Accounting duo set Brainpower Nootropics on course
A2X and Avask the brainpower needed to expand business
Ashley Peat has lived with ADD his entire life. He’s tried the official drugs medical professionals usually prescribe - but found they only left him feeling more wired. So, he started looking into natural alternatives. That’s when he stumbled across nootropics - an umbrella term for products that enhance or change cognitive function. After a bit of experimentation, Ashley found a ‘stack’ - a combination of natural ingredients - that helped him immensely with his concentration, memory and focus. In 2016, he took a leap of faith and put his career as a personal trainer on hold to launch his own brand through Amazon, Brainpower Nootropics. “I figured if it worked for me, there are lots of other people out there with the same problem who it might work for as well,” Ashley says.
Business is booming
In three short years, Brainpower Nootropics has blasted through the ranks of e-commerce success. After launching his flagship product, Power Focus, Ashley got to work on researching, formulating, and manufacturing a stack to help those who suffer from anxiety - his girlfriend included. Both products are Amazon best-sellers. He’s now working on launching the individual products that make up Brainpower’s stacks, so his customers can mix and match their own - to see what works for them.
Brainpower Nootropics is primarily available through Amazon Marketplace in the UK, plus Germany, Italy and France. They’re about to expand into the US, and they also have their own Shopify website.
Like most businesses, Brainpower’s success hasn’t come without complications. Between Amazon’s problematic reporting and a major VAT issue, Ashley says it wasn’t until they were in “a horrible mess” that he realised they needed a different accounting solution.
No faith in the numbers
“Amazon doesn’t really give you a recommended, specific way of doing your accounting,” Ashley explains. “There are several places you can pull financial data out of Amazon - and they’re all different.”
The company started off using the business reports in Amazon, which Ashley says didn’t have enough detail. Then, they began using the date-range reports because they could be exported and downloaded as a CSV file.
Ashley had to put the date-range reports into a pivot table to organise the data in a way that was meaningful and depending on how the pivot tables were set up, there was huge room for error.
“I can’t really trust our first year of accounts at all. If the figures were 20% off it really wouldn’t surprise me,”
Ashley was looking for a different solution when he came across A2X.
“I was getting a strong indication A2X was best in market, and the one to go to. I didn’t want to spend months trialling multiple pieces of software.”
The next hiccup came in the form of VAT. Ashley explains it became obvious his accountant wasn’t familiar with e-commerce accounting when they learned A2X hadn’t connected with their Xero account correctly.
“There was a setting for VAT in A2X that hadn’t been turned on, so we actually ended up under-reporting our revenue by 20%. This led to a massive overdue VAT bill we weren’t expecting from the previous year. That’s when we decided we not only needed A2X, but also an accountant that knew how to use it and specialised in e-commerce accounting.”
A2X and Avask - a dynamic duo
Brainpower Nootropics made the move to Avask, qualified accountants and business consultants who specialise in international VAT and e-commerce accounting. The accounting firm is also an A2X expert and accounting partner.
“They knew straight away how to use that setting to make sure VAT was accounted for properly - and not an issue again”
A2X’s seamless integration with Xero, and its automatic summarised data reporting, now mean Ashley doesn’t have to worry about the numbers. Instead, he can focus on the next step of optimising the business.
“If I can trust the data, I can move my business on to its next stage, which is growth. Looking at gross and profit margins, cost per unit, ways to reduce Amazon costs - that number-crunching you can only do after you’ve got a good set of data to work with,”
A2X has reduced several manual accounting processes, saved the business staff hours, and helped to put Brainpower Nootropics in good stead to apply for funding.
“If we’re going to lenders, we want to be confident with our numbers. If we take a dodgy report from Amazon, I’m not confident, the lender isn’t, and we reduce our chances of successfully obtaining funding. If we were to ever bring in an investor or sell the business, they’d all want the same thing - good numbers!”
Worth the investment
When asked about advice for other e-commerce businesses, Ashley offers two points.
“A2X does exactly the job you hope it will. The software was easy to integrate and use, and support from the A2X team is quick if you need it. If you’re a European seller, just make sure you check whether the VAT setting is turned on”
“Also, they’ve just added in the support for Shopify which is great. Shopify is only a small part of our revenue so it’s not essential, but it’s safe to say we’d have similar problems to Amazon without it.”
Secondly, e-commerce specialist accountants are more expensive than your local accountant down the road, Ashley explains, but totally worth the investment when you can afford one.
“It was the right choice to go to a specialist, and I’d encourage other e-commerce brands to make the move when they can.”