How FP&A Teams Turn Confusing Budgets into Strategic Tools That Drive Alignment with Sarah Schlott

In this episode of Financial Modeler’s Corner, host Paul Barnhurst welcomes Sarah Schlott, founder of The Schlott Company. Sarah shares her perspective on why financial models often fail, not because of bad math, but because they don’t reflect how real businesses work. She talks about what it takes to earn trust as a finance partner, how to clean up messy data without losing momentum, and the importance of getting the right people involved in the process. Sarah and Paul also dive into how finance teams can shift from reactive number-crunchers to proactive business partners that bring clarity and confidence to decision-making.

Sarah Schlott is a strategic finance leader with over 18 years of experience guiding companies through growth, M&A, and operational change. She’s worked across corporate finance, forecasting, budgeting, and reporting infrastructure. Sarah is the founder of The Schlott Company, where she helps founders bring order to financial chaos. Her approach blends classic FP&A with modern tools and a deep understanding of real-world business dynamics. She believes finance should bring clarity, not confusion.

Expect to Learn

• Why overly complex models usually create more confusion than insight

• What it means to be “battle-tested” as a finance leader

• How to build models that reflect business reality, not just spreadsheets

• What to do when the data is unreliable or inconsistent

• Why involving department heads early leads to better models and better outcomes

Here are a few quotes from the episode:

• "When you’re constantly fighting about the numbers, you’re not ready to present the model." - Sarah Schlott

• "If the people who own the numbers don’t see themselves in the model, you should probably just chuck it." - Sarah Schlott

• "Stop being the cop. Be the radio tower that keeps everything aligned."  Sarah Schlott

Follow Sarah:
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         Website - http://www.sarahgschlott.com/
         Company - https://theschlottco.com/

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In today’s episode:

[01:53] - Introduction to Sarah Schlott

[03:14] - Worst Model Horror Story

[07:48] - Founding The Schlott Company

[10:19] - Experience Needed to Go Fractional

[14:53] - Building Finance That Brings Calm, Not Confusion

[17:28] - How to Work with Messy Data

[20:58] - Pressure Testing Financial Models

[28:04] - Finance as a Radio Tower, Not a Traffic Cop

[39:39] - Rapid-Fire: Excel Tools and Modeling Styles

[43:37] - Wrapping Up and Final Thoughts

Full Show Transcript

[00:01:11] Host: Paul Barnhurst: Welcome to Financial Modeler's Corner. I am your host, Paul Barnhurst, aka The FP&A guy. And this is a podcast where we talk all about the art and science of financial modeling with distinguished financial modelers from all around the globe. The Financial Modeler’s Corner podcast is brought to you by the Financial Modeling Institute. FMI offers the most respected accreditations in financial modeling, and that is why I completed the Advanced Financial Modeler. And I've signed up to be a Chartered Financial Modeler. This week, I'm thrilled to welcome our guests to the show. Sarah Schlott, welcome to Financial Modeler’s Corner.

[00:01:50] Guest: Sarah Schlott: Thank you. I'm so excited to be here. I appreciate the invite.

[00:01:53] Host: Paul Barnhurst: Yeah, really excited to have you. So let me run through Sarah's Background and then we'll jump into our questions. So Sarah is a strategic finance leader with over 18 years of experience helping companies scale with clarity, confidence and operational intelligence. Her expertise spans corporate finance forecasting for startup growth, M&A integration, VC backed scaling, budgeting and building reporting infrastructure that leadership teams can actually use. She's led finance through high growth sprints, restructures, market pivots and post acquisition chaos. Always with a steady hand in the sharp focus on metrics that matter. Sarah is also the founder of the slot company, not Slutsky, but they do have good food, where she helps founders and operators untangle financial chaos and design finance functions that work. Her approach blends traditional FP&A discipline with modern tools, emotional fluency, and a deep understanding of how real businesses actually run. She's passionate about turning financial modeling from a reactive chore into a strategic advantage, and believes finance should bring calm, not confusion. I love the background. So we're going to start with this first question. I know you have a horror story. The worstF financial model you ever worked on you've seen could even be one you built. I'll let you take that wherever you want. Your modeling horror story.

