Almost Right Is Not Good Enough with Parag Mamnani of Webgility
Parag Mamnani and I go back to the Magento days, when he was building stores on osCommerce and X-Cart before Magento took off, and he has spent close to two decades since then on one problem that merchants keep asking him about, which is how to do their books when they sell on every channel at once. He founded Webgility, which automates accounting for multi-channel brands and retailers, and he opened with the question that started the company.
“Well, what do I do with all this data? And how do I do my books?” he says.
This episode is sponsored by Webgility.
From Amazon Webstore to Webgility
Parag ran his own ecommerce build business for seven or eight years, then joined Amazon to run Webstore, which Amazon later sold to Shopify. In both jobs he heard the same two questions from merchants, and nobody had a clear answer to either one, so he left Amazon to build one.
“A lot of people think about accounting as something they just hate doing. It’s something for compliance, not to get into trouble and once in a while to make sure your taxes and everything are filed correctly. But really accounting and financial data is a competitive advantage,” he says.
He wrote the plan on the proverbial napkin as three words, integration, automation and insights, and he says Magento is dear to his heart because the Imagine conferences and the 2009 and 2010 ecommerce boom were what first catapulted Webgility’s growth.
The Accounting System Is the System of Truth
I told Parag about the Magento clients who wanted all of their reporting out of the store, and how I had to explain that the store was never built for that. His answer was the same one I gave them, with more precision.
“Your accounting system’s the only place that you’re really gonna get the real answer,” he says.
A single channel gives a merchant a good enough view of the top line, and very few systems show the true bottom line by channel and by SKU. That is where he uses the phrase that became the title of this episode.
“We like to use this phrase as well throughout, which is almost right’s not good enough,” he says.
Webgility pulls the sales channels, the payment processor payouts and settlements, the sales tax, and the cost of goods into one picture, and reconciles the lot against the bank deposits so the merchant can see SKU level profit and real cash flow.
Cash Flow Separates a Startup From a Scaling Brand
I asked how important cash flow is for the merchants who check the QuickBooks bank balance every day and call that a view of the business.
“I think that’s the difference between a startup and a scaling brand,” he says.
A merchant can wing it to a hundred or two hundred thousand dollars in sales, and past that the margins are too thin to guess. He listed what is squeezing them, marketplace fees, storage costs, labor, fuel, and international sellers, and said SKU level visibility is the only way to find the growth that is left.
Why He Will Not Hand the Books to Claude
The newest thing I hear from merchants is that Claude is going to do their books. Parag runs agents across his own company, and he still draws a hard line at the ledger.
“No one is gonna be happy with 95% accurate books. Not even ninety eight, ninety-nine percent accurate books. You have to be reconciled to the penny and you have to get the math right,” he says.
He says the accounting benchmarks top out in the low nineties, and the remaining five to seven percent is where a person’s judgment has to come in. He also gave me the best description of working with an AI agent that I have heard on the show.
“AI is all about sycophancy, okay? It is designed to tell you and please you because there is no reason for it to be adversarial,” he says.
He is on the fifth or sixth version of his own chief of staff agent, and he treats it as a smart intern whose first answer is impressive and whose mistakes are real. I told him about the Talk Commerce page that sent a guest to the wrong Brent Peterson on LinkedIn that same morning, which is exactly the kind of error a person has to catch. His summary of the people who claim their agents never slip was short.
“They’ve clearly not run any agents in production,” he says.
Who Owns the General Ledger
Looking ahead, Parag sees a fight over the general ledger, with new AI accounting apps on one side and QuickBooks and Xero adding agents to their own platforms on the other. He is rooting for the entrepreneurs, and he is betting on the specialists.
“What really is of value is these specialized verticalized solutions like Webgility, where we can continue to leverage the core technology that QuickBooks and Xero provides,” he says.
Webgility is a gold partner with QuickBooks and also works with NetSuite, and it pushes its data into the customer’s existing ledger instead of replacing it.
Three Habits for the Books
I asked what habits he wants merchants to build, since the obstacle to AI adoption in a small business is usually habit, and the technology comes second. He gave three. The first is a clean system of record, meaning a clear catalog structure and a chart of accounts that captures revenue and fees by channel and processor.
“Garbage in, is garbage out,” he says.
The second is a rhythm of closing the books every month, instead of catching up at a tax deadline. The third is to spend real time on the monthly numbers.
“Too much time and effort is spent on businesses trying to analyze their advertising costs, and too little time is spent by those businesses in optimizing their overall financial health,” he says.
Agentic Commerce Will Stay a Slice
On Black Friday and Cyber Monday, Parag expects agents to keep growing and multi-channel brands to keep winning, and he sees AI adding a new kind of cognitive load to businesses that now have to get their catalogs found by agents too.
“I’m a fan of agentic commerce, but I’m definitely not a believer that it’s going to take over all of ecommerce,” he says.
Parag Mamnani is the founder and CEO of Webgility. Find the company at webgility.com and Parag on LinkedIn.
Links From Webgility
- $300 worth of free eCommerce books audit for Talk Commerce listeners
- Limited-time offer, 50% off the full-service bookkeeping package