Why your company needs FP&A training

Welcome to The Did You Know Podcast by Varisource, where we interview founders, executives and experts at amazing technology companies that can help your business save a lot of time, money and grow faster. Especially bring awareness to smarter, better, faster solutions that can transform your business and give you a competitive advantage----https://www.varisource.com

Transcript

Welcome to the did you know Podcast by Varisource, where we interview founders and executives at amazing technology companies that can help your business save time and money and grow. Especially bring awareness to smarter, better, faster solutions that can transform your business. 1.4s Hello, everyone. This is Victor with varisource. Welcome to another episode of the Did You Know? Podcast. Today we're excited to have Paul Barnhurst, who is a LinkedIn expert and an expert on Fp&a, with training courses, providing research and resources on the technology landscape for finance. And welcome to the show, 

U1

Paul. Hey, Victor. Thanks for having me on the show. Excited to be here today? 

U2

Yeah. Every time I talk to you, I learn so much. And first of all, I was almost congratulating you on joining a stealth startup, yet you told me it was an April Fool's joke, so you definitely got me there, my friend. 1.5s

U1

I figured I might get a few people. I was trying to come up with something. It was either that or beard products, because everybody comments about how big my beards got LinkedIn. So I figured I'd go with one of the two. 1.2s

U2

Yeah, no, that was good. But no, you have an incredible background, and you provide so much value to Fpna and finance teams, which is super important in this economy. Right. But yeah. Do you mind kind of giving the audience a little bit of background story and that founder story on what you've done and how you came to these training courses? 

U1

Sure, yeah. So I'll give you just kind of the quick story of how this all came about. About six years ago, looking for a job, six, seven years ago, was on LinkedIn. Reached out to this guy, and I said, hey, if you'll give me 30 minutes of your time, I'll give you a Starbucks gift card. And the guy responded to me and said, I don't want your gift card. I want you to write an article for my website. And I first thought that went through my head as I suck at writing, but okay. So I chatted with the guy, and I wrote him the first article, and he edited it, but about his website, and he's like, hey, will you write me a couple more? I'll pay you. And okay, why not? I think it was like, $100 or whatever. And so I wrote them, and from that, I started to get active on LinkedIn. Shared a few of them there. One thing led to another. I joined one of the biggest groups on LinkedIn and volunteered to moderate some of the discussion. From that, I got invited to be on a couple of webinars and just started to build a little bit of following. Wasn't super active, but fairly active. Would post stuff. And then I want to say, a little less than two years ago, I was looking to work for a couple of Fpna tools. I was doing an FPA job looking for that next role. And I started writing about some of these tools, and more and more people reached out to me asking if I would demo a tool. Didn't get any of those jobs, but I looked at this and said, nobody's really talking about the tool space. And I talked a fair amount about Excel. Like, I'll start talking about software tools. As all that was going on, I want to say it was December of 2021. Some guy reached out to me about a consulting gig. Hey, I have a company that I've gone to work for. They need 1015 hours of Fpna support a week, and I think you'd be great. Another guy reached out to me as, hey, can you put together an Excel course? I'm not real technical for people I work with. I started my own business, guy that I'd been on a webinar with. And then in one week, three different vendors had offers for me. Two of them had asked if I'd look at applying to a job to work for them, and one wanted me to do a bunch of content. And so I went to my wife. And I'm like, hey, I can turn this into a business. And she kind of looked at me like I was crazy. And we talked about it, and about six weeks later she's like, go for it. I'm like, you sure? You sure you're comfortable with this? Because I'm going to put in my notice today and put in my notice and started the business. And when I started, thought I'd do a lot of consulting. Reality is I do a lot of training and then content creation. So working with different vendors, research like the third generation market guide on tools. Got a number of different courses now, some corporate. I got a digital, got a virtual course. And just continuing to build the brand and build the business all around awareness and helping people be better at Fpna. 1.8s

