How Founders Mistake Models Only for Fundraising and What They Should Do With Ilyas Anis
Ilyas Anis Paul Barnhurst speaks with Ilyas Anis, CFO and Chartered Financial Modeler, about using financial models to build stakeholder confidence, drive operational decisions, and tell a clear business story. Ilyas shares insights on integrating AI, avoiding common modeling pitfalls, and the importance of scenario analysis and three-statement models.
Ilyas Anis is Finance Lead at Turning Point Brands Canada and Founder of IMnS Associates. He has 15+ years of experience in financial modeling, valuation, and governance across multiple industries. An FCA, CPA, AFM, and FMVA®, he is also a board advisor and AI enthusiast.
Expect to Learn
Models build trust, not just numbers
Connect finance with operations for better decisions
AI is a helpful junior analyst, but human judgment matters
Scenario analysis and storytelling are essential in models
Here are a few quotes from the episode:
“Stakeholders don’t pay you for getting the right thing. They pay for the confidence.” – Ilyas Anis
“Financial models should open every Monday morning, they shouldn’t die after fundraising.” – Ilyas Anis
Ilyas Anis highlights how financial models go beyond numbers to build trust, enable strategic decisions, and communicate a clear business story. He emphasizes the role of AI as a supportive tool, the importance of connecting finance with operations, and practical strategies for building models that deliver actionable insights for stakeholders.
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In today’s episode:
[00:00] – Trailer
[02:35] – Early Career Horror Stories
[04:28] – Storytelling in Models
[09:52] – Fundraising vs Operational Models
[12:39] – Connecting Finance & Operations
[18:36] – Revenue Models as Foundation
[25:29] – AI in Modeling
[27:38] – Automating Dashboards
[34:30] – Rapid-Fire Modeling Best Practices
[42:03] – Final Advice
Full Show Transcript:
Host: Paul Barnhurst (00:40):
Financial Modeler's Corner is the world's premier modeling podcast. It is brought to you by the Financial Modeling Institute, the world's leading financial modeling accreditation organisation. Welcome to Financial Modeler's Corner, I have your host, Paul Barners. This is a podcast where we talk all about the art and science of financial modeling with distinguished financial modelers from around the globe. The Financial Modeler’s Corner podcast is brought to you by FMI, the Financial Modeling Institute. FMI offers the most respected accreditations in financial modeling and that's why I completed the Advanced Financial Modeler, the A FM. I'm thrilled to welcome the show Ilyas. IUs. Welcome to the show.
Guest: Ilyas Anis (01:27):
Thank you. Nice to meet you.
Host: Paul Barnhurst (01:29):
Nice to meet you. So we have IUs and ice. He is a corporate finance executive and a chartered financial modeler. I'm a little jealous. I told myself I'm going to take the CFM. I have it yet with 15 plus years of international experience in financial modeling, valuation and governance across regulated industries including cannabis, tobacco, higher education fashion, and FMCG. He serves as finance lead at Turning Point Brands Canada and is founder of IMNS Associates, his financial modeling boutique where he has built investor facing models for founders who have collectively raised over $1 billion. He has his F-C-A-C-P-A-A-F-M and FMVA. He is also a board advisor and AI enthusiast. He has 7,000 plus followers on LinkedIn and writes regularly on forecasting capital strategy and leadership discipline. So again, welcome, excited to have you on the show.
Guest: Ilyas Anis (02:34):
Thank you Paul.
Host: Paul Barnhurst (02:35):
Alright, we start every interview with this question. Tell me that horror story with modeling worst experience, go wherever you want. Everybody has some kind of horror story somewhere along the line.
Guest: Ilyas Anis (02:46):
So let me start where I really start. I think it's been 14 years. So initially I was having a job in a firm, an audit firm. So that's where my career started and once that complete sub, so I started my business, which is IMS Associates, which was side running with my audit firm experience. I was having my partner like Suhail, he's still with me. We were using a side project, whatever projects came up. So we started doing that. When we move on, it was horrible. We were taking all of the projects, bookkeeping, excel modeling, chaotic spreadsheet, helping owners who don't understand about their own business, like what actually are. So what I learned really in those year that small and medium sized businesses don't have a finance problem. They have a visibility problem, they can't make a good decision. So a strategic side, which I think is really missing in the financial model especially. So that's where I shifted my career in helping those businesses. I have seen many, many terrible spreadsheets Still there is not a translation of those spreadsheet into a strategic side.
Host: Paul Barnhurst (03:55):
Yeah. So obviously one thing that you mentioned that was missing a lot is the whole strategic side. There's the spreadsheet there, but no real understanding of how it ties back to strategy. Correct. I would imagine that's probably most models you see that's the case I would guess
Guest: Ilyas Anis (04:13):
I would say 99% of the models.
