBooks. And then the other is called the summary method, where you usually at the end of every month you pull some reports and then enter that into QuickBooks. And again, it all depends on the point of sale program that you’re working with, and the skill level of the staff that you have available. But you have to do that. You have to have that point of sale information. There’s some, somewhere some people think that an industry standard is to simply take your credit card charges for the day and call that your wine revenue. And that is so wrong cause you have no idea what you’re selling.

You’ve got mixed in that number. You’ve got merchandise, you’ve got sales tax. You’ve got shipping, so you have no idea what you’re actually doing.

[00:13:49] Drew Thomas Hendricks: How often do you see that happen? Is that what like one of the biggest like.

[00:13:53] Jeanette Tan: Oh, it’s still happening out there. It’s still happening.

[00:13:55] Bianca Harmon: What?

[00:13:56] Jeanette Tan: Oh, yeah. It’s still happening out there. So for example, when lockdown first happened and the tasting rooms closed and everybody panicked, we were able to generate financials for our clients so lockdown was March they had April, we were able to generate financials the first week in May to show everybody that they had all successfully pivoted to an internet, the internet class.

And they were actually doing really really well.

[00:14:24] Drew Thomas Hendricks: Wow.

[00:14:25] Jeanette Tan: And our clients were able to sleep a little bit better. And as as that year progressed, 2020 progressed, we were able to get financials on a regular basis to show them, because you’ve pivoted to the internet class and your club members, the club members all, all came out and supported the wineries.

They even though the,

[00:14:44] Drew Thomas Hendricks: So when you say internet class, you gave them a, like before they were just booking in-store sales and they would have some online sales, but you created a separate

[00:14:51] Jeanette Tan: Yes. Yes.

[00:14:52] Drew Thomas Hendricks: So explain what class is like. So it’s a?

[00:14:54] Jeanette Tan: It’s a channel, it’s sales, sales channel, right?

Yeah. So we see the sales that happen in the tasting room as separate from the sales that happen on the website. And then you also have another class or channel as your wine club. And then you have distribution and wholesale. And those,

[00:15:12] Bianca Harmon: Cause they had no tasting room staff and they had no tasting room revenue, it just became an online.

[00:15:19] Jeanette Tan: Right, they were able to successfully pivot to the online. They more than replaced their tasting room staff, their tasting room sales, and their distribution and wholesale sales completely dried up. But those margins are really low anyway.

[00:15:33] Drew Thomas Hendricks: Okay.

[00:15:33] Jeanette Tan: And so the excess sales that they had in the club and in the tasting room and in the website, more than made up for the sales that they lost in distribution and wholesale. And we were able to show people that they were doing just fine, because we had this system already set up in place. And because we were able to integrate this information into, with the point of sale system. So the last step in the final in the steps is you gotta track your samples. So we’re in the wine industry, we give away wine. It’s what we do. You know, if we were in the master’s mattress industry, that would not be the case.

You have to have a mechanism to capture your sale, your samples, and all the freebies and enter them into the system so that your inventory is correct. But you also need to track it. So obviously you’re not, reporting the revenue for it.

And that actually is another channel that we have. So another class in QuickBooks will be your samples and depletions.

[00:16:30] Bianca Harmon: Well, and donations probably are included in that as well and that’s a huge thing with wineries is donations, right?

[00:16:36] Drew Thomas Hendricks: I wanna step back for one second on something you said earlier about how it’s not always necessary like most of this, when you’re you got your POS and you got your QuickBooks, and a lot of times it’s manual.

I think the vision of everyone is this like seamless everything syncs everything.

[00:16:53] Jeanette Tan: Oh yeah.

[00:16:54] Drew Thomas Hendricks: And the it’s not, sometimes it’s not necessary.

[00:16:58] Jeanette Tan: Exactly.

[00:16:59] Drew Thomas Hendricks: All this seamless, all this worry about everything sinking in real time kind of complicates it to the point that you lose the data.

[00:17:06] Jeanette Tan: Exactly. That’s absolutely right. Everyone has this holy grail concept of everything all integrated and that’s, it’s not the case. It just takes one engineer to decide he’d rather he wants to change something and the next thing you know, the thing is broken. So, we have a better, it’s often faster just to do the manual integration.