U2

Yeah, 1.4s these departments are ever changing, technology is ever changing, and you need to in order to learn. Right. I mean, a lot of these customers are busy running the business. They're not out there watching YouTube at night learning all these upskilling themselves, as we like to call it. Right. And so I think it's amazing that you have these programs to keep them up to date. So a lot of people aren't familiar with PNA, which stands for Financial Planning and Analysis. But can you kind of give maybe a couple of minutes on what is it and why is it important in companies? Yeah, 

U1

so I'll start with I like to explain what the difference is between Fpna and accounting because a lot of people get confused just starting there. So the way I explain it is accounting is backward looking. Accounting is responsible for recording what happened and making sure it's correct. Fpna worries about going forward. It takes what happens and helps forecast what the future is going to look like. And that's the F part of financial the F and the P of Financial Planning and Analysis is around that forecasting, budgeting, all those things that a lot of people hate when you have to sit there and like, okay, what's the number going to be for this year? What revenue do I have to sign up for? What resources do I need? Finance in particular. Fpna manages all of that planning, budgeting, forecasting. And then the A part is around the analysis. And that's really where business partnering and working with the business. An example, the business may say, hey, we're looking at this new product we want to launch. Does it make sense to build a new facility or should we retrofit an old facility we have? And finance would run the financial numbers. That to say, okay, which one makes more financial sense for the business? And so all kinds of different cases like that and different things, whether it be deep dive on revenue, on vendor spend, whatever, finance is getting involved in that, and helping guide the business to ensure they're using every dollar as best they can to make sure the investments are in the right place. 2s

U2

Yeah, 1.3s you've worked with a lot of different customers of all different sizes. What is the typical financial team structure and the challenges that you see that they face? 

U1

Sure. And it really depends on company size, so right. Small company you start with usually just an outsourced bookkeeper. Maybe if you have a lot of funding, you're a little bigger, you hit the ground running, you might have someone full time for that. But typically you start with an outsourced bookkeeper, then eventually you bring someone in house and then you have kind of that first finance hire. Maybe it's a controller, maybe it's a VP of Finance that does both. As you continue to scale, you add a CFO and then eventually as you grow, you get to that point where everything's in house. You're no longer using fractional CFOs and you really have to structure a department. Right. And so your typical pieces you're going to have is you're going to have your accounting team, you're going to have treasury, you're going to have Fpna. The bigger you get, you may have a risk and audit and different departments. And depending on company size, you're going to structure that differently. Just like any business, sometimes it may be divisional. If you have a business that has different products, you may have Fpna support for each product. But within Fpna, typically what you see in the structure of Fpna is with the small companies, you're usually doing everything. You get into a large company and you have pretty much what I call two divisions. Within Fpna you have the corporate finance team, which is usually doing the board decks, managing relationships with the investor relations team, managing projects with Corp Dev. So really that corporate finance is coordinating with all the different finance teams. They're often working with the different business units to roll it all up and understand everything. At a corporate level, where your business unit finance is really focused on supporting the general manager, supporting the business, and making sure the business is making smart decisions. That's where I've spent the majority of my career, almost all my career has been in that business unit side. I really like working directly with the business, what I call that business partnering. But within financial, some of the challenges we're having right now in the structure, there's questions of hey, should you centralize it? Should you decentralize it? Should you offshore some of your finance functions? I've seen some where companies try to have one team that manages all the planning and another team that manages the analysis, the business partnering. And so there's pros and cons to each of that. I think 1s there's a number of different ways it can be structured, but I think the bigger challenges right now is how to structure. 1.4s Finance in the sense of data does data analysis team, does that belong in finance? Most modern CFOs, which I will talk about a little bit later, are starting to bring the analytics team under the finance umbrella. CFOs sometimes have responsibility for operations or HR, especially in mid sized companies, you're starting to see CFOs take ownership of more areas that they used to not take ownership of and be much more strategic. So I see the challenges are often facing isn't so much around structure as it is. How do we make sure we have proper ownership of the data? How do we make sure that the business partnering is happening and the collaboration and those cross functional needs are being met because so many companies struggle with having good insight into their data. So I think that's a real challenge within finance. And then also the tech stack, the software tools, finance tends to run a little bit behind. They're usually not the first place you think of investing when you're growing a business. 1.6s

U2

Yeah, no, I love all of these insights and we can probably deep dive just on those alone for a couple more hours. But obviously I love your analogy on the difference between accounting and Fpna that I'm going to be definitely using moving forward. But most people would think the finance department should know, obviously what they're doing, right? They're running the business, supporting the business. So what do you think? Typically from the customers you work with, you feel like the areas they lack the knowledge or even on the Fpna perspective. So what do they gain by taking your course 1.1s for the general kind of finance teams, you think? 

