The Free to Grow CFO Podcast Here Are The Places Your Books Are Broken (And How to Fix It)
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🧔♂️ WHO IS FREE TO GROW CFO
Outsourced CFO and Bookkeeping services for profit-focused DTC brands.
Scaling a DTC brand is stressful.
With messy books and no CFO on your team you run the risk of…
-Hiring too quickly
-Buying too much inventory
-Scaling ad spend unprofitably
-Running out of cash
And that leads to stressful, sleepless nights. We don’t want that for you.
Free to Grow CFO has given hundreds of DTC brands a plan for scaling alongside healthy profit and cash flow. Our plan will work for you too.
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🎤 EPISODE DESCRIPTION
Most founders rely on the P&L to run their business. The real risks—and the real truth—live on the balance sheet.
In this episode, Jon Blair sits down with AJ Stockwell, founder of Climb CFO, to break down how messy books quietly distort cash flow, margins, and decision-making in growing DTC brands. They unpack the most common red flags they see in cleanup projects—from cash-in-transit and merchant clearing errors to inventory mistakes that make gross margins meaningless.
This conversation gives founders a practical framework for knowing when a cleanup is necessary, how to think about the ROI of fixing historical financials, and why accurate balance sheets are non-negotiable once a brand starts scaling or pursuing outside capital.
What You'll Learn
-The #1 red flag that signals revenue and cash are likely misstated
-Why the balance sheet—not the P&L—is the fastest way to spot broken books
-Why inventory is the hardest account to clean up (and the most dangerous to ignore)
-The difference between light cleanups vs. heavy cleanups—and how to evaluate ROI
Episode Links
Jon Blair - https://www.linkedin.com/in/jonathon-albert-blair/
AJ Stockwell- https://www.linkedin.com/in/ajstockwell/
Free to Grow CFO - https://freetogrowcfo.com/
Climb CFO - https://climbcfo.com/
Transcript
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00:00 – Intro: Why Most Founders Miss the Real Financial Problem
02:35 – The #1 Red Flag: Why the Balance Sheet Matters More Than the P&L
05:50 – Merchant Clearing Accounts & Undeposited Funds Explained
07:00 – How Broken Balance Sheets Create Broken P&Ls
12:30 – Inventory Mistake #1: Zero Inventory on the Balance Sheet
13:45 – Inventory Mistake #2: Same Balance All Year Until December
17:45 – How to Rebuild Inventory History When Data Is Incomplete
18:45 – Light Cleanup vs. Heavy Cleanup: How to Think About ROI
20:15 – Why Lenders Start With the Balance Sheet (Not Your Story)
21:35 – What Founders Must Provide for a Successful Cleanup Project
22:50 – AR, AP, and the Working Capital Blind Spot
24:10 – Why “No AP” Is a Bigger Problem Than You Think
25:20 – Final Advice: When It’s Time to Stop Guessing and Clean the Books
26:10 – Where to Find AJ & Closing Thoughts