Building Profitable Businesses with Rachel Phillips of Fully Accountable
On a recent episode of Pivot to Profit, host Pam Jordan sat down with Rachel Phillips, CEO of Fully Accountable, to discuss entrepreneurship, financial strategy, and scaling e-commerce and digital businesses. Rachel’s journey from aspiring Supreme Court justice to leading a multi-award-winning accounting firm is a powerful story of resilience, vision, and execution.
Rachel shared that she grew up in a single-parent household, where she developed an early appreciation for budgeting and balancing saving with enjoying the moment. That mindset carried into her career, where she first pursued law before discovering her passion for supporting business owners. After realizing estate law wasn’t her calling, she transitioned into mergers and acquisitions, helping entrepreneurs navigate complex financial and legal challenges.
Fully Accountable, which Rachel helped build from its earliest days, now serves over 100 clients with revenues ranging from $2 million to $10 million. The firm has been recognized on the Inc. 5000 list for five consecutive years. Recently, Rachel stepped into the CEO role through a successful transition from co-founder Vinny Fisher, leading the company into its “version 2.0.”
During the conversation, Rachel and Pam highlighted the most common mistakes entrepreneurs make when scaling—especially in the e-commerce space. Too often, founders cut sales and marketing spend when margins shrink, or they overspend without tracking true performance. Rachel emphasized the importance of drilling down into key financial metrics such as gross revenue, customer acquisition costs, and lifetime value. She also stressed the need for accurate books, vendor agreements, and insurance to maximize exit valuations.
Rachel noted that while AI tools can streamline reporting, business owners still need human advisors who understand their goals, provide accountability, and offer counsel during challenging seasons. She believes CFOs are more than number crunchers—they are strategic partners who can turn financial insights into long-term profit.
Listeners walked away with a clear message: success in business isn’t about what you make, it’s about what you keep. With the right financial systems, honesty in the numbers, and a willingness to adapt, entrepreneurs can scale profitably and build the businesses—and lives—they dream of.
Like what you hear? Find more from Rachel here: https://www.linkedin.com/in/rachel-phillips-ohio/ and https://www.facebook.com/fullyaccountable/
Episode Transcript
0:00
Welcome to the Pivot to Profit podcast, where we believe that understanding your numbers is the key to freedom of time and money.
Because at the end of the day, it's really not about what you make, it's about what you keep.
So each week, we're going to bring you real stories from real entrepreneurs who have faced the challenges of growing a business.
0:22
We'll also dive into how numbers have helped and sometimes hurt them, and gaining clarity.
Over their finances has.
Unlocked new levels of profit and freedom.
Hey everyone, welcome to today's episode of Pivot to Profit where we have the amazing Rachel Phillips as our guest today.
0:41
So glad to have you here.
Oh, I'm so happy to be here, Pam.
I am so excited for this conversation.
Let me officially introduce you.
Rachel is the founder and CEO of Fully Accountable, a full service outsourced accounting firm helping e-commerce and digital businesses scaled profitably.
0:58
Since 2014, she's partnered with founders to strengthen financial health, improve decision making and double profit margins.
Under her leadership, Fully Accountable has grown to 50 plus person team serving 100 plus clients with revenues of 2 million to 10 million.
1:14
The firm has won multiple awards, including five consecutive years on the Inc 5000.
Congratulations girl.
How are?
You doing great, how about yourself?
So good.
And I had a little birdie tell me that you recently got a Stevie Award.
1:32
That's pretty amazing.
Congrats on that.
Thank you so much.
So cool.
All right, so let's dive right in.
Did little Rachel want to be when she grew up?
What did like 5 year old Rachel dream of being?
1:48
Totally a Supreme Court Justice if you can believe it.
I loved Ruth Bader Ginsburg from a very early and actually ended up going to law school.
I do not want to be a Supreme Court Justice anymore, but I can tell you it definitely was like my dream as a little girl.
2:04
Yeah.
I love that that.
So what was little Rachel taught about money?
So you loved law and you did go become a lawyer, but like, what were you taught about money as a kid?
So I grew up in a single mom household and we just learned to appreciate what what we could do with money and how you could do so much without it.