Host: Paul Barnhurst (04:16):
That doesn't surprise me. So would love to know. You've led me to a question there. You say majority of the models don't have it. What do you see when you see one that does have, what's the key difference?
Guest: Ilyas Anis (04:28):
So first of all, financial models are really objective. They they're not subjective. Balance sheet should tie up. Profit and loss should be flowing into retained learning. The statement of changes, equity should be there, cashflow should tie up. It's really simple. So all financial model, I think like a hundred percent of them, they are really fine, but the key thing is the translation and there is a storyline which is really missing in these financial model. So that's where there's a real gap. It is.
Host: Paul Barnhurst (04:56):
That makes a lot of sense. At the end of the day, the statements, what should be included in a model are relatively objective. There's not a lot of subjectivity. If you're building a three statement model, you need three statements and you need the schedules that go with it, how you build it, what schedules you include, whether you do a free statement or just the p and l, all that, there's some subjectivity, but at the end of the day there's definitely some objective to it. But the strategic side, the storytelling, how you do all that gets very subjective.
Guest: Ilyas Anis (05:29):
I think the storytelling that we are missing should be a model, but when you present and translate this story in front of the end users, ultimately the numbers should make sense. It should not be for the end user. We are preparing this for the investors. So investors will be fine. He knows what he really gets, but the financial model will be sitting in the closet the day after nobody's going to use it. So it should open every Monday. There should be the operation like a model first, which should be translated into the financial model and there should be storytelling and business owners, the end user should know where they're looking to foresee their business, maybe in one year, two year, and their vision should be correctly described.
Host: Paul Barnhurst (06:12):
Makes a lot of sense. So I want to step back a little bit. You mentioned you started your business, think about 14 years ago. What led you to start your own business? How did that come about? I know you're doing some audit work, so tell the story.
Guest: Ilyas Anis (06:26):
Yeah, it was just like a side project and obviously I live in Pakistan so I started my audit experience over here and we have an audit front, but I always like to work globally with international clients. So back 15 years ago, I was very young, so I started a site project with my partner IL and we founded the company IMS associates over here and we started doing some small conservancy projects, Excel modeling as I said, and restructuring things, bookkeeping issues. Then over the years it gradually improves. Then we shifted towards financial modeling decision-making, fundraising, investment banking, and gradually we moved on ultimately with the strategic CFO side.
Host: Paul Barnhurst (07:12):
So it kind of build over time. I'm curious, what is it you like so much about bottling? Obviously you do a lot of it. What is it you enjoy about it?
Guest: Ilyas Anis (07:21):
It's objective. So let us know ultimately there is a procedure, there's a regulated rule, it's objectivity, it's not subjective. Ultimately the things would tie up, but the moment there is one issue over there, but the moment you open a model, every assumption is down the table. Either the numbers will tie on I, so it forces the business conversation to be honest. And one thing, again, I would tell that the model is not the point. The argument that lets your business is the point,
Host: Paul Barnhurst (07:54):
The discussions, the assumption, the planning, the model is an output. It makes sense. And you mean a model? The balance sheet has to balance. That's not subjective, that's not subject. We had a model that didn't balance. We asked AI to fix it. It's been a while. And finally AI came back to us and said it was only a 0.3% variance and that was okay. It was small. We're like, no, no, that's not how financial modeling ignored order. This isn't pick a number that's close and call it good enough.
Guest: Ilyas Anis (08:31):
Yeah, exactly. When we are an audit fund. So I would say if the trial balance is tied up, even if it does not have a difference, so the balance sheet should not be having the rounding of difference. That should be the basic principle if you have done correctly.
Host: Paul Barnhurst (08:46):
Yeah, balance sheet all is balanced. I get sometimes when you get the, I had a model that I updated and I would get the balance sheet income statement. For whatever reason cash was always off a few dollars. We're talking like 20, 30 bucks on millions and I'm like, all right, I can plug in an adjustment, nobody cares about $30. I'm not spending hours finding it. But balance sheet, no I'm not plugging. If it doesn't balance to zero, I'm going to go search for it. But small transaction where something that I'm not going to spend the time to find $20. So I get it. So when you and I chatted a while back, you had mentioned a lot of early stage companies, they only want their model for fundraising. I need my model. They investors have asked, they get it, they go raise their funds and you've seen that I'm sure plenty of times where they want that. But I know you've mentioned that you do think that's a bad idea. So talk through that a little bit why that's a bad idea. Why do you think founders are so set on, hey, just give me a model for fundraising help to raise my money and that I'll go do my thing.
Guest: Ilyas Anis (09:52):
I believe that financial modeling, if the core vision of financial modeling is to prepare for the fundraising, there is a problem that it's going to be optimised for one audience, which is the investor for fundraising. It's going to be for one moment and there is going to be one outcome and it'll die after the term sheet is signed. So the moment like the financial model, the main core purpose of the financial model, it should open every Monday morning.