U1

Yeah, 1.5s the general fpna course. And I'll talk a little more broadly. So first, I have a virtual fpna course called Best Practice Fpna. And really what it's designed to do is to help guide you and think about some of the best practices are out there. Because every company is so different. 1.1s And the way Fpna is done that a lot of people don't get to see perspectives outside of just the companies they work at. So one of the first advantages is we're bringing in a team. It's a virtual course from multiple different companies. And you're working with those people in case assignments, so you're able to, one, learn from others. Two, we focus on what are some of the best practices, ways to visualize data, because that's an area that a lot of Fpna people struggle with. How do you separate the noise from the signal? How do you determine what's important and visualize that in a way that the business is going to understand it? I can remember spending a lot of my career and I look back now and I cringe throwing everything into tables because I'm a numbers guy and tables work for me. I'm sure my senior leaders were looking at it like, why are you torturing me? Just give me the piece of information I need in a nice, clean, 1s succinct graph. And so we talk quite a bit about data visualization. We go through analytics techniques, we talk a little bit about statistical analysis, about scenario sensitivity and different ways to think about that. How do you solve the problems? So some of it's giving frameworks, some is talking best practice. And then in every session we apply that. There are group exercises, group discussions, some presentations you do so they can take that back. And we completed the first cohort of this course, I think it was January, it might have been early February, and we got great feedback from everyone. The next one kicks off in May. But in addition to that, I also have a digital course that I offer through thinkific about designing financial models and helping people think about the importance of design. And then with my partner, guy by the name of Ron Montero and I partner with him on pretty much all the stuff I do. We have eight different courses we offer for corporate finance professionals and different links to each of those courses where we can kind of customize them and come in and help meet the needs of whatever your finance and FP and a team may be. 1.7s It. 

U2

Yeah. So when you think about finance teams, you think that numbers people, right. Yet at the same time working with a lot of companies of all different sizes, from our perspective, we see that oftentimes they don't have they're still using spreadsheets, they don't have access, like you said, to analytics or insights or spend tools and all of these things. Why do you think that is? Because they should obviously fully understand the value of data right, and numbers. And yet they're kind of still maybe one of the last ones to utilize technology. Why is that you think 

U1

so? I think there's a couple of challenges and a couple of reasons. Some people like to joke. If it's a finance person, you're going to have to pry Excel out of their cold, dead hands, and they don't want anything else. And there's probably a little bit of truth to that of an over dependence on trying to do everything in Excel. But there are a couple of other reasons that I think are even more prominent. One is often funding. Usually finance is not the first place to get funding. So they're trying to manage without being able to put the tools in place they might like to put in place. I mean, I worked for a company where I would joke, basically, and this was a couple of years ago, our tech stack was from either 1980 or 1990. It was like 30 years old, and it was really hard to pull anything together. And so I think that can definitely be a challenge. I think the other thing is finance is cross discipline. We work with everybody in the business. So not only do we have to understand our data, but we often have to understand operational data. And if other systems and other people's data have problems, that all flows down to finance a lot of times. And they got to try to make all these systems speak to each other. So that complicates the challenge where a marketing team may only be really working with the sales force. Maybe there's a marketo procurement team might have a procurement tool. Finance often has to get HR data. It's getting the data from the CRM, it's getting the data from the accounting system, and then it may be getting transactional data from an operational system. And so it's trying to bring a lot of times all that together. And if you don't have a really good platform and process, you end up spending most of your time cleaning data, most of your time preparing data instead of analyzing it. And so I think there are a few different reasons. I think one is just the nature of the fact finance kind of has a 360 view of the business, and they're expected to work and understand data from multiple systems. I think two, there's sometimes a little bit of an over dependence on Excel. And then three, I think in general, investment has lagged a little bit behind in finance. And then the fourth reason I think sometimes they lag on tools is finance departments by nature are a little bit risk adverse and they hate the black box. They really want to be able to see and understand everything and so I think sometimes that has them lagging a little bit behind on adopting new technology. 1.8s