2:27
And so I just feel like we learned a really good relationship to like budgeting and like when you had that, those excess dollars, like why sometimes you would put it in a savings account and why sometimes we'd get to go buy something fun.
And so the relationship of learning like to save for future but enjoy now, was just a big thing that we really lived when I was a kid.
2:49
So went to college to be a lawyer.
What was the thought process there?
Like prosecutor, defender, like public?
What was the plan?
I really love people and how they operate, and so I ended up being a sociology major with the political science degree and I just really love things like social movements and how like society can rally behind something and make change.
3:14
And that's really where I found my love of the law.
And it really parlayed for me into business because as I went into law school, I found out like, wow, there's this whole world of business where people are like, need so much like help.
3:31
Like somebody loved being a construction worker, ended up creating a construction business, but there's all these things around it they have no idea how to do.
And like, you can help them make their dream of owning their own construction business by helping them with numbers and agreements and just good practices and compliance in their business.
3:51
And they don't like doing it.
But I really found a lot of joy and just like the tackling of those very administrative functions that could make somebody else's dream come true.
Early career?
What kind of law were you practicing?
Like who were you helping entrepreneurs?
4:06
What did that look like?
I was doing a very first version.
I was doing a state in probate in a small firm.
And I remember being there and watching family fighting over like trinkets and being like, I don't enjoy this at all at all.
Like your mom just passed away and we're caring about who's getting like the little figurine.
4:25
Like that's so silly to me.
And I ended up getting an internship with who was our one of our original founders at fully accountable, multiple businesses of his ago doing some merger and acquisition work in their HR and legal department.
And I just fell in love with it.
And so I pivoted my whole law career, starting with my second year into going all business, tax, HR, corporate, mergers and acquisitions and Neverland back.
4:51
Mergers and acquisitions is such an area where there's so much that can go right and so much that can go wrong in those early stages.
Like what were some things like, because I talk to entrepreneurs that want to exit all the time.
Like what are some things that flagged for you that entrepreneurs just didn't see coming when they were sitting down at the table?
5:11
When you're like, let them navigate that exit because there are so many things that can blind side you.
The first thing is obviously the financials, right?
A lot of people have heavily relied on a spouse, a friend, a local person that kind of knows accounting to do their books.
5:27
And they're ish.
I say ish done right.
Like there's a version of them, but they're not set up to exit, meaning that you've properly helped them establish good financial practices for best valuation or they're just missing a lot of data and they can't fill the gaps.
And so they take a big hit.
That was the first one.
5:43
And then the second piece really tied in my legal background that things like employment agreements and having structure in place and having, you know, vendor invoices and negotiations and all those things kind of buttoned up like insurance.
You know, it's that's such like a dud thing to talk about or think about, but just basic insurance can help you so much 'cause it's de risking the buyer that like helping them round out their entire company with all those types of things has just helped them not only maximize their valuation but also exit more quickly and for a higher multiple than they were expecting.
6:17
Great tips.
Yeah, we always talk about financials are #1 when it comes time to exit.
And that's why, you know, having good books is such a big deal because a potential buyer is going to ask you about your products and your clients.
But the first thing that they're going to see in a due diligence is your numbers.
And so if your numbers are clustered like it's, it's dead in the water.
6:34
Well, and you like, you can't help yourself as a buyer to not trust the company if their numbers are like, we all do the sniff test for everything.
And if the numbers aren't sniffing out, you're like, are they hiding something?
What's going on?
What's really going on here?
There must be something else, right?
And so, yeah, I I agree with you.
6:51
It just like it just puts your warnings up like something doesn't smell right.
Yeah.
And I've seen, and I'm sure you do have two deals just die on the table when they ask for someone to send over their financials.
And they're like, yeah, let me see if I can get those to you.
7:07
And it's like a post it note or an Excel doc and you're like oh crap, like we.
Honestly, one time had somebody send us a trash bag full of receipts and was like, here's everything I have from the last five years and we're like, oh, what will we do with this?
7:23
Yeah.
I was like, OK, yeah.
Yeah, good luck selling your business, dude.
Yeah, by the way, do you, have you done your tax returns in five years?
