Our 4-Step Custom Process – Optimal Cash Flow Case Study

July 7, 2022

Case Studies

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For this cash flow case study, I want to introduce Max Sher of the Sher Agency. Max runs a design agency that designs and maintains high-converting WordPress websites.

When Max first came to Leo & Vern, he was struggling with cash flow issues. He was making plenty of sales but somehow when it came time to pay his contractors, staff, and bills the money didn’t seem to be there. He hadn’t even been able to pay himself in a month. He was frustrated and knew that he needed a solution – and fast! Max signed up for our monthly bookkeeping services.

Max already had bookkeeping services through Bench and received their regular monthly reports. Unfortunately, those reports didn’t really tell him what he needed to know. Where was all his revenue going? He knew he needed something different so he hired us.

Leo & Vern Custom Process in Action – Step 1: Analyze

The Overview:

The first step in the Leo & Vern Custom Process is to analyze where all the money is. Where it is coming from, where it goes, and why.


Our first step involved looking at what Max was currently using for bookkeeping. He was using:

  • Bench for bookkeeping
  • Wave for invoicing
  • Memberpress for subscriptions

Banks/Payment Processors

He also had money coming and going from:

  • two different checking accounts
  • a credit card
  • Stripe
  • PayPal
  • Upwork

With all that coming and going it was hard to keep track of what was where.


Max was also paying contractors through a variety of methods:

  • Two payroll employees on Gusto
  • Two contractors on Gusto
  • Other contractors on Wise
  • Other contractors on PayPal
  • Other contractors on Payoneer

The contractors and employees were all running slightly different pay schedules and it added to the complexity of knowing where his money was going and when.

Revenue Streams

Next, we looked at revenue streams. Max had revenue streams that included:

  • Website builds from Upwork
  • Website builds from his own private agency
  • Website maintenance subscriptions
  • One-off projects

For each of these types of revenue streams, there were a variety of different payment plans, prices, and options for payment

One of Max’s main priorities was that he wanted to keep the ability to custom price his packages when he was selling to clients. He felt strongly that this gave him an advantage and he wanted to maintain that leverage when he was on sales calls or working the in DMs with potential clients on Upwork.

What impact was it was making in his business:


First, by having Bench complete his bookkeeping (they happen to use proprietary software) he couldn’t dig into his own books when he needed to. He had pieced together the rest of his financial picture with the Wave invoices and Memberpress but knew that he didn’t have a “clear picture” of what was really going on.

From our first conversation, Max said that he needed to see more clearly what was happening in his business.

Bank/Payment Processors

His multiple bank accounts were also making his life a bit more complicated. He admitted he just hadn’t gotten around to consolidating his former business checking account with his new one. We identified that having money spread all over makes it harder to see what is really happening because there are so many moving parts. The Leo & Vern strategy is that simpler is better.


Max’s expenses were run-on autopay (something I applaud), but it had led to a bit of a disconnect since he wasn’t able to really see inside his books what those expenses really were. He would see the totals on his monthly reports but couldn’t take any action on them because he couldn’t drill down to the specifics.

Revenue Streams

Max frequently had delays in when the money from his projects came in. As a web designer he had based his payment structure on deliverables, a widespread practice. When certain parts of the process were completed then the next payment was due. Seems like it makes sense, right?

But what was happening was that his payments were getting delayed through no fault of his own, but because things would come up on the client’s end. Photoshoots would need rescheduling, copywriting wasn’t completed, etc. If you are a web designer, I’m sure you feel his pain. It was frustrating because it was affecting his company, but it was out of his control.

Our action plan became clear. We moved on to customizing Max a solution designed for his specific business.


What Max wanted more than anything was a cash flow forecast. He wanted to be able to see immediately, how much money he was expecting to bring in and when and what was going out and when. When he started working with Leo & Vern, he had nothing like this. He was getting the standard balance sheet and profit & loss report from Bench. It told him next to nothing that he needed to know to help him solve his cash flow problem.


Leo & Vern Custom Process in Action – Step 2: Customize

Bookkeeping Solution

We started by consolidating his bookkeeping system from 3 systems to 1. Instead of Bench (inaccessible), Wave (free but not connected), and Memberpress (nice but siloed); he now has Xero.

All his financial data in one place, including invoices and subscriptions. We kept the Memberpress active and simply connected the subscription feature he was keen to keep active on his website to Xero. Simplifying is a key aspect of our custom process.

One system to rule them all.

Bank/Payment Processors

Next, we connected all his bank accounts, credit cards, and payment processors to Xero. With automatic updates and the ability to then categorize things to his custom chart of accounts (fancy CFO speak for list of categories in your business finances), this created one streamlined system to account for every single financial transaction in his business.

We discussed going down to only one business checking account, but he wasn’t quite ready and that was fine. While we give advice here at Leo & Vern, we don’t give orders. It’s YOUR business.


We went through all the expenses with a fine-tooth comb to create a custom chart of accounts that tracked key expenses that Max was concerned about. Once we had our key categories the team at Leo & Vern went to work to get all the transactions tagged accordingly. This is a part of the custom process that makes a huge impact on your reports.

This way when running monthly reports, he could see the categories he really cared about. We also taught him how to go into the report himself in Xero and dig into any category he wanted to know more about. We love empowering our clients to take charge and dig in!

Revenue Streams

This was a major light bulb moment for Max, and he took this idea and ran with it full steam. Our team proposed that instead of setting up contracts based on project milestones he should create standard payment plans (30, 60, and 90 days) so that regardless of whether the project stalled or had delays, the payment did not.