Host: Paul Barnhurst (10:22):
How many companies actually do that?
Guest: Ilyas Anis (10:24):
They are preparing like the operating model and we have done this before. They are using it like a bible. So there should be operational model we should translate about pricing, hiding inventory, cash management. There should be everything which should tie it up. The actual should be plugged up, the storytelling should be there, all of their vision should be translated. So that's how I think the game changer can happen, but it should consolidate all of the things, the full business story into this model.
Host: Paul Barnhurst (10:59):
That makes sense.
Guest: Ilyas Anis (11:00):
And one more thing I would say that if the finance is not connected with operations, so the finance who are building the financial model, it's not a model, it was just a pitch deck with having the formula.
Host: Paul Barnhurst (11:14):
Why do you say that? Elaborate on that a little bit.
Guest: Ilyas Anis (11:17):
Because if finance is considering itself as a different function, because ERP is the one that was built for originally for finance and what's the purpose of the ERP that it connected all of the departments together. So ultimately the finance is the core function that should connect all of the departments because it's going to generate the money, it's managing the finances. So ultimately the cash is going to be blended over there and cash is scheme. So strategic decisions should come from you
Host: Paul Barnhurst (11:49):
By the way. I agree with you. I just want to hear your thinking. I'm not challenging you on that. I say all the time and one of the best things at an FP&A professional I think applies to modeling can do is learn the operations of the business. We're translating things from a financial lens, we're looking at it from financial numbers, but if we want to have real conversations, we have to understand the operations where the conversations happen. They don't happen with financial numbers in isolation or they shouldn't. I've seen them happen that way, but they shouldn't happen that way. We've all seen, like I said, the models that are built and forgotten and have no tied operations. Okay, what good does that do you? Maybe a little bit. You had some thinking, you built it, maybe it helped clarify some things but you don't get the true benefit for sure.
Guest: Ilyas Anis (12:39):
Exactly. It's the same thing as ai. There is a level one of the AI generating answers, generating your emails, writing your response. But there is a level, the next level of ai, the ecosystem, it should automate everything but very few people in the earth knows about that. They're using ai, just using the basics.
Host: Paul Barnhurst (12:59):
Yeah, it's getting better and better. The way I've heard it from some experts is kind of two ways. There's the efficiency side of AI and I think everybody's getting some efficiency, how much you can debate. And then there's a second layer where when it's properly set up in your systems, it can kind of be a decision layer. So go beyond automation and help do that analysis and make better decisions. Obviously human has to be in the loop, but I agree with you and there's everything in between from hey, we've automated, we're getting a tonne of efficiency to hey, it's also helping us make better decisions. I've used it to think through a number of things in my business and not always the best of following it may not always agree, but I use it quite a bit now to clarify thinking and help me try to
Guest: Ilyas Anis (13:48):
Things. Things is the only thing which everybody's learning at the moment. Everybody's the learner.
Host: Paul Barnhurst (13:54):
It's amazing what you could do with it. We'll come back a little more to AI for sure. Before we get there, I want to ask you a question. So as I was looking at your LinkedIn feed, you made a comment one time where you said waiting for full clarity, delays progress more than bad timing. Does it walk me through that? Elaborate on that one.
Guest: Ilyas Anis (14:17):
Yeah, so many people go on to be perfectionists. So they try to collect, you spend two weeks preparing the scoping documents, collecting all of the right assumptions so they spend too much time in scoping documents and try to finish the model in ash. So I think quality depreciates when they wait to collect all of the things. So I usually talk and make a line, it's better to be vaguely right than pretty precisely wrong and clarity, that's what I mentioned on LinkedIn, that clarity is not upstream of action, it's basically the downstream of it. So I always use, let's complete 70% of the model by having just the initial assumptions and maybe just to be perfectionist, let's use it afterward because when you send the model to clients or maybe to end users, more vision, clarity for the business owner on the end user will come up. So we can make it much better rather than waiting for three weeks just to collect assumptions and saying this is your issue in your accounting system. We can't proceed without that. So don't spend too much time on clarity.
Host: Paul Barnhurst (15:32):
So I have to share because just this week I read the outline of, I dunno if you know who Osaf Masani is, but some of my audience may recognise him, runs a business around FP&A training and you wrote a book called the Precision Trap and it's kind of like your clarity idea. The whole point was in finance, especially if you came up through accounting, you're trained to be precise. So you want all the details, you want everything to tie out, but the world has changed half the time doing that, you've missed the opportunity, which gets to your bad timing. It's like, well we already made a decision, we knew it would take you guys two weeks to button up your numbers or Oh, that's great, we should have done that. But the company was already sold because somebody else said we're good enough with 80% information.