And to figure out how to do the electronic integration.

[00:17:31] Drew Thomas Hendricks: You just need the right SOPs, and then you help the winery set up these operating procedures where it’s not that cumbersome.

[00:17:37] Jeanette Tan: Exactly. Exactly. And so that’s where our SOPs come into place. We have documented SOPs for all the basic procedures that need to happen in the wine industry so that people can make notes about whatever’s specific to them.

And then when there’s, someone new in the office. You’ve got these documented so you can hand them off to the next person. So you have consistency through, you have consistency instead of having to start all over from scratch and that makes and break it.

[00:18:06] Drew Thomas Hendricks: Yeah. That makes so much sense and I spend so much time talking to our clients about, they want everything just this holy, like I said, holy grail of integration. But when one thing breaks, everything breaks.

[00:18:17] Jeanette Tan: Right?

[00:18:17] Drew Thomas Hendricks: And then suddenly you’ve got a much bigger situation. A lot of the client’s budgets don’t really allow for that.

You need really a whole lot of full-time. So when you’re talking about these integrations and these manuals and stuff, what’s the sweet spot for like a Commerce7 for example or a WineDirect? Like a POS, like if you say we have a winery that has a Commerce7, POS integration. And they want to put it into QuickBooks.

[00:18:40] Jeanette Tan: Yeah. Well, there actually for both WineDirect and Commerce7, there actually is a tool that works really really well. It’s called the WGITS made by WineGlass Marketing.

[00:18:50] Drew Thomas Hendricks: Oh, yeah.

[00:18:51] Jeanette Tan: And that tool, we’ve been using it, well, for whatever reason the last couple years. We’ve been able to move a lot of clients onto it, and it works really really well. So there is a pretty tight integration

There is one now. It wasn’t always the case but there is one now. It works with a couple of other programs as well. But Commerce7 and Wine Direct, they started with WineDirect. And WineDirect works.

[00:19:13] Drew Thomas Hendricks: Sure. And that’s great and it leads me to talk about tools and QuickBooks in itself was never built to be a vertical solution for the wine industry. Out of the box what more has to be added for a winery to kind of successfully use it.

[00:19:26] Jeanette Tan: It really just needs to be set up correctly, one of the beauties of QuickBooks is its flexibility, but inherent with the flexibility means you can also make a big mess. So, you wanna set it up correctly, and that’s where our Fundamental Five Course comes into play.

Theres actually two tracks in the course. One track is you have a Virgin QuickBooks file, this is what you need to do to get it set up. The other track is okay if you already made a mess. This is how you clean up that mess. Yeah.

[00:19:54] Drew Thomas Hendricks: So talking about a mess. So imagine a hypothetical winery that’s been operating for five, six years and they kind of bootstrapped it up, kind of put it just enough information into QuickBooks to pay the bills. And they can’t figure out what’s going on. But now there’s so much legacy data and it’s just a mess. How do you straighten that out. Do you start over or? Go back through five years of data.

[00:20:15] Jeanette Tan: No, usually we wanna keep it because they have customer information and they’ve got vendor information. The big, the mess typically is with the inventory with the case goods. And a common mess is people are not consistent using the unit of measure. So when you say one in QuickBooks, you that has to mean either one bottle or one case.

You can’t go back and forth. So, you know, we get that straight, we get them to, get the quantity on hand updated correctly. And then we get them to put the cost incorrectly. And so we can do that without scrapping the whole file.

[00:20:54] Drew Thomas Hendricks: Well, that’s good to hear. Now, now when wineries come to you from a hu this is more of a human aspect. There’s gotta be some sort of pride. Do they realize how messed up their books are and how do you let them know that you’re gonna solve their problems without making them feel like complete idiots?

[00:21:08] Jeanette Tan: Oh no. They usually come to us saying, oh, I’m so sorry. It’s a big mess. And we we’ve seen it all. And my team and I, we specialize in speaking their language. You know, we try not to use accounting terms as often as possible so that we can really help them. And you know, what’s been really cool about the Zoom lately is that everybody’s familiar with Zoom now. And which really helps us to just jump right in there, when they have a problem, we can jump on a Zoom call and walk them through fixing it.

[00:21:44] Drew Thomas Hendricks: And tell me about your team. So you’re the head, but how big’s your footprint right now?