U2

Yeah, I think you gave some great examples that actually helped me even better understand 1.1s why these things are happening with all of these customers. 2.5s Like you said, the data is siloed, as we like to call it, and without the right tools or buy in from all the departments to put that data together and correlate and make sense of it, it makes it difficult for the finance team. So, again, your course is amazing. Helps a lot of finance teams. We want to draw out some of the insights from there. So what are some of the best practices in budgeting and forecasting that you 

U1

can share? Yeah, so I think where I would start, particularly around budgeting forecasting, there's a great annual survey that's done by Fpna Trends where they go through and survey several hundred Fpna professionals, and they did the one for 2022 and what the numbers found, and I'll quote them as best as I can remember. I don't have it in front of me, but I believe it was 39 or 40% of people rated their forecast good or great. 1.4s And that was quite a bit lower than the year before, which isn't surprising given coming out of COVID and all the uncertainty and challenges and forecasting. But what was really interesting is if you implemented driver based planning, which the idea of as a driver is what's the key operational driver? So in ecommerce it might be the biggest driver is how many people are coming to my website, to how many sales I do for the day, or how many clicks on something. Whatever that driver is, it's the biggest indicator of what the financial metric will be building your model using that driver. Cogs is typically a driver of revenue. If revenue is X, Cogs is this headcount may be a driver of how many calls do I take a day for my call center? So really understanding the business and what drives that financial number and building the model accordingly, so that's the first thing that will improve your budgeting and forecasting. The next thing they found is people that implement cloud technology. And this is why I'm such a big believer of implementing a good tech stack. Excel or Google Sheets or whatever spreadsheet is part of that. But you need an enterprise tool. And what they found is if you had a cloud tool, it went up like 10% percentage points. Those who are happy thought they had a good or great forecast, and then it went up by another ten percentage points on those companies that were using some form of AI or machine learning algorithms. So I think those are all things that help become more productive. I think the other best practice things without technology. Technology is an enabler. You still have to have the right processes. I'd say there's two things companies should be doing continuous forecasting, rolling forecasts. Some companies still just do a budget and then don't forecast throughout the year, whether it's R and O or at a deep level. You need to be dynamic and agile enough that you can continue to forecast and address. 1.8s Those risks throughout the year. And the second part to that is what I call scenario management or scenario planning. You need to be able to have different scenarios and know when to implement those different scenarios. So you might have at the beginning of the year, you might have built a scenario for what happens if there's a recession. You might have had a scenario for what happens if there's some government regulation in my industry. What happens if there's a Black Swan event. You might not be able to predict the Black Swan event. In fact, if you could, you're probably going to be rich because people can't predict what they're going to be, but you can predict what's going to happen and have scenarios for that. So you as a business are ready to change direction when something happens. And companies should have a few different scenarios. And around that is really thinking about sensitivity and weighting, the risk versus, oh, I'm just going to have one number. There's just one number we need to achieve, and we get tunnel vision and don't worry about anything else. So I think best practice is really helping the business with managing scenarios, bringing in some of that sensitivity, and then using technology to enable you to better meet the business, meet the needs of the business and more accurate, 1.2s predict, reasonable, you're not going to be exactly right, but predict and manage the uncertainty that you're going to deal with. 1.6s

U2

Yeah. So everything you just mentioned actually piqued my interest in another question I want to ask you, which we get asked actually quite a bit. A lot of people think about procurement or finance as bottom line, meaning, hey, you got to look at savings, you want to look at preserving, you want to all those things. But part of the reason why they don't get the funding or the seat at the table oftentimes is because they're not generating the revenue or impacting the top line or directly. And so what's kind of your thought on how maybe finance teams or Fpna can help with not just bottom line but also top line? Right. Especially how does that correlate? Can you kind of give maybe one or two examples how finance team? And I think that will go very well into the follow up question around business partnering. Right. But 1.2s how can again, finance or impact kind of the top line as well? 