(16:15):
So we've missed the opportunity. And so I think you make a really good point and he goes through and he talks about it's not the finance is doing anything wrong, so we need to retrain the way we think the world has changed. You can't wait for full clarity, bad data is everywhere. You have to say, okay, it's good enough, let's go forward. Now there may be times you may need to be a little more precise than others, but I totally agree with that now kind of philosophy. And so speaking of that, speed versus clarity and precision, how do you draw the line or how do you decide good enough is good enough? Do you know what I mean?
Guest: Ilyas Anis (16:53):
Yeah, so I always start with revenue modeling. So I use the 80 20 rule, 80% of the model is covered from the revenue model. So once you have the assumptions for the revenue model, meaning how the business actually makes money, what the drivers are, who pays whom, how the cash moves, what are the revenue assumptions, everything. So I think if the revenue model is there, we can build 80% of the model.
backgr
Host: Paul Barnhurst (17:20):
While my background is in fact, I am also passionate about financial modeling. Like many financial modelers, I was self-taught. Then I discovered the Financial Modeling Institute, the organization that offers the Advanced Financial Modeler program. I am a proud holder of the AFM. Preparing for the AFM exam made me a better modeler. If you want to improve your modeling skills, I recommend that AFM program podcast listeners save 15% on the AFM program. Just use Code Podcast. Really good point. I mean I've heard people say, look, get the revenue. Everything else can be ratios and percentages off revenue, especially for long-term assumptions because in an industry roughly, okay, my cost of goods sold is going to be 22%, my head count will be my margin. And you could build all that in and that tells you how much you need to grow. So I agree with you. If you have a really good understanding of your volume, your pricing, your products, everything that goes into your revenue, the rest of it, for the most part there are exceptions, but for the most part is a math exercise.
Guest: Ilyas Anis (18:36):
Yeah, yeah, exactly.
Host: Paul Barnhurst (18:40):
Especially if you have businesses to have step increases or a lot of non-linear stuff, then it gets a little more important. Okay, we have to add a whole new factory at this point, right? You got to get that right. But as long as it's in that curve of relatively linear and you just kind of grow it as revenue grows, it's pretty simple exercise. Yeah.
Guest: Ilyas Anis (19:03):
So modeling is like writing the first draft is going to tell you what the second draft is going to be. I would rather start with partial clarity. I'm a fan of it.
Host: Paul Barnhurst (19:14):
I'm going to share one more example because you're really hitting an important point. I was talking to a head of FP&A at a public public company, good sized company and he commented, he's like, I need my people to realise it doesn't need to be perfect. Stop with so much complexity, just get me an answer. I don't care if it's kind of back of the envelope sometimes I just need answers. So any thoughts on how we overcome that? Because it's definitely a trade. I was guilty of it. A lot of my career being way too detailed. I still am. I have to remind myself it doesn't have to be perfect. It's good enough. And so any thoughts on how you help yourself overcome that tendency to want to be precise and detailed? I mean, what have you done that's helped you be able to go, Hey, good enough is good enough?
Guest: Ilyas Anis (20:04):
The thing is that when we are having discussion with the end user and the stakeholders, so sometimes when I say sometime in 5%, we get all of the details in a very organised way, the precise way. And so it's skill. So it's good, it's good to have a precise information, but many times 95% of the time, even the business owners don't know about their business. What's happening with AP department, payroll department, what's happening with how much inventory do we have, how much inventory sitting in their Amazon? So there are things like which needs clarity over there. So obviously these assumptions would be needed to make the end financial model or less perfect. But to start just to push, I would say let's start with whatever you collect. Don't stop yourself because many experts I have seen this is resistance because the scoping document cannot be finished. We cannot just start unless the scoping documents gets finished or the scoping document should have been having all of the information. So I think there is some resistance and there is some friction which we have to avoid because there is a huge gap which has been created between financial models and end users and due to this behaviour.
Host: Paul Barnhurst (21:17):
Alright, so I'm going to keep moving beyond the clarity discussion, although I think we could spend the rest of the time there because it's definitely an area we could all get better at in finance. And so I think the key takeaway is look, you're not going to get perfection most of the time. Just move forward, do the best you can with what you have. And remember that as you said, a good decision is better even if it doesn't have full information than waiting a few weeks in most situations. So I had a boss that always said, Hey, if it's 80% right, I'm going to go ahead and make the decision because the cost to get to a hundred is pretty much never worth it.
Guest: Ilyas Anis (21:58):
Agreed.
Host: Paul Barnhurst (22:00):
So same idea. I remember I learned that one early in my career. What's your favourite industry to model? You've obviously built a lot of different models, different industries. Do you have a favourite?
