Ecom CFO Notebook – excess cash management execution

Welcome to this issue of Ecom CFO Notebook – a weekly letter for 7–9 figure ecommerce founders and CFOs, sharing my perspective and stories for profitable growth.

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Sam here.

I’m upset with myself that this is going out late at 5:00 PM on a Friday – certainly missed peak readership time. But I promised myself I would publish every week so here we are.

Last week I walked through the framework for thinking about excess cash. This week, I want to share how I’m seeing clients execute on that framework and how I look at it for myself.

I was recently talking to Steve, one of our clients, about why he picked a particular treasury platform.

He told me one of the main reasons was because he got to talk to the CEO during the sales process. Not a sales rep. The CEO.

This stuck with me because Steve will spend $5K/month on a marketing tool after watching a Loom demo. No call. No questions. Just signs up.

But for treasury management, the relationship mattered more than the yield. More than the features. More than the UI.

I’ve been seeing this with other clients too. When it comes to money, founders are optimizing for the human on the other end of the phone.

While the odds of something going wrong are low. Shit happens. When you accidentally wire $50K to the wrong vendor at 4:55 PM on a Friday, you want to talk to an actual person who can fix it.

Not a chatbot. Not a ticket system. A human.

So when it comes to picking a platform, the relationship piece matters, but it’s not the only thing.

As I’ve been narrowing down what is most important, three main areas come up…

Product velocity

I want to know if the company is shipping new features regularly or if they nailed product-market fit three years ago and went into maintenance mode.

I googled “Wise’s Product Roadmap” the other day to see what they’ve launched recently. Everyone was obsessed with Wise a year ago because of their cross-border payments, decent yield, and clean UI.

They took down their roadmap.

It looked like they added a couple countries and made some transfers slightly cheaper, but that’s it.

Compare that to Mercury, Highbeam, Rho. These platforms are constantly launching new features. New integrations. New capabilities.

I don’t want to switch platforms every 18 months.

If product velocity is high, they’re investing in it. They’re going to be around. They’re going to keep making my life easier.

Service when things break

At Ecom CFO, we’ve had situations with our money platforms where something went sideways. Not necessarily a mistake, just something that needed fixing fast.

Fortunately, our provider had support that actually picked up and actually helped us solve it. +1 for Bill.com in a pinch.

That’s the baseline I’m looking for now. Can I talk to a human when I need to?

It’s worth noting though that a big factor in whether these platforms will provide white glove service is if you have the cash to matter to them.

These banks and financial platforms make money on the spread. They provide 3.5% yield, lend out the case at 7%, and keep the difference.

If you’ve got a million bucks with them, that’s $30K-$40K of annual revenue just on the spread.

At that level, they care. They’ll pick up the phone. They’ll assign you someone.

If you’re sitting at $50K in average balance, even with $10M in revenue, they don’t really care. Revenue doesn’t pay them. Cash does.

I’ve seen some platforms be better with service than others across the board. But the difference in treatment really becomes noticeable once you cross that million-dollars in cash threshold.

Integrations that actually work

I need this platform to talk to the rest of my setup without spending three weeks on integration calls.

We had a JPMorgan account that was under a completely separate login. Our team couldn’t get it to connect properly to our accounting system and we wasted hours getting it set up.

So now I ask upfront: Does it actually integrate with the tools we’re already using?

I’ve seen too many platforms that technically have integrations but they’re buggy or require constant maintenance. The integration either works cleanly or it doesn’t.

If it doesn’t, I’m not interested. The time cost of wrestling with integrations or doing manual reconciliation every month adds up fast.

The yield trap (again)

Last week I said don’t chase yield. This week we’re seeing why that matters in practice.

Saving 0.25% on yield while compromising on product, service, or integrations doesn’t actually save you money.

When we run the math with $1M in excess cash… 0.25% is $2,500 a year. $208 a month.

One wire transfer mistake that takes a week to resolve because you can’t reach anyone? You just lost months of that extra yield in time cost alone. Not even counting what you might lose on the actual transfer.

I’m picking platforms that ship features, answer the phone, and work with my existing setup. The yield difference is noise compared to the cost of switching platforms or dealing with problems that can’t get solved.

Curious to hear what you prioritize when it comes to your money platforms. Hit reply and let me know.

Next week we’re getting back to the data. My team is finalizing the Q3 benchmark report so I’ll have some preliminary findings for you.

Stay tuned!

— Sam

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2. EcomCFO provides CFO and accounting support for 7-9 figure ecommerce brands – book a brainstorming session with me here