U1

Yeah, I definitely think Fpna can have a big impact on the top line. Fpna has really become front and center since COVID and is much more viewed now as a strategic partner than just a back office cost function, which I know you deal with sometimes with procurement. I started my career and spent four years in procurement contract specialist for the government, so I understand what that can be like as well. But what I was going to say around revenue generating, I'll give an example. So 1.1s Amazon Prime, if we had an audience here and ask how many people have Amazon Prime? Probably almost everybody's hands going up. Right. Tons of people have it. And that was actually the way that was designed, was heavily influenced by Fpna. There were some proposals out there said, no, this would be the most profitable. They ran the numbers and said, hey, you should do it as we give free shipping, charge an annual subscription. Here are some of the benefits, here's what we think would happen. Now, obviously, they partnered with the business. Was that done in a vacuum? No, but it shouldn't be. But that's one example of really driving revenue and there's a lot others like that. I remember I had a general manager I'd worked with and helped on a number of different revenue initiatives. I helped come up with some ideas of how to improve margins on a couple of our largest customer contracts. They did the negotiation, but I did some of the price recommendations that resulted in improvements. And he commented one time that he's like, you're a really good partner to have because you don't just report to PNL, you help shape the PNL. And what he meant by that is you're helping drive the top and bottom line. And that's what a good Fpna professional should do, is they should be able to influence the business in a positive way. 2.8s

U2

It 1.8s to kind of follow up to that which you talked about in your course. 1.5s You talked about what is business partnering, storytelling and influencing kind of adding to kind of what you just 

U1

described? Sure. So we'll come back to business partnering for a minute. We'll start with influencing. Right. I mean, it's a pretty common concept, but generally finance doesn't have ownership over the groups they're supporting. Rarely do we have authority to go in and tell customer support, hey, you should do things this way, or to go to product and say if you made these changes, you guys would be more efficient. So one of the key things we have to do is we have to be able to influence them by helping them see why this is better for them. And the example I give that I'll always remember is early in my career we were working through some processes and to me it just made sense. This was the smart way to do it and told everybody in the business, this is how it should be done, and never got anywhere because I never actually tried to influence them and help them see why this would be beneficial to them. So I think that influencing process is really how Fpna is able to make a difference without having often the authority to implement what they think will help the business. So really, understanding people and understanding the psychology and helping to influence the decisions by explaining things in such a way that the business will get it and having those relationships. So that influencing is a big part of business partnering. But really, what I look at business partnering is it should finance a good Fpna professional. Whoever their supporting that business leader should always want them in the room. 1.3s That's when you know you're doing business partnering, right? When that person will if there's a meeting going on, I'll turn and say, Where's my finance person? And they ask you for more than just finance. The best fpna people have a deep understanding of the business. They understand the operational, they understand the economic. Sure. Do they understand it as well as the operations person? No, but they understand it well enough that they can contribute to those discussions, not just the finance discussions. They're not just there to say, here's the numbers. They're able to intelligently talk about strategy. And so I often kind of think of it almost as a strategic business partner. And then storytelling, right? How many of us have been in a presentation where gentlemen just slaps data up there and your eyes just glaze over after chart after chart after chart? And so being able to bring the visuals, the narrative and the data together and craft a story that really helps drive home the insights you gained is so important, and that I'll tell one other story on the storytelling really quick. When I was in grad school, I did the strategy case competition, and I had spent hours and hours practicing a presentation. I mean, I had down where I'd be standing when I'd say what word, how many fingers I was going to hold, 1.1s when I was going to pause, just had this thing down just about perfectly. I remember I gave the presentation. I gave one other that was similar, and the dean of the school, after seeing a couple and made a comment, hey, if we need someone to present, we're going to have you come in. Like, if we lose our presentation person. And I was just, like, glowing and went really? Well. Now, fast forward 15 years. And I had just worked on this presentation for, like, three months to put together this business case that we wanted to take. The CFO, my general manager had reviewed it. My boss, the regional CFO, had reviewed it. We're in front of the global CFO and get ready. We start presenting. We're about five minutes in, maybe ten minutes in. He's like, this is stupid. Why would we do this? And I'm like crap. What do I do now? Okay, this is not going well. And he calls in the general manager to the meeting. He talks to the general manager for about ten minutes, and he signs off on it. And I was just dumbfounded. I'm like, what just happened? And I remember I went to my boss and I asked him, and he responded with, your analysis was brilliant, but your presentation lacked. 1.8s That's the difference between being able to tell the story so that everybody can understand what you did that last mile is the storytelling. And if you don't do that right, the 90% before that can often go to waste. 1.3s