Guest: Ilyas Anis (22:12):
So almost like I have worked with everyone, I can count on that one, but there are a few specialised one. But what I really like if you ask me, I like to prepare operationally complex business with having multiple revenue streams. I know this is difficult, but this is not about harder. For example, there is a business having retail business wholesale revenue stream, e-comm D two C, that's where this interesting flavour comes up. Or maybe there is an education business with having multiple campuses or maybe if there is any consumer brands with having a wholesale business. So it's not about, the reason is not that they are harder. I like to make things harder. Basically the key reason is that there is a decision making which is very interesting over there because business having a different revenue stream, different cogs structure, different pricing structure, and the money which is flowing at a different timing so that it gets very interesting. When we are talking with the end users and the stakeholders about the decision making, it becomes really fun and I really enjoy it.
Host: Paul Barnhurst (23:21):
Bad financial models can lead to bad decisions or worse. So how do you minimise the risk of a bad model? You make sure the models you build are great Financial Modeling Institute developed the Advanced Financial Modeler accreditation programme to help modelers like you. The AFM programme offers a step-by-step approach to building world-class financial models. The programme ensures that you know the best practises in model design and structure and will help you brush up on your Excel and accounting skills too. Be the one on your team to build great models. If you want to impress your boss and your clients, get a FMI accredited podcast listeners, save 15% on the AFM programme. Just use code podcast at http://www.fminstitute.com/podcast.
(24:38):
We had a call centre, we had mail, we had digital campaigns, we had subscription, we had one time revenue. We had a mixed Salesforce that supported two different businesses. You had to split all what they were selling in the model. I really enjoyed it and the data was a complete mess and that's putting it generous. I've worked a few different companies, it was by far the worst date I ever dealt with, but I love the challenge so I can relate to that as much as I joke. I get it. It's probably why I have five different businesses in my business in a bunch of different rep history. Interesting. All right. Ai, you talked about it earlier, but let's talk about it in the term of financial models. What testing have you done? Talk about your experience so far.
Guest: Ilyas Anis (25:29):
Yeah, it's changing the world. Nobody imagined just five years ago what is happening. So it's really fun what's happening and everybody's feared about it, but I always say to my associates and colleagues that AI is the best junior analyst so far. If you treat it like a junior analyst. So it's brilliant that whatever things we are that we're eating my time. So it saves a lot of time cleaning up the messy data generating formula. It also gives, sometimes we see very complicated formula and it gives the reasoning, sometimes it explained the inherited model, but there are a few the cases where it falls apart. For example, where the junior analyst falls apart, I believe it's the judgement reasoning and strategic decision making and the storytelling because maybe it can work up in future nobody knows about and maybe after five years what is going to be the game changer. But still, I believe it is not going to replace the modeler. I have seen in LinkedIn and everybody's talking about it, it's going to replace the accounting function. I think it might be bookkeeping and accounting function. It has started replacing. But in terms of modeler and strategic side, I don't think it's going to replace because thinking is still yours. The strategic direction and the decision-making, what we call business finance decision and the strategic financial management still, I believe there is a huge gap, which AI is going to take a lot of time.
Host: Paul Barnhurst (27:11):
I agree with you. I think AI is amazing. I think treating it like a junior analyst is the right approach. I always like to say human led AI and system, we're still responsible for the thinking or responsible for what we produce. So I think some great examples. You mentioned formulas is one. What's the favourite thing you've automated so far that you used to have to do that you're like allow AI's doing it now?
Guest: Ilyas Anis (27:38):
Right now I am preparing many, many Google sheets and preparing a lot of lot dashboards which are linked with Google Sheets and using apps script, which I wasn't aware about how to use Google Apps script. And it's really fun, the things that they are linking with each other and AI is generating the script for that one. So it's really fun and the visualisation is really amazing what it's developing in terms of HTML dashboards and visualisation. I know we have been using everybody using this Power bi, but obviously Power BI coding and all of this restructuring Power Q, we cannot replace it, but it saves a lot of time. So I believe the automation is, the stakeholders are happy, they can see what's happening. But there is one thing with ai, I think AI is causing dumbness. Why is that? Because everybody, if you see LinkedIn or maybe some post, even the job post which is coming on LinkedIn or maybe on any other platform, everybody's using that.
(28:37):
The emails which I'm reading right now, it's not human. It does not sound like human. Everybody's using it and I'm not sure what will happen after two years or maybe for the next generation what will happen. I think their logical skills and technical skills, their brainstorming things because they're relying totally on ai. So you need some basics. Your basics is really important. People ask me, do I need to learn how to tie balance sheet a hundred percent. Otherwise, if AI is going to throw you something and AI makes the assumption, AI makes lots of assumption itself rather than telling you what if it assumes something wrong, how can you watch it?