[00:03:24] Guest: Sarah Schlott: Yeah. I mean, we all have them. And I'll plead the fifth. On who the source creator of this model was. And, well, I'm going to kind of give it away, right? I inherited a large model. Multiple tabs, too many to name. Raising, naming convention. By the way, you never really knew what you were getting into until you clicked on the tab. Deeply layered logic. It looked complex because it was, and it was more complex than it needed to be. It was just there for the sake of being complex. But the moment you touched it or started asking real questions. It just kind of fell apart on you. Like the logic, but also the flow just didn't make sense. To add insult to injury on that, there wasn't any understanding from the team on what the numbers were, how they got there, and what that really meant for the organization. Each team had their own data. None of it was traceable back to the model. And yet we were still reporting on a monthly basis, but no one trusted it. And so therefore no one used it. And in my opinion, that scenario was the worst model to be working from. And the real nightmare was really not only the confusion and tension it created within the organization, but just the time drain, right? Like for me, I would spend hours updating something that no one wanted at that point and no one believed in it. And then I walk into that meeting, and I'm wasting the entire time fighting about the numbers or trying to defend the position instead of like, offering insights that really get the team's thinking and moving. So it just created this crazy culture of doubt. Everyone's pointing fingers. They're not aligned. And what I came to notice is that if people who own the numbers don't seem to see themselves in the model, then you can't really rely on it and you should probably just chuck it.

[00:05:10] Host: Paul Barnhurst: There's a lot of truth to that. And as I always like to say, if you're going into a meeting where everybody's asking, how did you get that number or questioning it, you can pretty much scrap getting anything done in that meeting.

[00:05:22] Guest: Sarah Schlott: Yeah, and you're probably not even ready to present a model yet. Like, just back up and let's fix that data problem first.

[00:05:29] Host: Paul Barnhurst: Yeah. You want to be aligned. I still remember the challenge I had at a company when we just tried to agree on what a booking was. It took a while.

[00:05:37] Guest: Sarah Schlott: Was that a SaaS company? Because that happened.

[00:05:39] Host: Paul Barnhurst: They were trying to become a SaaS company.

[00:05:41] Guest: Sarah Schlott: Yeah. That's common.

[00:05:43] Host: Paul Barnhurst: Oh, I know I worked at a couple, but it's just like, oh, why is this so hard? For sure. So what was your kind of key takeaway from that experience? I mean, one you mentioned, you know, sometimes you just need to back up and get on the same page. But what was the key takeaway for you?

[00:05:59] Guest: Sarah Schlott: You know, I mean, it really was that moment of just backing up. Let's get some work we need to do.And it was really that, you know, over and over again I would see this problem. And I began to find that whenever there was internal tension between sales ops, finance, that it usually wasn't a people or even a number problem per se. It was like a system failure. And it was systematic. Right. The model, the data, something upstream was broken. And so I started treating modeling not as a spreadsheet exercise, but like a clarity exercise. If the model causes friction, the job, you know the job's not done. And you've really built a wall or the departments that are already having a hard time communicating, then you are building something that moves the company forward.

[00:06:47] Host: Paul Barnhurst: And I really like how you put the model is really kind of that clarity exercise because yeah, you do want to get everybody where they're comfortable and on the same page. If everybody's, uh, fighting over numbers and what it all means versus, you know, getting to that point where you can really have conversations that move the business forward, you still have work to do, and that's not uncommon. It's not a bad thing to have some disagreements and have challenges. Rarely do you get the first, you know, version done. And nobody everybody's like, oh, this is perfect. We can totally make our decisions, right? You're laughing because how often does that happen?

[00:07:23] Guest: Sarah Schlott: I mean, even after 20 iterations of the same model, you still don't have it perfect, right? I mean, I would think it would take 20 years in business for the model to be at a point where we all agree with everything, and now we can just copy and paste it into the platform, right?

[00:07:41] Host: Paul Barnhurst: Yeah. If you get there, let me know.