Because that's not happened because the ARS doesn't take a bag of receipts.
Yeah, it's crazy.
So in 2014, you joined Fully Accountable and Vinnie Fisher.
7:42
What was your role when you first came in at that point?
I was actually taking the bar exam when he started, fully accountable.
I incorporated on my break and then came home and was like, I've only heard very first versions of this company, but I love it and I'd like to be a part of it.
So I kind of just started as a generally, I did a little bit of sales, a little bit of marketing, played a little bit of account until I figured out what was going on and then I just started building the team from there.
8:06
So my first real thing that I did was just get the right people in the right spots of the bus so I could grow.
Just building the foundation.
So in EOS terms, are you, do you feel you're more of an implementer than a visionary or?
Completely yes.
Definitely an implementer.
8:23
I love a good system, I love a process, and when it works beautifully, it's like chef's kiss to me.
You're like amazing, amazing.
So you yourself took part in a merger and acquisition when you stepped in as CEO and of fully accountable.
8:39
So that's amazing.
It's funny because I knew Vinny years ago and met him in person and at events and had calls to them after.
But like, how do you, how did that unfold of like, Nah, I got this.
Yeah, great question.
So it's really interesting because at the time I've been working with him for 12 years and so he was ready to exit fully.
9:00
He's doing some really amazing things in the mentor space.
And he was just really feeling called to go grow that.
And I kind of looked at myself and said I don't want a second career.
I love what we're doing here.
And so it was kind of amazing.
We just came together and I was like, I'd like to take the second run at this.
9:17
And he was like, I can't think of somebody better to take the next version of Foley than the person that helped grow version 1.
And so about a year and a half ago, we came out with a plan and I'd been CEO for about 8 months and then ended up buying out his equity and he's been freed up to go do what he wants to build.
9:35
And I've been able to keep building what I have my joy doing.
I love it.
That's magical.
You rose up, helped build it and then now you're like, OK, now it's mine.
I can go version 2.
I love it.
So being being in that role is tricky.
9:51
And you focus mostly on e-commerce and digital businesses.
So why that niche?
Why did you group that that avatar and be like, yes, we want to help them?
First versions of our company, we started out doing remote and hybrid.
So most of our controllers at the time were working remotely and we burst out of an e-commerce company.
10:12
So at the time Vinny had owned a host of different companies, which is where we really did first versions of month end cycles accounting services.
What we found being remote is that industry was really receptive to outsourcing functions on a fractional basis.
10:28
We really tried to be all things to everybody after that, but it was difficult to become an expert and really deploy anything specific when I was trying to do a law firm and then a construction company and then an e-commerce company.
And we said we really want to niche down and be the best we can be in these groups of companies.
10:46
Again, they understand and like this fractional outsource model.
And so let's maximize that.
And so we actually when we decided to cut out all of like the fluff clients I call them and just double down on them, we doubled our business in the first year of doing that.
When you were like, let's just focus be the best in the industry and this type of client.
11:06
And you're right, e-commerce digital businesses, they have no problem with right fractional virtual services like yeah, they work out of their basement, they work out of their garage tipping and and all those things.
So it makes total sense to have a remote support team to do this and remote support team to do that.
11:23
So you love profit and we love profit.
Many entrepreneurs struggle with their profit margins when they're scaling.
What are some common mistakes that you see entrepreneurs make and then how are you guys supporting them through those?
Mistakes.
It's usually one of two things.
11:39
One, when the profits get really slim, they start cutting sales and marketing dollars.
And so it's stunting their revenue growth and it's like, oh man, like that's how you're making your money.
You need to keep, you need to keep putting money there.
On the flip side, it's the people that say I need to keep putting money in my sales and marketing and they have no idea if it's performing for them.
11:59
And so for those people it's just go granular, go campaign, get buy campaign, product by product, sales channel by sales channel, what's working, what's not working.
Double down on what's working, cut what's not working.
Because you're so focused in e-commerce space, it's literally comes down to like LTV and CAC and OK, how much is it costing you to acquire a client?
12:21
How many transactions per client are you getting when you send out your promotional emails?
What's your conversion rate like?
You can just drill down and be like, OK, this SKU is doing so much better than that one.