[00:21:48] Jeanette Tan: Well it’s still, I have a team of all part-timers, all remote part-timers. We all work remote.

[00:21:53] Drew Thomas Hendricks: Oh, that’s smart. We’ve been fully distributed since 2014. I sat around the office one day and all these, everybody’s with their computers and everybody’s IM’ing each other in between the computers. No one’s talking, they were already remote even though they were in the same office.

[00:22:08] Jeanette Tan: Yeah. Yeah. Well it started out, I mean it was just me, at the very beginning. And I was working on site, you know? People would have to, if someone in Napaneeded me, it was like, well I can, I’ll be out in Napa next week and I would do the rounds of my clients in Napa. And then gradually, I just got busier and busier. So I, I asked folks if we, if I could, if I could do a remote session with them. Well once they did the first couple of remote sessions, they’re like, “Well this is better than waiting for you to come out.” And so I hired one crew member to help, one accountant to help me. She’s still with me. God bless her. And we’ve just added team members since then. So I now have two accountants that work with me.

I have an admin supervisor, she’s our SOP specialist. She focuses just on documenting procedures, which is what it takes. It takes a certain focus to be able to get that done. And then I have an assistant who helps me with all of the other stuff, trying to keep my inbox clean and you all that. All that, oh yeah. All that random stuff.

[00:23:12] Bianca Harmon: So, I have a question. We’ve been talking about your courses. But I wanted to kind of ask about your membership, so it seems like you base to it’s like a membership when they come in with you, right? And you have different tiers and

[00:23:26] Jeanette Tan: Yeah, so the membership is a, so we have the courses we found, we we used the membership in the back in the day.

The membership included the courses, but the courses became more complex and we found that a lot of people just wanted the courses or they just wanted the membership. So now we had a divorce between the courses and the membership. So what the membership provides, especially it’s service really aimed at the small wineries.

It gives them CFO services in a group setting. And so we have office hours. once a month we get on a call and they throw their questions out and I’ve got my sample file and I show them how to get around it. And we talk about, we talk about whatever problems they’re facing them. They also have access to a Q and A forum where they can pop questions in between office hours and we have a, what we call the learning library, which is a library of all of the videos and all the mini courses that we’ve recorded over the years. So they have a huge array of videos that they can watch on various topics.

[00:24:33] Drew Thomas Hendricks: Are the members able to help each other too? Is it like a mastermind set up or are they cohort office hour.

[00:24:39] Jeanette Tan: That is a goal that we’ve been trying to, that we would like to get to, but we haven’t been able to create that synergy yet. Every now and then when we have an office hours, I have had folks, I knew that one guy had experience with something that someone else.

You know how to question about, so rather than my explaining I say, “Hey George, why don’t you tell Sam about yada ya? It would be fun if we did have that, kind of community thing going, but we haven’t got that yet.

[00:25:09] Drew Thomas Hendricks: I think that’s a great idea. I think that’s a great idea. You talk about your library of videos and stuff that’s the members have access to. What’s one of the most popular ones that has the most views that people seem to find the, the most value from?

[00:25:21] Jeanette Tan: I would say the bottling video because bottling only happens once or twice a year for the small wineries, and it’s really common to forget how to handle bottling.

And there’s three different ways that you can handle it, depending upon the size of your wine winery and the outcome that you want.

[00:25:38] Drew Thomas Hendricks: Well, so that goes way beyond just setting up QuickBooks, telling ’em like which bottling, system to use or how to

[00:25:44] Jeanette Tan: Yeah, which will actually what method to record the bottling information for QuickBooks. Yeah. So whereas The Fundamental Five is all about setting up QuickBooks. Once it’s set up, then you can add on all these other kind of tricks and workarounds and how to do things on top of that. Yeah. I mean we also get into how to read the financials.

You know, what you look for. What’s the value of the gross profit? why is that important? A small winery can dramatically improve their bottom line simply by shifting the sales in their sales channels. They don’t even have to make more wine. So the same 3000 cases, once you start shifting it more and more into direct to consumer, you’re gonna beef up that bottom line considerably.