[00:07:43] Guest: Sarah Schlott: I haven't yet. I haven't stayed that long.

[00:07:46] Host: Paul Barnhurst: No, I hear well, yeah. Yeah, that makes a lot of sense. So you started your own company, slot company, nearly five years ago. What's that experience been like for you so far? What led to you starting the company? And maybe just talk a little bit about the journey?

[00:08:00] Guest: Sarah Schlott: Yeah. So I mean, it's similar to the responses above. I just kept seeing that whole problem, you know, over and over again as a smart, greedy founder scaling, you know, trying to scale a real business. I tend to work with smaller companies even from a W-2 perspective. And it was always I was always joining a team that was nonexistent or there was just chaos beneath the surface. Again, like broken models, broken process maps, poor data teams that argue more than they align, right? And all of that tends to get built into the model, because the model is kind of a mirror on your business. Garbage in, garbage out. And so what I really wanted to do after kind of going through, I would say that those battles and being on that side in house, building the models, reading the board prep, fixing broken budgets, I realized I didn't want to own finance anymore. From a W2 perspective, I just really wanted to help founders scale with a little bit more clarity and less drama. So that's how we kind of spun up the Co and said, how can we tackle this one company at a time?

[00:09:15] Host: Paul Barnhurst: So it was really you wanted to help companies kind of with the clarity and making things a little cleaner for them. So they didn't have to go through the typical chaos when they brought in that first W2 person.

[00:09:28] Guest: Sarah Schlott: And yeah, not only creating clarity for the founders so that they could move faster, but creating a better process from the inside out for those people who stay behind. Right. When the founder exits. All of those problems bubble up and it tends to fall on a few people's shoulders. And those people just want to leave because they're burnt out by that point. So if you can get a little bit better at setting those things up from the beginning, then you start. Founders start to build a company that other people want to stay at even after you've exited. And to me, that's a better legacy.

[00:10:05] Host: Paul Barnhurst: Yeah. It makes sense. Definitely a better legacy for sure. I'm curious to get your thoughts on this. I know you worked for quite a while and corporate America, whatever you want to call it, W2 work before starting your own business. What level of experience do you think someone needs to have before they start some kind of modeling or fractional finance service business? Because it feels like we're seeing, you know, that it's growing like crazy these days. And there's a lot of different opinions on what level of experience you need. I'd love to get your thoughts.

[00:10:38] Guest: Sarah Schlott: For myself, I felt like I needed to wait forever, and probably even longer. Than I have or than I did. But what I've come to find out, just kind of going through those motions, is that I don't really think you need decades of experience, although helpful. You just really need to make sure that you are battle tested, in my opinion, right? Like you, you really can't help a founder kind of go to that next stage. If you haven't had to defend a forecast in front of a boardroom, if you haven't had to work through a cash shortfall, or tried to build trust against a team that wants their own data and it's all contradictory. I don't think that you're ready because you come into contact with those problems almost every single time. So once you're battle tested and you can speak to those core issues in a strategic, confident, logical way and set up systems for them, then I think you should look for companies who maybe can give you the opportunity first to battle test your strategy.

[00:11:47] Host: Paul Barnhurst: That makes sense. And I like what you said there is. You'll be battle tested because. Right. That can be different for everybody. What that is. What an experience. If you started the first five years of your career all in startups, and you were trusted to basically be like the CFO from a very early age, you're more battle tested than somebody who worked in a large company where all they ever focused on was one little part of the business.

[00:12:10] Guest: Sarah Schlott: Yes, unless you're going to consult for just what your core strength is, right. Like, you need to understand where you are good. Where do you shine? Where have you offered value? And if that's a big enough, I would say a big enough pool to support the level of income that you desire. Then go for it. But if you find yourself lacking, then spend some time trying to find those problems and fix them.

[00:12:36] Host: Paul Barnhurst: That makes sense. And I get what you're saying because, yeah, there are certain things if you've always done this certain thing and it's highly valuable. Yep. People want it. You can make an income off just doing that generally. And most people you see out there, especially if you're doing kind of fractional services, generally want a little more broad experience. So it makes it hard.

