6,000 receipts per month and only one accountant: The secret behind Snocks' lean processes
It all started in 2016 with the idea of selling socks sourced from Asia on Amazon. Today, Snocks is a popular fashion label selling a wide variety of bare essentials on their own online store. The team, which now has more than 60 employees, is on the fast track to growth and success.
- Rapidly growing number of receipts
- Lack of overview of orders and releases
- Manual processes for all outputs
- Digital document capture with automatic payment reconciliation
- Employee cards with clear approval processes and cost centres
- Smooth holistic expenditure workflow
Just do it, dare to take the plunge. These phrases keep coming up when we talk to Snocks co-founder Johannes Kliesch. He dared to put all eggs in one basket and gave up his dual degree course in business studies to focus entirely on his own business. "Since then, things have been going very very well," the CEO says with satisfaction. But as sales records kept growing, so did the financial chaos. Until the current Team Lead Finance Rehan Choudhry took over and streamlined the financial processes.
From the beginning, the demands on the finance team were big, Johannes says. In just the second month after Snocks was founded, Johannes and cousin and cofounder Felix Bauer got a loan for 50,000 €. "We were immediately in demand and challenged." The way accounting was handled, however, wasn’t ideal, Johannes recalls. "I was really bad at it, and Felix was rather average."
Growing business, growing pile of documents (aka chaos)
With a rapidly growing business, the team incurred more and more expenses. New merchandise, IT equipment, marketing costs - thousands of transactions quickly accumulated, all of which were paid with the traditional company credit card. All in all, a difficult situation for Johannes, who was solely responsible for the accounting in the early stages. "Even back then, my heart beat stronger for sales and marketing and not as much for small-scale financial processes."
"Many underestimate the potential consequences of not being able to submit financial statements on time or submitting incomplete statements."
Over time, the accounting responsibilities at Snocks passed through various hands in the company. It became increasingly unclear who actually placed which orders and where the corresponding receipts had gone. "At a certain point, it actually felt like looking for a needle in a haystack. To give this issue such a stepchild treatment was one of our biggest mistakes" says Johannes. "It was a mess."
When Rehan Choudhry, Team Lead Finance, took over in 2019, the first thing he did was clean up the accounting department. Quite a mammoth task, he recollects today. "When I worked on the first annual financial statement, our tax accountant handed me ten A4 sheets of missing receipts. There were so many that I could only guess what the exact number was." His first few months at Snocks were mostly about tracing receipts, clarifying and allocating past expenses. It was a huge time commitment that ended up delaying the year-end closing. "A lot of people underestimate the potential consequences of not being able to submit financial statements on time or completely." Fortunately, it didn't get that far, because Rehan delivered.
Soon, Rehan had built a robust finance team that succeeded in ending the receipt chaos permanently. With a consistent process for all expenses, they were able to ensure that all key financial data was flowing in digitally during the year. The team wanted to find answers to many key questions: Who should be allowed to place orders? Who needs to approve them? What kind of an expense workflow suits us? And what payment method should employees use?
The traditional company credit card has had its day
Johannes remembers the day Moss was introduced as the new spending solution. It was just a regular day for him at the office. He searched his wallet for the company credit card he had at the time - but it had disappeared. He was puzzled until his cousin and cofounder Felix resolved the situation. He said he had cashed in the card. He immediately provided a reason: "All these receipts are so annoying! Here you go, now you have a Moss card." That was in February 2021.
Growing business, not growing accounting hassles
Since then, the processes around expenses have improved noticeably. That's also reflected in how lean Snocks' finance department is - despite its tremendous growth. "We really only have one person for accounting, even though we now have up to 6,000 transactions a month," Rehan says. "Without Moss, we’d need at least two or perhaps even three people scanning and submitting receipts all day."
"We finally found a solution that fit the exact needs of our rapidly growing e-commerce concern." What hasn't quite worked out to this day, on the other hand, is the former company credit card. "Where that has gone, no one here really knows," says Johannes. "But that doesn't matter; it shows how satisfied we are with Moss." With Moss, the founders could safely have the card canceled for good.
"We really only have one person for accounting. Without Moss, we'd need at least two or three people."
Solo accounting turned into teamwork
The great thing is being able to share a lot of the bookkeeping tasks with the team, says Rehan. Everyone on the team now has their own credit cards and can simply photograph the receipts or just email them. All employees are responsible for their own orders and submit their receipts conveniently via Moss. Accounting therefore has all the data digitally in one place. At the end of the month, all receipts are automatically sent to the tax accountant. Snocks is now better prepared for the 2021 financial statements than it ever was in the past. And this, despite the fact that the number of receipts has increased to between four and six thousand a month.
Thanks to the reminder function in Moss, invoices are rarely lost today. "We receive a friendly reminder on Slack every Monday," says Rehan. "You can see exactly who hasn't submitted their receipts yet and by when they’re needed. That's our 'wall of shame.' It just runs automatically and simplifies our work."
A piece of freedom for the pocket
It's not just the accounting that the duo appreciate their expense solution for. It also provides additional motivation for employees. At Snocks, they do a lot to be a modern employer encouraging all team members to live a life full of freedom. "With Moss, we have the opportunity to put a piece of freedom in everyone's hands - whether in physical or virtual form. Having your own company credit card in your wallet or on your screen creates a sense of belonging." No one at Snocks today has to be dependent on anyone else to get a train ticket or a software subscription, for instance. Everyone can make their own decisions about spending, up to a certain amount. "That's a great freedom we want to continue giving our people.”