U2

And is that something you feel like is natural? Just kind of like salespeople in a way, right? It is a sales storytelling. Sales had a lot of correlation patient is that something they can learn from your course? Do you feel like that's something? What if that's not their personality? But they do need to do that in order to make bigger impact. How can they maybe learn that skill, you think 

U1

practice. I mean, anyone can learn to be a good presenter if they're willing to put in time. I know plenty of people they're introverts people that were terrible when they first presented presenting storytelling crafting. The story is about practice. Are some people naturally better at it than others? Sure, just like some are more naturally gifted athletes, more talented in that area, some are better at math. But it's still something that can be learned and you can learn it enough to be effective. I think everybody can become an effective presenter and storyteller. There are some that will always be better than others, but it's really a matter of how important is it and how much time are you willing to put in. And what we do in the course is we talk about principles that will help you be a better presenter and what that means. And we talk about business partnering and the importance of trust. And we give some framework and some ideas and we give you an opportunity to present, to consolidate the data and to bring the visualizations and everything you've learned from the course together. So that when next time you have to do a presentation, you're feeling a little more comfortable, you have some resources you can go to that can help guide you. 1.2s

U2

It. Yeah. So one thing you kind of talked through that I want to talk a few minutes on is a lot of times we see just like any department finance team don't have enough people resource time focused because there's so many things that they need to do. So when you talk about having the ability to learn about the other department's really operations and purpose and initiatives in order to really help them right, that partnering side. It's very difficult to be an expert in every category and every service, obviously. So what do you recommend as some things that they can understand the business, right. Not just talk about numbers, but kind of like what you were mentioning earlier, provide that strategic value yet, but there's just no way you're going to be an expert of that category or thing, especially if you're also a smaller team where you just don't have a lot of time. You could barely even finish everything that you got to do, right? 1.7s What do you suggest? 

U1

You're never going to be rarely as deep in knowledge as the business, right? They're doing marketing, they're doing customer support and other things for a reason, but things you can do. One, a good manager director should have a program when a new employee comes in. And I learned this the hard way and we did it and it was very beneficial. We started doing it when we were getting new hires is the first week they went and spent half the day on the phone with the salespeople and they spent a couple of hours with a product person and they listened into some customer support calls. And we tried to make that first week as much as we could about learning the business, to give them a good foundation beyond hey, just read this deck and let me talk to you for an hour, where they really went out and got to know the people. And then I encourage people, whenever possible, sit with the business. I remember going and sitting in our call center and listening to calls. I remember going and talking to our leader of sales. Can you do that all the time? No, but you can dedicate a couple of hours a month. Other things I recommend, and I've tried to do this in different jobs is find out what the industry, magazines, 1.1s news is and dedicate even if it's just 15 minutes or 30 minutes each week, learning about the industry. One I really did that a lot with is I worked in prepaid for American Express and American Express would send out this newsletter where they'd cold all the best articles about the industry and I listened to them every week and then found a podcast that talked about alternative lending. And I started listening to it, and it allowed me to better understand the business. Other things that can be done, go read the ten Q or the ten K of your competitor. 1.1s Because the management discussion they have will tell you about the risks, will tell you about the industry, and will help you a lot so you don't have to spend a ton of time. It's hard, but you do need to find a way to dedicate maybe it's an hour a week, maybe it's 30 minutes, depending on how busy you are. But you do need to dedicate some time regularly to learning the business if you really want to be effective and not just be the analyst or the data guy and if you want to move forward in your career. Because they're looking for that strategic thinking and the business knowledge. And that's only going to come from putting some time in. 