[00:12:55] Guest: Sarah Schlott: Yeah. Especially from a fractional CFO piece. Right. And when we first started working with the Charlotte Company, we tried to hone it more in like that for model and budget. And not only did it always lead to a broader discussion and more of those same recurring problems that needed to be fixed from a systematic layer. It was also like people didn't understand FP, and if they're not in FP and a right, but they understand fractional CFO services and that can wear almost all of the hats of the business these days. So I would say if you're really going to push yourself into that role, you need to understand in breadth and depth, maybe each department a little bit.

[00:13:42] Host: Paul Barnhurst: I appreciate that, and I always like to get different, uh, opinions on that because I get asked by people all the time, I want to start my own business or what do I need to know? And everybody has a little bit of a different answer and a different perspective on it. So I kind of enjoy being able to share that so people realize, yeah, you do need experience. What level? What that all looks like is going to vary a little bit depending on what you're doing and how you think about it. And, you know, like I see some people say, well, I have two years work experience at a big company and I start a fractional CFO and I'm like, give a little bit of a reality check of, are you sure you're ready?

[00:14:19] Guest: Sarah Schlott: Right. And you know, in my, I would say position, my job is actually rarely known, but I am not a yes man, right. It's like, okay, let's break this down to core concepts. And there's certain things you need to work on first, and sometimes to your point. It's a few years and sometimes it's a few decades, and that's okay. Like, you don't have to. You don't have to stop what you're doing. You just have to fill those gaps.

[00:14:46] Host: Paul Barnhurst: Yeah, it's a different journey for everybody. And I like how you said fill the gaps, right? Well, there's a question back from your bio. I want to ask you, uh, you mentioned you believe finance should bring calm, not confusion. Not that I've ever brought confusion myself. No, never. How do we do that? What's your take? I mean, how do we really help bring that calm and clarity?

[00:15:09] Guest: Sarah Schlott: Yeah. So I don't think of any one person. Maybe unless they're a sales guy, I joke, but I don't think there's any one person who walks into an organization and is trying to bring discourse and chaos, right? Like, we all want to be successful. So I think where the confusion is, it's kind of just it's intrinsic to the role. Right? Because you're kind of putting these black and white numbers on the page and you're saying here it is, ready to go fight, right? And that is not the job. Right. So you bring calm by designing finance that makes I don't know that makes the numbers make sense right. So simplifying but not dumbing down the information. And usually that happens by stripping away the noise and even the tension to get alignment. And the way that I do that is teams first. People first. Right. So you've got to have drivers and visuals that do tie to the company objectives. But I start with those company objectives and I say, do these objectives tie to outputs that the team can actually impact. Right. And if they can't then maybe that's where you need to start by removing some of those tension layers, by holding someone to something that they can't impact, right. Because we're not like a reporting feature, we need to really make it make sense across departments. So I just always lead with a few hired people that you trust. Then you need to trust the people that you hired to bring to the surface what those real drivers and leaders are. Then build around that rather than building around the data. That's just kind of looking at you, right? It's that static we want dynamic, right? Then after that, it's kind of like the whole we need to operate as a team, align everyone around what the model is or where the numbers came from, the data flow upstream, downstream. We've all kind of got to understand those around track. So those baton handoffs, the process and the data it all needs to be functioning how both sides need that to just. Does that make sense?

[00:17:28] Host: Paul Barnhurst: It doesn't. It kind of leads me to a question, because I'm sure you've seen it again and again. I mean, I know your horror story ties to it. What do you do on the day? The data, data, whatever you want to call it, is a mess. Right. You're trying to build that model, maybe understand the drivers. You have a good clarity on the business. You feel like you could build something, but, you know, do you have to step back and spend months scrubbing the data? What do you think about it? Because we all I think we all struggle with that. So I'd love to kind of get your thoughts. I know small companies, it's very common to come in and data is a mess. How do you manage getting good data? Will still try to get to the point where you're giving them value and insights because they often conflict. At least that's what I hear.