[00:26:31] Drew Thomas Hendricks: Sure. Yeah, talk about beefing out the bottom line and trends. And I know you’re not, you can’t talk about specific clients, but you must have just this wealth of aggregate data. What trends have you seen like coming out of post covid with some of these wineries with their financials and the health of the industry?

[00:26:48] Jeanette Tan: Well, so COVID just happened to exacerbate a trend that’s been happening in the wine industry where the tasting room traffic has been slowly decreasing. The traffic has to do with, the traffic decreasing has to do with more and more tasting rooms out there.

It also has to do with a change in the demographics of the wine drinkers. The baby boomers who are the ones who fueled the current wine industry. They are aging out and the next generation isn’t drinking as much as the baby boomers were. So there was a trend in Rob McMillan at Silicon Valley Bank has been documenting and talking about this trend for the last couple of years in the Silicon Valley State of the Wine Industry report that they publish, the early part of the year. He’s been talking about this trend where the traffic is going down. And then we got covid, which completely obliterated traffic and tourism and what’s interesting is that some of the outlying regions, like Santa Barbara and El Paso, they’re actually doing really well.

Because they’re closer to LA or their, people are going to those areas because they’re closer to the home rather than coming all the way up to Sonoma County and Napa.

[00:28:01] Bianca Harmon: I also think their wineries are set up differently down in Paso in LA versus Napa.

[00:28:08] Jeanette Tan: In what way?

[00:28:09] Bianca Harmon: In somebody that was, lives in St. Helena and goes. They’re more fun.

[00:28:16] Drew Thomas Hendricks: Hospitality.

[00:28:17] Bianca Harmon: They’re more fun, they’re more gauge to what these people want. When you come up to Napa, it’s still very gauged towards the very. People don’t feel as included when they come to Napa. They don’t feel like they are, that they’re just gonna be kicked out the door. And these wineries in Paso and Temecula and Santa Barbara, they’re like, “Come on in. We want everybody.” And it’s Sonoma unfortunately has, my fiance and I were just talking about it the other day. Sonoma used to, you would go over to Sonoma to get away from the Napa. And Sonoma now is unfortunately bright in that trend as well, price-wise and everything. So

[00:29:00] Jeanette Tan: Price-wise, yeah. And the, they’re all charging, you know, not only tasting fees, but big fees for the experiences.

[00:29:06] Bianca Harmon: Exactly.

[00:29:07] Jeanette Tan: I completely agree that, you know, that is a trend that’s been happening. So, yeah. I don’t have a client exactly in Santa Barbara and Paso, but I have folks who work down there and I know that they’re staying nice and busy. But in general, the shift that I see since Covid is, the strength of the website sales. COVID taught folks that they could buy wine through the internet. And I am seeing some wineries with a lot of success, really putting their, a lot of attention into that channel.

[00:29:39] Bianca Harmon: So do you have, do you talk about that in your courses at all? Either the importance of investing in as that’s what we do, is the importance of investing into a good website and good softwares and good all of this. Do you talk about that?

[00:29:54] Jeanette Tan: Well, we touch on it. You know I touch on the importance of having a strategic plan. For each of these channels, one guy talked to me, said “Why do you have so many channels? Why not just have one DTC?” And I said, “Because there’s different resources behind every single channel. And so there’s a different strategy behind each one. And if the tasting room, traditionally the tasting room traffic is what grew your wine club? Well if that traffic is down, then your club isn’t gonna grow as much. So if you’re gonna have kind of flat or low growth in your tasting room in your club, that means your growth needs to come out of the website sales or maybe virtual tastings.” And what are the opportunities, what’s the strategy around building that? I mean I that’s as far as I go because I’m an accountant, not a marketing person. Yeah. But how they do it

[00:30:43] Drew Thomas Hendricks: From an accounting standpoint. This is a question, I’ve been waiting to ask this for quite some time. When you’ve got a winery that’s three to three to 10,000 cases, and they’re shifting in a certain percentage of their sale, what percentage of their revenue should be spent on like digital improvements in website sales, if that’s their primary source of income coming in?

[00:31:02] Jeanette Tan: Oh, actually I don’t have any statistic.

[00:31:05] Drew Thomas Hendricks: It’s kind of funny though. Cause you see some, there’s no rule of thumb that are selling 10,000 cases. Some of it’s online, they want to grow online, but they’ve got a budget of like $500.