Host: Paul Barnhurst (29:17):
A lot of great stuff on Pack Bear. But I have to say, we've got to end the show. You use Google Sheets. Not kidding, this is a modeling podcast. Now I've used Google Sheets, but I think you're right. There's a real fear that if we let AI take over, I saw an article online where they were finding in some situations if you started on your own and then used AI to finish something, this was in research, like education and stuff, you learned much better than if you started with ai. Even if you tried to finish it on your own. It was interesting. There's something to be said of the struggle, the learning, the foundations, yes, you want to use ai, but if you become dependent on it, like you said, there's a real fear and I think I've gone on record saying I think AI will be as dumber as a society. I think social media has done it. So I have no reason to think AI wouldn't. Unfortunately unless we're forced to struggle, we take the path of the least resistance. It's kind of human nature.
Guest: Ilyas Anis (30:24):
That's correct. I'm with
Host: Paul Barnhurst (30:26):
You.
Guest: Ilyas Anis (30:27):
Yeah, and one thing you asked about, I think the formula which you asked, which I'm very fond of. So there are many, many formulas which are in Excel and Google sheets add a formula, dynamic ranges, but still I love the basics. F two, F nine, those.
Host: Paul Barnhurst (30:47):
Yeah. Yep. Keep going.
Guest: Ilyas Anis (30:51):
Basically it's not about shortcut, it's the diagnostic mindset. I believe what I'm using, I was just using, thinking about myself, what I'm really using a lot. So I think F two and F nine, which I'm using a lot.
Host: Paul Barnhurst (31:05):
So those are the favourite shortcuts. The F two and F nine. Yeah, I get it. F two is incredibly helpful. F nine, if I'm not doing dynamic rays, I love F four. But as you start making more and more things dynamic, it doesn't matter as much. Or if you're working tables, Microsoft, if you're listening, fix it. Allow me to do F four and table formulas. But anyway, I digress. I'd love to know what's the number, if you look back at your career so far, number one lesson you've learned that's helped you the most?
Guest: Ilyas Anis (31:39):
I think number one lesson I already communicated before, but I think everything needs to be right. I totally agree. Build the right model. It should give you the right answer. There should be the storytelling, it should produce the right forecast. But the key thing, which I've learned over the year, the business, the stakeholders don't pay you for getting the right thing. They pay for the confidence. So the modeling is basically the artefact. If you see cloud, like their alive artefacts over there. So it's basically the artefact, but the product is basically the trust. So models should tell the storyline, recently I worked with, I prepared the model and it was showing 45% inhibitor. I told them nobody competitor was making is searching. I have researched about it and tend suit unless and until. If you're confident, if you have a confident, if you're visionary and if you believe in your product that you can make that go for it without reason. And trust me, that business owner, she presented in front of the investor and she caught the 5 million easily and they invested. Not in the model. Model was the helping thing, but it basically the vision, what's the vision is. So judgement is the job.
Host: Paul Barnhurst (32:59):
Appreciate that. Alright. What's the most kind of fun, unique, strange, whatever word you want to use, thing you've done with a spreadsheet in your personal life?
Guest: Ilyas Anis (33:12):
I think my own personal finance tracking todo list, travel plans and I use it in everything. I try to avoid some of the subscription software. I try to automate things over there. So I have a dashboard in my Excel online where I choose to track whatever my portfolios are or maybe my bots I need to do in to-do list. So it gives me the automated email every day. That was I need to do. There is a daily digest which I receive based on that one.
Host: Paul Barnhurst (33:42):
So you're saying you use it for everything?
Guest: Ilyas Anis (33:46):
Yeah
Host: Paul Barnhurst (33:48):
And
Guest: Ilyas Anis (33:48):
I feel proud about that. Whatever things I've learned and I'm still using in my daily life, I'm very proud of it.
Host: Paul Barnhurst (33:55):
Alright, so we're going to move into rapid fire. So I'm going to tell you how this works. First off, the rule number one of rapid fire is you can't say it depends because nobody wants to listen to you say it depends 15 times. So you have to pick a side. Yes, no. Or if there's other options, you have to pick one option then when we finish. So we'll run through all of 'em. You could elaborate on a couple. I realise there's nuance to all of them, but if you say it depends on everyone, it defeats the purpose of rapid fire here and having a little fun so people can be like, I disagree, I think it should be this or that makes sense.
Guest: Ilyas Anis (34:30):
Makes sense. Let's start.
Host: Paul Barnhurst (34:32):
You ready? So here's the first one, circular references in models. Yes or no?
Guest: Ilyas Anis (34:37):
No, but
Host: Paul Barnhurst (34:39):
You can elaborate at the end. I'm going to hold you to it. I know there's a big but everybody has that. VBA, yes or no?
Guest: Ilyas Anis (34:47):
No.
Host: Paul Barnhurst (34:49):
Lambdas in financial models.
Guest: Ilyas Anis (34:51):
Yes.
Host: Paul Barnhurst (34:53):
External workbook links.
Guest: Ilyas Anis (34:55):
No, no, no, no.
Host: Paul Barnhurst (34:56):
Yeah, I've had other people use more colour for language on that one. Should modelers be keyboard warriors? Yes or no?