[00:18:09] Guest: Sarah Schlott: Yeah. And you know, I think there's a way to build it, where you maybe have different iterations of the data and the model. I think that's really the only way to do it. And you have to be upfront and honest with the caveats, right? Like, hey, this is what we're currently tracking. Clear definitions. This may not be what we will track in the future, but here's where we are. Here's the strawman. Let's talk about it. And then what has to happen is that a lot of times in those modeling rooms, or even the budget versus actual or the planning rooms, the right people actually aren't in the room. And I'm not saying open up the room for everyone to come in. We don't need too many chiefs in the kitchen, but if there's data or a systematic issue or a process gap, you've got to go down a few, you know, wrongs and talk to the people that are inputting that data. Right. And it's not their problem or their fault. But if they've been given a certain set of requirements or processes that no longer fit the business, then help them. Right. You gotta understand at the most simplistic denominator, how do we make this better? And then like stuff I step. You're transforming the business and the data. And sometimes it can take months, but you don't just stop reporting. You still have to give them iterations.

[00:19:33] Host: Paul Barnhurst: You mean you can't say, hey, for the next three months, I'm just going to work on data and ignore you.

[00:19:37] Guest: Sarah Schlott: I would love to. I would love to. But what happens in that? I just, I go back to my earlier days where that's probably one thing that my CFO did the correct way is that when he saw my natural curiosity and knack at. This doesn't make sense. Why are we fighting about it? Let me go talk to XYZ. He had totally leveraged that. Right? So he would report, I would go, you know, with my little, you know, magnifier glass. I would figure out where the gap was. We'd fix it. And meanwhile it bubbles up to cleaner data. I think every company needs one of those in human form.

[00:20:17] Host: Paul Barnhurst:  While my background is in FP&A. 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 modeling 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 the AFM program. Podcast listeners. Save 15% on the AFM program. Just use Code Podcast.

[00:20:58] Host: Paul Barnhurst: The next question I want to ask is around models. You talk about cleaning up. Manage that process of how you got to bring calm. You had shared a LinkedIn post where you talked about how every model needs a pressure test. I can definitely relate to that. I agree with that concept, but I'm curious from your end. What's the advice you would offer around pressure testing? How do you make sure you're comfortable and you've done that either before sharing with the client or even with the client in some cases.

[00:21:26] Guest: Sarah Schlott: So I think a lot of my answers may not always be the traditional answer, right? There is, of course, that core competency that you need in your Excel and modeling skill set and your skill set. But I tend to think beyond those terms because I didn't grow up from a traditional finance background, self-taught, and I always led from problems first. Like, if you've ever heard of solution based selling, that's basically how I model. It's like solution based modeling. What's the problem? Where can we find it? Right. So for me stress testing comes not so much. And we all have the standard to check the formulas. Make sure that somewhat you know this logic you know it flows in a logical manner. But for me it's a little bit beyond that. So first I would want the operator to be able to walk through the model and understand about 80%, at least 80% of it, right? Where's the flow, where's it's coming from. Does he agree where the information is coming, where it's flowing to you if he can't understand it and kind of self-serve to some degree, then the model's not ready.

[00:22:43] Guest: Sarah Schlott: Then I would run, like, edge cases and I go in and I just, I try to break it from a formula perspective, but more so I try to break it from a like, does my logic hold if I were to reduce revenue by 40%? Spike cash? Does all of the downstream logic still hold? Like does the model do what you would expect it to do? And if you change those main levers significantly enough, then that should show up like on your dashboard, right? You should be able to see that. And if you don't, then something somewhere is broken. And then finally it's again team based. So each department walks through it. They need to understand their tap essentially, or or the build that speaks to the drivers and the levers that they're responsible for. Do they agree that those are the levers that they can impact, and do they agree with the numbers and the data flow that's creating that build? And if they can't impact it or don't agree with it, then it needs to be fixed.

[00:23:46] Host: Paul Barnhurst: And I mean, how often do you find it takes multiple times to really find that right driver. Right. The one they can impact. Because I think very often we just take whatever may be a good predictor. And you know, you share the finance results. And we all know those are lagging indicators right. The operational metrics are what we're able to influence, not the financial numbers. We'll see it in the finances when we actually do influence the operational metrics. But I'm just kind of curious how often do you mean you have to go back and tweak it?