[00:31:14] Jeanette Tan: Yeah. Can’t

[00:31:15] Drew Thomas Hendricks: It’s like, that makes no sense.

[00:31:17] Jeanette Tan: Exactly. Well, the thing about the online sales is that you can exactly track that your dollar spend. And have an expectation for return. I mean, I love the old adage of the business owner says, yeah, I spend $2,000 a year on my marketing and I know half of it works.

The problem is I don’t know which half works. But with online marketing, you can tell exactly if something is successful. And that’s why it’s such a useful channel. You can’t really tell with all the other things that you do what’s really driving traffic into your tasting room?

Is it the, was it really the, the placement at that restaurant? That where you get the pours? Is it the brand recognition through your distribution sales. Who knows? You don’t know but with online marketing, you know exactly what’s working.

[00:32:11] Drew Thomas Hendricks: Let’s talk KPIs for a moment. What sort of KPIs are you encouraging your wineries to track, and what sort of metrics are should they be shooting for?

[00:32:20] Jeanette Tan: Oh, great question. Great question. Well, we always track the percentage of not only case sales, but gross profit by channel. We track average case sale. By channel and average cost of goods by channel. Cuz it’s not at all unusual for a winery to have different wine targeted, created for distribution with lesser grapes and cheaper glass. And they may have a reserve bottling for their club members. So we track average case sale by channel.

And that’s really interesting to watch that that’s actually grown. What we are seeing, even though traffic is down in the tasting rooms, the average case sale price is up. And the average sale per person, per visitor is up. There are people who are showing up, are spending more money and enjoying themselves more. It’s an interesting trend. So even with some clients, I’m seeing the total case sales is down. But the gross profit hasn’t missed a beat. Because they’re selling it at a higher, they’re able to sell it at a higher dollar price.

[00:33:23] Drew Thomas Hendricks: Are there any, KPIs that you see wineries using that you just wish they’d just stop? Cuz don’t really work or they’re not

[00:33:29] Jeanette Tan: Oh, oh, absolutely top line revenue. Top line revenue tells you nothing. It’s gross profit. Which is your revenue minus your cost of goods, that’s your gross profit. That’s the number you need to track. It doesn’t matter cuz you can go and sell a palate to distribution. Yeah. Whoopee. But a small winery because their cost of goods is so high, you know they’re a small winery cannot make the wine at the same price that a cost that a large winery. There’s just, it’s a craft beverage. It’s,

[00:34:02] Drew Thomas Hendricks: Yeah. They don’t have the economies of scale that are

[00:34:03] Jeanette Tan: Exactly, that’s the term. Yeah. Yeah, so you have to look at your margins. And the margins that the small wineries have on their distribution sales is negligible.

[00:34:13] Drew Thomas Hendricks: So they’re bragging that they’re making 2 million a year, but they’re of gross revenue. But they’re net profit is negative 30,000.

[00:34:20] Jeanette Tan: Exactly. Exactly.

[00:34:22] Drew Thomas Hendricks: Like, where’s the money? I’m making two.

[00:34:23] Jeanette Tan: Yeah, where’s the money? I know it’s coming in well. What’s your gross profit?

[00:34:29] Drew Thomas Hendricks: Going forward into the future? So QuickBooks evolve, has evolved so much. What would you like to see in QuickBooks as they roll out their improvements?

[00:34:37] Jeanette Tan: Well, the desktop program has pretty much evolved as much as it can.

[00:34:44] Drew Thomas Hendricks: Are you putting most people into QuickBooks online or still on desktop?

[00:34:47] Jeanette Tan: No, we prefer to keep people in desktop. Oh. If they need a remote solution, we can put them on a remote server.

And we have another tool that works really really well. It’s called Qbox. It works like Dropbox, but it’s specifically for a QuickBooks file and allows you to very economically share a file in different locations. QuickBooks online is missing some really important tools that we like, that are really useful for us. Oh, there’s some reports that are missing, like for example, a sales by channel report. Well, actually okay, so they, yeah. Anyway, the report I’m thinking of the, that’s the, yeah, the sales by channel. That one you can get some of the formatting on the reports is clunky. Some of the other, this one particular budget report, they don’t have. So the budget report that we really like has, lets you see the results in the current month, your actual against budget and then the variance, and then year to date. And then there’s also a column for your annual budget.