U2

Yeah, no, love that. And I think a lot of the technology is meant to also provide more time in automation so that they have more time to go do these strategic things. Right. So as we wrap up with a couple of last questions, 1s the pace of innovation has been tremendous in all areas. Not just AI, which we'll talk about last, but innovation of Fpna tools and procurement tools and just technology, where five, six years ago you had a few, now there's hundreds, now there's way too many options. You have an opposite of problem. Right. 1.8s What should the modern CFO look like in 2023 and beyond with obviously all of these changes in innovation that people have to keep up with. Right? What does that look like? Yeah, so, 

U1

you know, kind of funny. I recently wrote an article and I actually used chat GPT talking about AI, and I asked it to give me a list comparing the CFO of ten years ago to the CFO today. And you see strategic focused, commercial versus 110 years ago, risk focused, making sure the books are right, much more tactical, where the one today was much more strategic, much more data. And I'll give two other examples. So I had a guy on my. 1.7s Podcast a while back who is a serial CFO of startups. He's been a CFO of a number of different startups. And he goes, the CFO one day is basically be the chief business intelligence officer. And what he was saying is they're going to have to understand and really own data. You can tell a modern CFO because they typically own the analytics team. They're very data driven. They realize they have to understand the operational and financial. So I think the modern CFO, I'd say there's a couple of things they need to be more strategic and commercial focused and they need to have an understanding of how they can utilize the data to help move the business forward. And that often involves how can they think about a transformation, how can they think about cleaning up the data and getting it to the point where there's because we like to say one version of the truth, right, versus you ask every department, you get ten different answers on a metric. 

U2

So Paul, real quick on that commercial focus, can you kind of talk a little bit about that? What do you mean by commercial focus? Because obviously from a finance perspective, they're obviously savings driven or that could be looked at as commercial. But can you kind of explain what you mean by more commercial 

U1

focused? I think a lot of times that's really on the revenue side and looking at kind of customer and getting involved, not necessarily owning, but getting involved in pricing, that's an area where it could be commercial. Getting involved in really asking questions about our biggest customers and how we're selling and go to market. I'll give an example, revenue operations. I had a CEO on recently, I had a good conversation with, and he's been part of like five companies, everything from startup to public. And I asked his opinion where's revenue operations belong, should it be in sales or should it be in finance? He goes, if the focus is analytics, you want revenue operations in finance. If the focus is your tech stack, then it probably will sit in marketing. And if you have a really strong CRO that really is a revenue officer, not just a salesperson see, that's something commercial that the CFO needs to think about and have those conversations. Rev Ops sales commissions is a commercial thing and sometimes you'll see that sit in finance. I had one role where I helped develop and I was a key part of developing. I wrote them, I came up with ideas and ran them by the VP of sales where I put together sales plans for over 100 people, right? That's not a numbers thing per se. There's a lot of incentive and thought that goes into that that can be commercial. Now, should have I been the one to do it? That's a whole separate discussion. But I was asked to do it. It's what I did. And you see more and more things like that. So it's getting into more than just expense and really being able to help the business bring a finance lens, but also thinking strategy strategically with that finance lens. 1.3s

U2

I know. I love that. So the last one we like to talk about is AI. Obviously, you talk about Chat GPT and kind of how you ask those questions, and also not just with AI, because things that we thought, again, would come five years, ten years, literally it's here and then every month. The pace of innovation is truly incredible. Right. Literally, these innovation literally used to take years. Now suddenly it's like Google seems like they're dusting off AI they built five years ago but too afraid to come out with it. Now suddenly they're trying to come out with something new every week. But how does all of this AI, chat GPT or capability you think can potentially impact or benefit Fpna 2s and finance teams? Not just in specific software, because you're going to see software implement those type of tools, but how do you see maybe in general, fpna and finance team can utilize AI in the future? 