Put all your adult dollars to that SKU.
And I feel like an e-commerce space inventory is also a big nightmare.
12:40
Totally.
Because first you have a have to have a lot of cash typically to get the inventory in the door and then it's so hard to manage, especially if it's something that's perishable or has the expiration date.
How do you help clients with inventory?
12:55
Because in the e-commerce space, that seems to be a huge challenge that I see a lot of clients struggling with.
Our biggest thing that we try to do is help negotiate better vendor contracts for them because at the end of the day, it's one of two things.
Either you don't have the ability because you have enough sales, you know you can get to buy enough in advance to get the price down or you need to buy like so repeatedly that your shipping costs are up.
13:22
And so if we can extend terms for you and get them basically in tranches, you're able to kind of pay as you go as opposed to prepaid and hope you can work through it because there's nothing worse than this like entire rack full of stale inventory that you can't turn over specifically as we're heading into Q4, right?
13:41
Like this is the most expensive time of the year for an e-commerce business and inventory can be an absolute cash killer for them.
You brought up the marketing, and I've seen so many e-commerce companies rise or die by their marketing because they're either, oh gosh, you know, I'm spending $1000 a day on Meta.
13:58
Oh, no, I'm spending $50 a day on Meta.
And like, if you're not tracking the numbers and you're not having the metrics and the visibility of what's going on, I had one client, he was getting his reports three months in arrears.
Oh boy.
Yeah.
And so when he came to us, I was like, so three months ago you lost a whole lot of money on marketing.
14:16
What'd you do about it?
Two months ago?
Nothing, 'cause my accountant didn't give me the reports.
So you've been spending bad money for three months on marketing.
Oh my gosh.
And your sales are down half, $1,000,000 and you're wondering why get the numbers in the marketing?
14:31
It's throwing.
It's throwing bad money.
It drives you crazy when they don't have these metrics.
And the other one that drives me crazy is that they'll say, well, my competitors on TikTok and I'm like, but we don't know that TikTok.
Like you want to keep doing TikTok 'cause they're already doing TikTok, but you're losing money on TikTok.
14:47
So let's put your money back on Meta where you're making it.
And they're like, but then people won't see me there.
I'm like, it doesn't matter because you're not making money off the people who are seeing you there.
You know what I mean?
It's like getting them to understand that, like, you just don't have to be everywhere because everybody else is like, be where you're making your money.
15:04
What are some key PIS, key performance indicators that you help your clients identify that really tip the scale for them?
Because in the e-commerce space, there are so many acronyms and so many initials of like all these gurus out track this, track that, track this.
15:20
So what are some key ones that you identify as really tip the scales for your e-commerce clients to know?
Are they winning at this game or are they?
Are they making money?
Are they not?
Because money in the bank doesn't mean you're winning.
It might make your money like you, you have to pay your three PL. next week and your Amex.
15:37
You have no money the first one.
When we look at is their revenue bucket.
So I want to know your actual gross revenue, not the cash that was deposited in the bank.
So we do your gross revenue completely grossed up, merchant fees, chargebacks, refunds, all of those are broken out because you can find a lot of information on how your customers like your products between your refunds and your chargebacks, right?
15:58
And so if you're only doing the cash that deposits in the bank, you're completely losing insights on those.
So that would be #1 the second one that we're looking at, you already kind of touched on it, but is that LTV average order value and cost of acquisition?
So what does it cost you to get a customer?
16:15
What is that first transaction of them?
And then what's that lifetime value?
And if we blend that, are we able to make money off of that acquisition?
And so when you're looking at all of those, we can break it down again by campaign, sales channel, etcetera.
But I really want to know what each customer costs you and what you make off of them in order to be able to say like, yes, we're actually profitable.
16:40
And I'm not just saying like just the ad cost, cuz there's other things that go into it, right?
Like there's the ad has to be built and you had to pay a designer and maybe you had to pay a copywriter and they had to pay your marketing person.
So what are the true costs to acquire that customer?
And then what's its actual value to you long term?
16:57
Yes, all of that.
So true.
And unfortunately, so many people don't track these things and they're just throwing money and they're like, well, my competitors doing this or I saw if I drop ship this from whatever, it's gonna bring all this money.