Guest: Ilyas Anis (35:04):
Okay. There is too much obsession.
Host: Paul Barnhurst (35:06):
Do models need to be print ready?
Guest: Ilyas Anis (35:09):
Yes.
Host: Paul Barnhurst (35:10):
Really
Guest: Ilyas Anis (35:11):
Less big? Yes.
Host: Paul Barnhurst (35:13):
Is it ever acceptable to use merged cells?
Guest: Ilyas Anis (35:16):
No. Big, no.
Host: Paul Barnhurst (35:19):
I had one guy that says use merged cells. Go to hell. That's his saying. So there you go. Alright. Should financial bottlers learn python? Except
Guest: Ilyas Anis (35:30):
Not to a high extent, but yes to a basic level.
Host: Paul Barnhurst (35:34):
Okay, give you that. Should financial modelers learn power? Quick,
Guest: Ilyas Anis (35:38):
Big, yes. Big yes. What about
Host: Paul Barnhurst (35:40):
Power bi?
Guest: Ilyas Anis (35:41):
Yes.
Host: Paul Barnhurst (35:42):
Okay,
Guest: Ilyas Anis (35:43):
Non-negotiable.
Host: Paul Barnhurst (35:44):
Should every financial modeler be able to build a fully integrated three statement model?
Guest: Ilyas Anis (35:50):
Yes. Otherwise he's not a modeler.
Host: Paul Barnhurst (35:54):
We'll come back to that. We'll, we'll Excel ever die.
Guest: Ilyas Anis (35:59):
No, it won't
Host: Paul Barnhurst (36:01):
Have you. Actually, I already know the answer to that one. You mentioned you used AI with some modeling, so we'll skip that one, but what financial statement is most important for modelers? Income statement, balance sheet or cash flow Statement.
Guest: Ilyas Anis (36:12):
Cashing
Host: Paul Barnhurst (36:14):
Favourite. LLM. Claude Copilot chat. GPT, Gemini,
Guest: Ilyas Anis (36:20):
Klar.
Host: Paul Barnhurst (36:21):
All right. If you could only pick one for the rest of your life, for all of your models, what are you picking? Sensitivity analysis or scenario
Guest: Ilyas Anis (36:31):
Scenario analysis.
Host: Paul Barnhurst (36:33):
I might have to stop asking that question. So far it's a hundred percent scenario. Not much of a debate.
Guest: Ilyas Anis (36:38):
Alright.
Host: Paul Barnhurst (36:40):
Do you believe financial models are the number one corporate decision making tool?
Guest: Ilyas Anis (36:45):
No. No. What
Host: Paul Barnhurst (36:46):
Is?
Guest: Ilyas Anis (36:46):
It's just the artefact and I say basically the conversation is the tool. The strategic thinking is the tool, the translation of the model.
Host: Paul Barnhurst (36:54):
And what is your lookup function of choice? Choose vlookup, index match X lookup or something else?
Guest: Ilyas Anis (37:02):
X lookup
Host: Paul Barnhurst (37:04):
Alrightyy. Yesterday I had some, they're doing some fun if that's their favourite lookup. She was also a mathematician, so go figure. Alright, so first pick a couple. Which ones did you, there were a few, I know you did a button on circular references, you hesitated on a few. Where would you like to elaborate?
Guest: Ilyas Anis (37:24):
I think circular reference. We cannot avoid this in few things, especially in revolvers. We have to use it. We have to turn on iterative calculation just to avoid this. There are a few instances, which might be the 1% out of hundred, but we cannot avoid this in terms of vb. I think VB is decreasing. Lambda has come up. So maybe there is a huge help. Lambda is helping. So I think Lambda is great and it's overriding VBA.
Host: Paul Barnhurst (37:54):
Any others you want to elaborate on?
Guest: Ilyas Anis (37:56):
I think there is one thing Excel will die. So every tool which has ever tried to kill Excel, it has like that tool is specifically becomes the addin for Excel. So I have been hearing since 15 years.
Host: Paul Barnhurst (38:12):
So true, there's a video out on YouTube, I won't name the company, but it had rest in peace, Excel. This software will kill Excel. Within three months of that video, that company had pivoted to advertising that their tool was an Excel added more than it was its own spreadsheet.
Guest: Ilyas Anis (38:32):
Exactly. And I have been listening to this for the last 10 years. There have been a lot of tools and ultimately there has become guidance.