[00:24:17] Guest: Sarah Schlott: Oh, you mean you should be tweaking your model all the time? I, I believe in rolling forecasts, right? And I even agree with like, let's talk about the assumptions. Do they still make sense even though we have this annual budget that we're beholden to do our assumptions: drivers, levers still make sense. And sometimes, especially in a fast paced company, they don't go three months down the road. Right? So the whole concept of we built this model or it's good. That just doesn't exist. Number one. Number two, you as these strategic partners should kind of lead from a. Here's a caveat, right. Like these are the drivers working with now kind of what I said before. Let's talk about these. Let's not fight about them but let's talk about them. And if you really don't want to be sitting in front of a board or, you know, the CEO, CFO, CMO talking about those things, and you get with the department heads before, and it's just a series of questions. What do you think the drivers are? What are you saying? Because a lot of times these guys have their own metrics. Then never make it into the model. And if you're not asking that before you start building, then you're kind of building plumbing for a house. That one is not going to help the house function, but you're going to have to tear down the walls to rebuild the plumbing. So go to the source. And the source is usually the Department of heads. Right. And then hopefully they're talking to their team to understand what their team believes. The drivers. It's bottoms up. And I don't think that we do that enough.

[00:25:52] Host: Paul Barnhurst: Do you think that one of the issues we often run into is too much of that top down? And just look at the data, build the drivers? Here's the model versus having those real conversations and finding the nuance and the things they're really looking at versus traditionally what we think it is.

[00:26:09] Guest: Sarah Schlott: So two things happen. One is you don't really get a full, clear, clean picture. And two, those who have to then go behind the scenes and pull those levers and drive those changes have signed up to something that they can't like, believe in or support or get behind. And that's just creating chaos downstream.

[00:26:35] Host: Paul Barnhurst: Makes a lot of sense on creating chaos. Worst is yeah, when you have something in there that they really can't support or sign up or nobody wins, I've been there. Not fun. We've all had those conversations like, wait, you mean I can't hit my budget? And it's January, right?

[00:26:51] Guest: Sarah Schlott: And even so, wait, you mean I'm not going to get my bonus because I couldn't fulfill this objective? That I don't even have the drivers and levers for or support for? Right. And so then it just creates, again, tension from the people who support you the most. So people process data like all of it.

[00:27:12] Host: Paul Barnhurst: I've been there on all of that. The conversations around budget, the people. And I agree it always starts with kind of people processes, as I like to say, and I think this applies even to modeling. But people process technology.

[00:27:25] Guest: Sarah Schlott: Yeah I mean.

[00:27:26] Host: Paul Barnhurst: I for data.

[00:27:27] Guest: Sarah Schlott: Yeah. I really do think that you get better models when you're asking better questions and you understand the people that have to then drive your model. Because if you don't, then you I mean, yeah, maybe the math works and the logic works, but if people can't get behind it and support it, then the model is still going to be more inaccurate than maybe it would have if you all rallied behind it. And now we're trying to meet those objectives rather than prove that those objectives were wrong.

[00:27:55] Host: Paul Barnhurst: Just because the math works doesn't mean it's a good model. Yes, definitely. Been there.

[00:28:01] Guest: Sarah Schlott: Yes.

[00:28:02] Host: Paul Barnhurst: All right. So again, I want to go back to a post kind of shifting gears a little bit and a recent LinkedIn post. She shared the finances with a traffic cop. It is the radio tower. Can you elaborate on what you meant by that?