U1

Yeah, there are a lot of different ways. I mean, I think the first thing is looking at the algorithms are getting better and better. Some large companies, microsoft uses algorithms for its revenue forecasting and has found that's more accurate than the human. Now, that doesn't mean they ignore the human. The human reviews that and they work together. But they got some really good algorithms. They've made them public. So I think that's one area you're going to continue to see. But that often requires a lot of data to get an accurate algorithm to train it and get it to the point you need. So I think that's one area you'll see, I think you see anomaly detection. You've seen it with fraud, you'll see it with Fpna running trends. But I think some of the other things you're seeing is some of creative tools are calling it like copilot, almost like a junior analyst. You can ask it if the data is there, it will summarize the data and write the email for you or tell you what graph to use. Like I've used Chat GPT and I said, here's my data set. What graph should I use? And it returned. What would be the right graph for it? So it can really shorten that learning curve and make you more effective in libraries. An Excel formula, writing email, something as simple as that. I've used it to even help me get some ideas for outlines for a course. Right. Hey, how should I think about an outline for this course and then going through and reviewing it and making my changes? But it can just so many different ways. I think people just need to experiment and get comfortable asking it questions, learn how the prompt works for learning language models, but also thinking of algorithms, how you can use AI, how you can use it for benchmarking and finding new trends. Like, I'm sure procurement, you guys, right? There's a lot of opportunity when you have a lot of data to be able to benchmark and use AI and machine learning and different things to find where savings can be. 1.4s

U2

Yeah, no, 100%. I think that might be a new course you got to build, man. That might be a big one or maybe already doing. Or there is 

U1

a friend of mine that does have an AI finance course and I've toyed with it. There may be something here in the future, but if people want to take one right now, I'm going to give a shout out to a friend of mine, Nicholas Boucher. He has a great chat GPT AI focus course, as well as guide that he sells. I think the guide is like $27. It's like 100 pages of different things you can do with chat GPT to help you be better in your finance job. So check him out and I do I have a digital course I'm working on and we are going to incorporate in some of the visualizations chat GPT. I want to have it in a couple of the sections, so it will be 

U2

coming. Everyone's going to have their own copilot. Yes, it's an interesting future. 1.5s Let's see where it goes. But the last question we always ask our guests is, look, you've seen a lot, you've done a lot. If you have to give one personal and or business advice, whatever it is that maybe you're most passionate about, what do you think that would be? 1.3s Well, that's a great question. I think the one piece of advice I'd give to people is be willing to fail. Don't be afraid of failure. I still remember I taught at a summer camp almost 25 years ago now, I think it was, and we had like, these eight keys to success for the kids, and one of them was, failure leads to success. So I'd urge people to be willing to experiment, be willing to fail, and realize, as a rich man once told me, the guy was worth about a billion dollars. He goes, I've never had a failure. I've only had a learning experience. And that's always stuck with me. 1.6s

U1

Yeah, 1.4s

U2

that's definitely kind of that American dream. I think anything is possible because you see other people do it, people that have nothing and you can achieve anything. Right? So I think it's that, like you said, you you learn a lot from the failure. So it's a lot of great insights. And for any finance teams that wants to upskill your team and kind of learn more about Fpna, definitely reach out to Paul and the Fpna guy. No, I appreciate you having being on the show. 

U1

Yeah, thank you for having me, Victor. And like I said, anyone who wants to improve, even some in supply chain or procurement, we have some excel stuff around that as well. But in general, most our training is very much finance focused. But, yes, please reach out. Always happy to see how we can help teams be more effective. 

U2

That was an amazing episode of the did you know podcast with Varisource. Hope you enjoyed it and got some great insights from it. Make sure you follow us on social media for the next episode. And if you want to get the best deals from the guest today, make sure to send us a message at sales@varisource.com.