Many online service providers do payment plans this way so switching from deliverable to time-based billing wasn’t a huge ask of his clients. He started right away and had no problem implementing this strategy.

The result? Dependable revenue streams on his highest ticket offers.


Max wanted more than anything to see how the cash flow was moving through his business. And we delivered! By consolidating all his bookkeeping, bringing in all his bank/payment accounts, tagging his expenses, and pulling in all the recurring invoices for all his revenue streams; we gave him a robust and nimble cash flow forecast that let him see, down to the day, when his cash flow would be an issue.

He could project out 30, 60, or 90 days into the future to see how things would be looking, even playing with variables like adding more contractors, clients, etc. Most importantly, he could see the trends and dips that he so longed to.

His exact words were,

This is exactly what I wanted. I finally feel like there is light at the end of the tunnel. I can see what’s going to happen before it happens, and I can adjust for it. Thank you so much!

Max Sher

And we weren’t even finished!

Leo & Vern Custom Process in Action – Step 3: Automate


Now that we had gone to one system and created the custom chart of accounts it was time to create the automation! Xero has “rules” that our team creates so that every time a regular transaction comes through it automatically categorizes and tags it correctly.

Why is this so important? Because if your items are not consistently categorized your reports are useless. This is the #1 problem that we clean up when we take over a client’s books and it’s been done by someone else. Regular transactions were in multiple categories, so the reports were trash.

Bank/Payment Processors

Most of this automation was done already by setting up the direct import feeds to Xero (no downloading statements or manual uploads around here!)


One of the key components of getting Max his hyper-accurate cash flow forecast was accurately tracking expenses. We created recurring bills for all his standard expenses, which not only made the actual bookkeeping easier but enabled him to see exactly which costs were coming due on what date. It also helps us to see when certain categories of expenses were going over expected amounts and why.

Previously he had only focused on revenue, a frequent practice, but not understanding when your expenses come out can affect your cash flow significantly. Not only that but by simply adjusting some of the expenses to different due dates some of the cash flow concerns were eliminated.

Revenue Streams

Automating Max’s invoices was key not only to his cash flow forecasting tool working but also to him getting paid. Previously his system did not tell him clearly if a client was past due on a payment. Xero has a structure in place to automatically remind clients of unpaid invoices, 100% hands-free.

We started by importing all his clients into Xero and all their invoices set to automatically send on their due date (no more manual invoicing for Max!) and have automatic payment reminders for 7, 14, and 21 days. This kept the cash flow coming in without him having to remember or press “send.”

New clients came through to our team with a slack notification and input into Xero for their entire payment plan. Easy breezy.

We also automated his subscription orders off his website. Since he was using a WordPress plugin that didn’t quite link up with Xero, we work with his tech team to create a Zapier process so that when new orders were created it created a client in Xero and automatic recurring invoice as well. Now the subscription orders were in the cash flow forecast with 100% hands-off.

The only element we couldn’t automate was Upwork but since we were automating so much else the Upwork billing got a scheduled task assigned to our team to bill for. Job done.


The best part of all the above automation? The cash flow report that Max wanted so badly, automatically updated itself so he could look at it anytime he wanted to, and it would be correct.

Around here we believe that you should be able to pop in to see your books any old time you want to – and for Max that was his number one request. To really see what was going on in his business in real-time.

He still received monthly aggregate reports as well, but the cash flow feature was his favorite and what he found the most actionable for his stage of business.

And there is still more!

Leo & Vern Custom Process in Action – Step 4: Fine-tune


This was the point where we were starting to move into proactive bookkeeping practices. How to communicate about new clients, getting them in the system, invoices out, and payroll processing coming on board.

At this point, we determined that Max would really benefit most from having someone who could dedicate daily time to his financial tasks, almost like an in-house bookkeeper. We worked with Max to write the job description with him, discuss competencies and stayed on to help train his new “in-house” bookkeeper on all the processes that were set up.

Max’s Transformation in a Nutshell

He went fromTo
Not being able to access his booksFull transparency and access
3 different financial software systems1 accounting system
Not knowing why his cash flow was wonkyKnowing the exact, day-to-day status of his cash flow and projections for up to 90 days
Having reports monthly that didn’t tell him much about how his business was doingHaving customized clear reports about the parts of his business that mattered most to him
Customer payments that were frequently delayedA consistent payment model that creates a steady revenue
Not realizing how his expenses were adding upSeeing exactly where he could trim expenses without sacrificing quality AND how that affected his cash flow
Manual customer invoices that were sometimes forgotten or sent late100% automated invoices with payment reminders
Subscription invoices not being really countedAll invoices automated and accounted for

Timeframe for this transformation

We started working with Max in January and transitioned his accounts to his new bookkeeper at the beginning of March. We accomplished all the work you see above in two months. Max was an exceptionally responsive and involved client and that makes a world of difference when it comes to how quickly your financial strategy can take shape.

Ready for your own transformation?

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Hey, I’m Sarah, Your New CFO.

I help take the confusion out of finance . 

I've spent more than 15 years working in both the corporate and small business sector helping businesses both large and small find creative and new ways to save money while increasing value and profits. 
And nothing gets me more excited than helping small business owners create more profitable businesses.
Why? Because I know exactly what that means for you. It means more time to call your own, more trips, more time with your kids, less time worrying about money. 
I founded Leo & Vern in honor of my grandpa, my favorite person ever, who used his knowledge as an accountant to leave a legacy behind for our family. So to me, carrying on his legacy of helping others create their own legacy? Priceless.

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