[00:28:16] Guest: Sarah Schlott: This kind of comes back to more or less everything that we've been talking about, and it's kind of my core concept behind how I approach modeling, how I approach PHP and how I approach finance. And I just, you know, in one of the, like, highly successful but also high growth phases. With one of my first companies, I was in a position where I constantly felt like I was the cop. I was constantly having to say no. I was constantly having to hold hands. I was constantly having to be like, okay, here's your ticket, don't do it again. And I just felt like there must be a better way than this, right? Like, rather than employing a bunch of cops to kind of, like, hold the line, you need air traffic controllers, right? Radio controllers say, okay, who's like in the runway? Who's like doing a little taxi around the airport? Who's in the air and how can we support all of those objectives without them crashing and burning or them colliding into each other? Right. So more no's and more. Okay. And this is how you get there.

[00:29:23] Host: Paul Barnhurst: Yeah. It's funny funny to use the radio tower example because, we often talk about in some of our training and recently we changed it to show kind of that radio tower, that control tower, that FP&A is one of only, well, only group, but one of the only three that I see that see the whole business. The CEO, yes, is to see the whole business. The CFO gets to see the whole business. And then FP and A are the only groups. It really has an entire view of the business. Nobody else does. And that puts you in a radio tower type position where you'll be able to see everything and help alert people. As Carl Seidman, which you probably see on LinkedIn, you may know him. He was referred to as one of the number one skills people need. I think this applies to modeling as well. He called it the ability to anticipate. The great anticipation is how he referred to it. That's always stuck with me because right now I'm trying to figure out things. The experienced ones are able to look at this and go, okay, that plane's at this. Something's wrong. I could see it crashing in two minutes. Yeah. This is somebody who's new that's like, oh, yeah, they're a little off course. I'm sure they'll get back on course. No big deal.

[00:30:31] Guest: Sarah Schlott: Right, right, right. And then there's. I mean, you can't forget, like, a lot of people, I think start off by playing cop because they are trying to hold that line. And there is a compliance piece just embedded into finance and even FEMA. Right. Because like, like one of the last lines of defense, so to speak, because you see the entire business. So it's not that we forget about compliance, but it's just another layer in just like the multitude of things that we have to keep an eye on. So it's air traffic control.

[00:31:06] Host: Paul Barnhurst: And we're much better off when we can say no end or this. I don't see that working. Here's the reasons. Let's discuss it. Maybe we can tweak it a little bit and come up with a better solution. It's more around having a solution oriented approach versus no. Now there are ethical things, other situations where we just have to say no. And that's the end of the discussion. But in the vast majority, we can be like, here's the alternatives.

[00:31:37] Guest: Sarah Schlott: Yeah. And that's a really great point because there are finance professionals out there who do kind of lean into window dressing. It's there and you can see it. I'm not that's not what I'm talking about. When I say yes and I'm talking about solution based creativity, ethical motivation and output, a compliance layer and in the end, building something that plugs here actually works, right?

[00:32:06] Host: Paul Barnhurst: Wait, our stuff's supposed to work. That's why I talk instead of building models. Yeah. So. But we're going to get into some standard questions here in a minute. We have a couple. We ask every guest and then rapid fire. But I have to go back to one thing. I kind of laughed when you said, yes. We have to build a lot of iterations, especially in high growth companies. I once supported Traveler's Check and this was in 2015, 2016.

[00:32:31] Guest: Sarah Schlott: That sounds painful.

[00:32:33] Host: Paul Barnhurst: Let me tell you, I didn't have to change a lot in the model. Yeah, it's a hundred year old business. Well they'll grow. Yeah, right. You knew what everything was. Yeah. It was more about how you could control Spence? And how do you allocate the revenue we had than really, you know, the tradition of. Oh, do I get the right drivers? We all know what driving sells. And that didn't drive any sales. Drove no revenue for that business. So that was unique. 100% of the revenue came from the liability because you invested that liability, the $2 billion you had sitting on the balance sheet.

[00:33:06] Guest: Sarah Schlott: See it? Yep, I see it.

[00:33:08] Host: Paul Barnhurst: Bad financial models can lead to bad decisions or worse. So, how do you minimize the risk of a bad model? You make sure the models you build are great. The Financial Modeling Institute developed the Advanced Financial Modeler accreditation program to help modelers like you. The AFM program offers a step-by-step approach to building world-class financial models. The program ensures that you know the best practices in model design and structure, and will help you brush up on your Excel and accounting skills to be the one on your team to build great models. If you want to impress your boss and your clients, get AFM accredited. Podcast listeners. Save 15% on the AFM program. Just use Code Podcast at http://www.fminstitute.com/podcast.