Cause a lot of costs are seasonal. So it’s nice to know where you’re headed with that. That report doesn’t exist in QuickBooks online, and that’s our go-to management report. But however, I will say we will put a small winery on online if it’s the owners doing the bookkeeping. Because the bank sync with QuickBooks online in, is really really good. And that actually does save them a lot of time. But once they get much beyond, you know the solo. Once they start having staff and things like that, then it’s just not just can’t keep up. Yeah. I mean, like

[00:36:27] Drew Thomas Hendricks: Where would you like to see the desktop grow if it’s kind of reached its apex?

[00:36:30] Jeanette Tan: Well, the problem is it’s not developing the desktop program anymore. They’re putting all the resources in the online program, and yeah there’s a couple of funky things that we wish they would fix. But it really hasn’t significantly changed since 2011 was really the last big change that happened in desktop.

[00:36:51] Drew Thomas Hendricks: Well, finances haven’t changed too much since 2011 either, so yeah. Accounting still pretty much counting there. Talking about from 2011 all the way to 2022, how do you stay motivated and what excites you about this industry?

[00:37:05] Jeanette Tan: Oh, I love the people in the industry. They’re so interesting. Everyone got into the industry, well especially among the small wineries, because they love wine and they love food. And I could tell when I was a kid, we used have dinner parties. And we would serve wine. We’d raid my parents wine cellar and we’d have wine. And I could tell that the parties that you have when you’re having, when you’re sitting around a table and having, sitting around a table with wine and food, it’s a different kind of gathering than when, you know, you’re a kid and you’re just sitting around drinking. And the people in the wine industry know that. And so I love the, I love the people love hanging out at wineries, walking in the cellar and that smell.

[00:37:52] Drew Thomas Hendricks: Oh yeah. Oh man. Yeah. There’s nothing like a cellar smell. So kind of as we’re wrapping down, is there any shout outs you’d like to give to someone?

We’re all about gratitude here.

[00:38:01] Jeanette Tan: Oh, sure. No thanks. Yeah. Well, got a shout out to my, shout out to Team Kokomo and Eric Miller. That’s where I got my start doing this kind of work. And then Anisya Fritz over at Lynmar Estate. She’s been a huge fan of mine. Big supporter from day one. She’s the one who got me teaching over at Sonoma State and of course Ray Johnson over at Sonoma State Wine Business Institute. Wouldn’t be here without those three people.

[00:38:27] Bianca Harmon: Eric Miller, he was on our pod. His episode should be coming out pretty shortly, actually.

[00:38:33] Jeanette Tan: Awesome, awesome. Yeah. No, there’s.

[00:38:35] Drew Thomas Hendricks: We had a great conversation with Eric.

[00:38:37] Jeanette Tan: They have great t-shirts, so if you’re ever up in Dry Creek Valley, you gotta go in and get a t-shirt, they’re really good. In addition to of course, great wine. I mean, what can I say?

[00:38:47] Drew Thomas Hendricks: Go for the t-shirts doc. Stay for the wine. Yeah, there you go.

[00:38:54] Jeanette Tan: That’s a good logo.

[00:38:56] Drew Thomas Hendricks: Oh man. Jeanette, this has been awesome. Is there anything else you’d like to talk about before we wrap up?

[00:39:01] Jeanette Tan: No, I think you did a great job moving me around the whole kind of landscape of what we do.

[00:39:07] Drew Thomas Hendricks: Yes. It was fascinating to take a deep dive into kind of small winery finances and how they can use QuickBooks. Where can people find out more about you and QB Winery Solutions?

[00:39:17] Jeanette Tan: Yeah, you can go to our website www.qbwinerysolutions.com. And you can find all about us there.

[00:39:24] Drew Thomas Hendricks: Awesome. Awesome.

[00:39:25] Bianca Harmon: Well, thank you.

[00:39:25] Drew Thomas Hendricks: Thank you so much for joining us today.

[00:39:27] Jeanette Tan: No, thanks for having me. Appreciate it. Yep.

[00:39:29] Drew Thomas Hendricks: You have a great day.

[00:39:30] Jeanette Tan: Yeah, you too.