17:12
But then if you don't understand your margins and to your point like, you've got to remember the ad spend is just a number to calculate.
I know.
Like the merchant fees, the chargebacks, the refunds, the returns, all of that.
But then what about your operating costs?
Like people get overhead all the time and the pricing I'm like, but you have an office and a warehouse.
17:33
Please yes I know I always love when I'll be on with a client and they'll be like no like I have like a 3 1/2 times on a return on my ad spend.
I'm like on your ad spend, but you're they're like, my agency's killing.
I'm like, but you forgot to add in what the agency is costing you.
17:48
Like you aren't actually making money on what they're doing.
They're they're just getting paid to do a job and then you're making sales, but you're flat.
Like you essentially have not moved the needle one way or another.
And they're like, oh, I never thought of it that way.
That's like, Oh no.
18:04
Yeah, like, congratulations, you're making your marketing agency money.
Yes, exactly.
And you're getting crumbs.
So what are some things, because you've been working in this industry for a long time, what are some things that you've seen with the clients that really scale and get into the multiple 7 figures where and the clients that just get stuck and plateau and just bail out?
18:26
What are some things that distinguish the top tier from the ones that are just barely treading water?
I would say honesty in their numbers and here's what I mean by that.
I think that if you as an owner want to build an operational budget and you want to have for yourself 20, five, $30,000 of available cash to go spend it on whatever you want, I don't care, that's fine.
18:52
But we need to know that so it can be budgeted for so that when you're hitting your top line, missing your top line, we know where we need to cut costs.
We can be honest with you.
Like you've got to scale that back for this season.
Like we need that $25,000 to go invest.
19:08
But what I see for the people that are most likely to just throw in the towel are the ones that want that $25,000 but make it our problem.
Like somehow we didn't know subconsciously that they needed that and it should be OK and it needed to be begged, borrowed and stealed from somewhere else.
19:27
Like again, it's your business.
It's your CF OS job to make the numbers, to give you the plan on how that's available.
They're not going to do your marketing, but they're going to give you the blueprint from the financial piece of if you want to scale, here's your ratios of what you need to hit, here's where you're going to need to invest.
19:45
And so if you want that additional money, here's what you're going to have to go do, and then you need to decide to go do it.
And so the ones that want that go do it.
They want ones that don't make it are like, that's my money.
I'm going to spend it at somebody else's problem.
Like cut another person, cut an ad here, right?
20:01
Like they turned it into much of a personal bank account.
And not seeing that this is a long play, right?
It's not a Sprint.
You know this is the marathon.
Business is chess, it's not checkers.
There's lots of moves and it takes work.
And I agree 100%.
It's the business owners that put in the work that roll up their sleeves and do what needs to be done so that they can have that 25,000 to then go buy the shiny whatever that they want to divide instead of the business owner who makes to your point makes it everyone else's fault that the.
20:31
There.
Like roll up your sleeves and go sell some more stuff.
Great.
Yeah, that's what we do, right?
Yeah.
Yeah, I pay my bills by selling more stuff and helping.
Exactly.
Yeah, it's.
The same thing like you can't you sell more stuff on Amazon?
That's how you sell me.
20:49
So Rachel, tell me, what is version 2 point O going to look like for fully accountable now that you've been leading the ship for a year and a half?
What's coming next?
Two big things for us when we are doing some expansion of services.
So who we serve and what we serve to you, I think it's just a good time.
21:05
We've been around a little over a decade.
We've developed a couple good expertises and so our goal is to expand some of that with who we serve and what we serve to them.
But the other one is just leaning into this tech that's out there in a way that's appropriate for the accounting space.
Knowing that any AI tool can build you a version of a budget, but they that AI tool can't tell you then how to go deploy it and give you guidance.
21:29
And so US as an accounting company are really diving into how can we be better guides on those reports?
How can we be better strategists?
How can we be better for you from a feedback perspective so that you know, now we're getting these reports in theory more quickly, hopefully more error free.
21:46
So how can we be a better person on your team helping you go make good objective decisions more quickly?
So you don't have that three months that you're waiting, but you're 1012 days instead.