Host: Paul Barnhurst (38:40):
Yeah, I've seen someone who's been making the ED Excel will die in the next five years and I just don't see it. I understand where you're coming from and other tools have benefits for sure, but it's not even about is Excel the best tool for the job? In many cases it's not, but it's the most flexible tool and it can do the most things and it's built into, everybody uses it. It's training virtually free. How do you overcome all that? It's more flexible than any other tool unless you're doing a spreadsheet. It's pretty much the biggest company in the world backing it. It's virtually free training, virtually free, and it has a user base of nearly a billion people. I mean, it's going to have to be something pretty revolutionary to overcome that. Do I think it will eventually die? Yes, everything does, but I don't know what's going to happen. It's going to take good luck to that person is all I have to say. So I totally hear you.
Guest: Ilyas Anis (39:45):
I totally agree with that, man.
Host: Paul Barnhurst (39:46):
So it's funny that every financial modeler is able to build a fully integrated three safety model? I share this in my career, I never built a three statement integrated model until I went out on my own four years ago because I worked in a large company FP&A and all the models you're building is p and l. So it's interesting to see the different perspectives on that one. I think it's an important skill to have and I wish I had learned it earlier, I'd only done it in exercise, but I'd never built one for work. So it's interesting to see different people's backgrounds and how they answer that one. That's why I kind of said what I did is I usually push back a little bit saying yes. I think ideally they should know how to, but you can be building models without it depending on the companies you're supporting is what I've found.
Guest: Ilyas Anis (40:33):
Correct. Makes sense.
Host: Paul Barnhurst (40:35):
Yeah, it's a fun one. That's why I love to see the different debates. What I find is the more you work with small companies, the more the answer is yes. The more you work with some other places, then it tends to vary a little bit. So that's the whole idea here is to get some debate as people listen.
Guest: Ilyas Anis (40:51):
If you can translate a decision like templates, everybody has templates. So the balance sheet is ultimately going to tie. That's not going to be a big issue. But ultimately you should know the basics. What is in the balance sheet, what that's flowing through, what elements of balance sheets are flowing through the cashflow and what's, how it's impacting the PL is impacting the balance sheet or cashflow. Three things are already integrated, but I would again, and the best way to
Host: Paul Barnhurst (41:13):
Being able to build a three statement model is one of the best ways to learn those. A hundred percent agree.
Guest: Ilyas Anis (41:19):
A hundred percent. And this FM course from FMI is amazing. I have seen many people have, this is becoming like A, B, C to them. After completing this course,
Host: Paul Barnhurst (41:29):
I did the A FM. Really, it sharpened my thinking. I highly recommend it to anyone in modeling, especially early in their career. I think students, people getting started, it's a great foundation to have. I mean, I wish I would've had it 20 years ago instead I took it two years ago now, three years I think. But I originally was going to take it before and it got cancelled and it took me like five years before I ended up taking it. So it's been on my radar for a long time. Before we wrap up here, any final advice you'd like to offer people? Their building models?
Guest: Ilyas Anis (42:03):
I would say that every model should answer a question. If you can't say in one sentence what decision this or what this financial model is telling or is answering, then this is not a model. You are just building a decoration. I would say learn with AI now, otherwise it'll be too late. It's the good time. Everybody in the world is learning. A few people are giving the training, but this is a very good time. Even the trainers are learning. So it's a very good time to step up and implement as much as you can and go to the next level. Don't be on using the general team AI or just giving prompts, automate things and implement them in your ecosystem.
Host: Paul Barnhurst (42:45):
Great advice there on going out and learning it. Kind of implement it. It's the time, right? Everybody's figuring it out. As one guy put it, it's like nobody's experts. I keep hearing about these people on LinkedIn. I'm an expert in AI. Ask how many hours LeBron James has spent on the basketball court or whatever, superstar or world-class person and tell you it's not six months of time,
Guest: Ilyas Anis (43:07):
It's not six months. Correct.
Host: Paul Barnhurst (43:09):
But you could still learn a lot from people that maybe only put six months if you're in week one or week two, right? They're as far along as you can be. So I guess that's always what I say is everybody on LinkedIn's an expert or take it with a grain of salt. Alright, if someone listens to this podcast and they want to learn more about you or get in touch, what's the best way for them to do that?
Guest: Ilyas Anis (43:29):
LinkedIn is the easiest. They can reach out to me, search Elia Anis, I-L-Y-A-S in IS at IMS Associates or maybe Turning Point brands. So they will find me and that's where I share most of my work and my post and my DM is always open.
Host: Paul Barnhurst (43:45):
Perfect. So you go to LinkedIn, look up ILI Anise, you'll find them there. Thank you for joining me, ili. I really enjoy it. I'm glad we were able to connect and get to chat, so thanks for being on the show.
Guest: Ilyas Anis (43:55):
Thank you so much for your time.
Host: Paul Barnhurst (43:56):
Financial Modeler's Corner was brought to you by the Financial Modeling Institute. This year, I completed the Advanced Financial Modeler certification, and it made me a better financial modeler. What are you waiting for? Visit FMI at https://fminstitute.com/podcast/ and use Code Podcast to save 15% when you enroll in one of the accreditations today.