This interview is with Rhett Molitor, CEO & Cofounder at Basis 365 Accounting.

Rhett Molitor, CEO & Cofounder, Basis 365 Accounting

As an expert in small business finance, can you tell us about your background and what led you to specialize in helping small businesses improve their bottom line?

We started Basis 365 Accounting back in 2012. My business partner and I were both former auditors at CPA firms, and we kept seeing the same problem: small but growing businesses had no scalable or cost-effective way to get more than just numbers from their accounting. They needed insights and tactics. Businesses in the $1 to $20 million range were stuck either with entry-level bookkeeping that couldn’t keep up, or with expensive solutions built for much larger companies. We built Basis 365 to close that gap by designing systems, processes, and a fractional team specifically to help founders improve their bottom line and provide peace of mind.

What was the pivotal moment in your career that made you realize the importance of effective financial management for small businesses?

I left public accounting to join a software company that was digitizing audit and tax workpapers and transforming how CPA firms collaborated. That company was eventually acquired by a large national tax and accounting publisher, and I spent years leading teams that helped CPA firms embrace change and rethink their culture. When it was time for my next chapter, I turned my focus to small businesses. I wanted to modernize their accounting experience using cloud technology and virtual teams to deliver the kind of financial clarity and efficiency that had been out of reach. Combining my background in accounting with technology, I was able to design a solution built for growing businesses.

Based on your experience, what’s one often-overlooked accounting tactic that small businesses can implement immediately to boost their profitability?

The number one driver of profit is price. It sounds obvious, but most small businesses spend surprisingly little time getting it right or revisiting it once it’s set. Too often, owners make a best guess, follow the competition, or default to cost-plus pricing. Once in place, pricing is rarely analyzed or adjusted. In reality, it should be reviewed regularly, with small changes tested along the way.

Raising prices is scary, and that fear keeps many businesses from doing it. Instead, they squeeze delivery and costs, which only goes so far. A smarter path is to invest in pricing expertise and equip your sales team with the confidence to hold the line in pricing conversations. Even modest price improvements can have an outsized impact on profitability.

You’ve mentioned using Fathom for financial planning. Can you share a specific instance where the goal seek function helped a small business client achieve a breakthrough in their financial strategy?

One of my favorite tools in Fathom is Goal Seek because it makes the financial levers so clear. Let’s say a business wants to reach a gross profit of 80% but they’re currently at 60%. Goal Seek will break down exactly what needs to change—whether it’s revenue, sales volume, or cost of sales—to hit that target. Maybe raising prices 20% isn’t realistic, but what about 5%? The tool instantly shows the ripple effect and what adjustments in volume or costs would then be required. Suddenly, instead of guessing, you’re working with a clear roadmap. Small tweaks become part of a realistic plan to actually reach the financial goal.

Many small business owners struggle with managing their expenses effectively. How has your approach with tools like Xero and Hubdoc transformed the way your clients handle their business expenses, and what tangible benefits have they seen?

We use Xero as our core accounting platform because it’s both powerful and easy for non-accountants to navigate. Paired with Hubdoc, it transforms the way clients manage expenses. Instead of chasing receipts or stuffing them in a drawer, owners can simply email or snap a photo. Hubdoc uses OCR to code the transaction, push it into Xero, and store the receipt digitally for future reference. The result is a streamlined workflow with less paper, fewer manual entries, and a complete digital archive that’s audit-ready. Business owners save time, reduce errors, and gain real visibility into their spending. And with Xero now layering AI into these processes, we expect the efficiency to only get stronger.

In your work with outsourced accounting, what’s the most common financial mistake you see small businesses make, and how do you help them correct it?

One of the biggest mistakes small businesses make is thinking they need either a bookkeeper or a CFO. The truth is, they need everything in between. Bookkeepers are often solo operators without formal accounting training, while CFOs are finance professionals who are great at interpreting numbers, but not the ones you want doing day-to-day accounting. The result is that many businesses end up either over-hiring or under-hiring.

The better solution is a fractional team. Instead of one person wearing the wrong hat, you get the right mix of roles ranging from a fractional CFO, controller, accounting manager, accountant, and bookkeeper – a fractional accounting department. It’s scalable, cost-effective, and ensures you only pay for the expertise you actually need.

Can you walk us through a real-life example of how implementing proper management accounting practices turned around a struggling small business?

The most common red flag is when a business owner feels like they’re doing well, but the bank balance isn’t growing. That lack of confidence in cash flow is usually what prompts change. We start by making sure the accounting is done right through proper accrual accounting, clear financial statements, and controls around cash coming in and going out. Once the foundation is solid, we can layer in tactical recommendations and track the right metrics. Many owners describe the feeling as “flying blind,” constantly worried about curveballs. With proper management accounting, they finally have clarity and peace of mind. We’ve seen this transform many service-based companies and especially fast-scaling software or e-commerce businesses.

With the rise of fintech solutions like Ramp, how are you seeing small businesses leverage these tools to improve their financial collaboration and budgeting processes?

Fintech solutions like Ramp have completely changed the game for small businesses. Traditional banks were slow to innovate, but these platforms add a modern tech layer that gives owners control they never thought possible. Suddenly, you can manage spending at both the big-picture level and down to individual transactions; setting limits, tracking budgets in real time, and eliminating the mystery around where the money goes.

For growing businesses, that control is critical. Instead of waiting until month-end to see what was spent, leaders can course-correct instantly. It creates better collaboration across teams, tighter budgeting, and ultimately more confidence in financial decisions.

Looking ahead, what emerging trend in small business accounting or finance do you think will have the biggest impact on improving bottom lines, and how can business owners prepare for it?

Like every industry, accounting is about to be reshaped by artificial intelligence. We’re not at the finish line yet, but it’s coming fast. I don’t expect AI to replace accountants or solve every challenge, but I do see it transforming how small businesses use their numbers. Beyond automating routine tasks, AI will help spot errors early, highlight trends, and even suggest specific actions to improve performance.

The key for business owners is preparation. AI is only as good as the data it works with. Cloud-based systems and clean, reliable data will be essential. If your books are incomplete or inaccurate, the risk is that AI gives you bad advice, and bad advice can be worse than no advice at all.

Thanks for sharing your knowledge and expertise. Is there anything else you’d like to add?

I’d just say that small businesses are the backbone of our economy, and they deserve the same kind of financial tools and insights as big companies. If I can help shine a light on how they can thrive, I’m always glad to share what I’ve seen firsthand.