Yeah.
So that brings us to another topic, which is AI and technology, because it is obviously huge right now.
22:03
And you can make a GPT that'll do anything.
But there is value in having the human.
And I've had a lot of people ask me like as fractional CFOs and accountants, like, are you afraid that you're going to be replaced by a bot?
And I keep saying no.
I.
Do too.
We use AI in our company every day.
22:20
We have multiple different platforms that we use, multiple different tools that do a lot of heavy lifting for us.
But in my perspective, you still need someone to say, now what?
And what does it all mean?
And take the data and take experience from other clients in the industry and say, OK, here's what it's saying, now what?
22:40
And also the AI doesn't know that your dream is to have a cool in your backyard or to go to Europe or to exit or just sell to, you know, sell to your CEO, like the AI doesn't understand those.
So how are you using AI but also pulling in the human element of being a, you know, at fully accountable?
23:01
Yep.
So we're really using AI to help build reports more quickly from the perspective of using the data that we have.
We use a lot of data warehousing.
And so that allows us to go in, manipulate, build a report, you know, solve the equation that we can't figure out in a cell a little bit more quickly.
23:18
Here's the piece that I why I completely agree with you that it's humans are never going to not be part of the accounting department, in particular CF OS.
I'm sure you're going to agree with this that your job as a CFO more often than not is to be a counselor, right?
You're getting on the phone something happened and that person just needs somebody to listen and talk to them.
23:38
And no matter what AI tool it is, it doesn't have the ability to give that emotional human element back.
And so much more gets accomplished with us.
Like you said, when we find out they're having this bad day, it's because they have set their dream on taking their family to Europe at the five year anniversary of X and now they don't have the cash flow and they're going to let everybody down.
23:59
And you're like, oh, we can get there.
Like you just needed to tell me that.
Like I just, I need to know what your goal is to build it into your road map.
And I just don't think AI is ever going to be able to overcome the human emotional element in accounting.
Like people think accounting is just a fixed line expense that has to be done with reconciliations.
24:17
But if you're using your CFO correctly, like it should be a profit center to you, that that should just be like the old HR, somebody's in the back office dark room waiting to fire somebody or like be upset of compliance.
Like that's not the world we live in anymore.
And I just don't think we're ever going to be able to get that technology to have feelings.
24:37
And so that's that's where we're sitting on the topic.
And I think a lot of times CF OS are counselors and we're also accountability partners and sometimes we save marriages.
We work with a lot of clients where it's a husband and wife team.
And like sometimes as CF OS we're like, OK, everybody calm down, go to your corners.
24:54
Like and and it's also like the challenge of the visionary versus the the implementer, you know, like that in a marriage dynamic.
I feel like as CF OS, they need a person to be like, OK, both of you are right.
Right, right.
Yes.
25:10
You know, manage the relationship.
So I I tell people like we save marriages because if it's a husband, wife, we as CF OS are helping them guide the business decisions through the lens of their relationship.
But we also save marriages and families because if the money is profitable, then the parent or the entrepreneur can be there for dinner and be there for the soccer games or T balls.
25:31
And so AI, we can definitely do a lot of heavy lifting and the reporting has been fantastic.
And we can do things that like, I don't even have to calculate churn anymore.
Like I just go to my GT, plug in the numbers and voila, it, you know, that used to take me 20 minutes to calculate, you know, and it's done.
25:48
So I think there's huge benefit to it, but there's the human element of the CFO being your counselor, your accountability partner, your, you know, confidant, your venting person.
Like I don't think AI can take.
That away?
I don't either, Yeah.
26:04
I love it.
I love it, Rachel, this has been fantastic.
Where can people connect with you and fully accountable?
Yeah, absolutely.
So I'm on LinkedIn, Rachel Phillips, you can find me there.
You can e-mail me at rachel@fullyaccountable.com.
And then we've got a website, fullyaccountable.com with a ton of resources and opt in there as well.
26:23
Amazing.
Thank you so much for sharing your story and helping entrepreneurs understand their numbers because it is the number one thing here at Pivot to Profit we talk about.
It's not what you make that matters, it's what you keep.
Thanks everyone.