[00:34:13] Host: Paul Barnhurst: So it's very different. Yeah, I kind of that's immediately what came to mind when you said grow up. I've run a business that there's none of that. It's very different.

[00:34:21] Guest: Sarah Schlott: True, true.

[00:34:23] Host: Paul Barnhurst: So yeah, it was just kind of a fun side story. But anyway, I digress a little bit. All right. So we ask every guest this. Do you have a favorite Excel shortcut?

[00:34:31] Guest: Sarah Schlott: Yeah. I mean it's not glamorous, but it's true. And it's a control save that has ruined my life more times than I can count. Especially in the beginning. Right. And it's just taught me. I mean, it has taught me in so many ways. Like move fast, protect the core. You're not safe. Even if it looks like you're safe. So just go ahead and control.

[00:34:56] Host: Paul Barnhurst: Safe. Yes, that's a huge one. Control S can often save us a headache. There's definitely more than one time. I'm like, did I really just do that? I think I did one the other week. It was only a few minutes, but it was still like I could have prevented that.

[00:35:08] Guest: Sarah Schlott: Yeah. And you know, I don't know how many finance professionals now are using Mac like Excel on Mac to model. I do because I had too many times, like on Adele, where my model would crash and it was highly fragile and I would open it back up and it would all be a mess because I didn't control save. And so the last available information that Excel was able to recover just was like four hours ago. Right. And and I've moved so fast, I don't even know everything that I changed.

[00:35:39] Host: Paul Barnhurst: So I have everything linked to OneDrive and it auto saves now, which I love.

[00:35:44] Guest: Sarah Schlott: Yeah I don't know man. Maybe that's my age coming through.

[00:35:47] Host: Paul Barnhurst: A lot of people have trouble with one year.

[00:35:49] Host: Paul Barnhurst: I.

[00:35:50] Guest: Sarah Schlott: I hate it.

[00:35:52] Host: Paul Barnhurst: You're not alone. I've heard more. I've heard some know Microsoft MVP's even talk about how they hate it.

[00:35:57] Guest: Sarah Schlott: Yeah. I mean, let me be a little bit more positive than that. I'm just not used to it. And there are things moving so fast in my life right now, both with modeling and the family. And there's some things that just have to go like old school on and control us not using OneDrive as one of them.

[00:36:15] Host: Paul Barnhurst: Well, you know, I'll hold it against you because you said, Mac, you know, no self-respecting FP and a financial modeler can use Mac as my joke. I put that on LinkedIn once, and I got somebody responding, and I'll let you go. You'll laugh at this. They responded and said, so you're telling me everybody at Apple can't be any good at FP&A? And I'm like, come on, humor. Like, let's step back a minute.

[00:36:36] Guest: Sarah Schlott: No, I, I know I get that, I get that sentiment because I was that way. Like I had brand loyalty because that's how I learned I learned on you know, Dell for everything. But my husband is creative. I'm creative at heart, you know, in my free time. So making the switch, while painful, I wouldn't go back because there is. I do trust it. I trust the system a little better, but it does present complications with power BI and all of that.

[00:37:07] Host: Paul Barnhurst: I'll give you that. I couldn't do it, but I'm glad you can.

[00:37:11] Guest: Sarah Schlott: I had to.

[00:37:11] Host: Paul Barnhurst: Learn the knack, but I just can't.

[00:37:13] Guest: Sarah Schlott: Keyboard is different and what's funny is I still use it like, not the Mac mouse. I will never be able to learn the Mac mouse.

[00:37:21] Host: Paul Barnhurst: So yeah, and I know a lot of people are like, just get a mac and run it in parallel. I just can't do it. I may, May 1st day. We'll see.

[00:37:30] Guest: Sarah Schlott: Yeah I mean I have Excel, it's on my desktop and I have a suite on my desktop. I don't use parallel. I have other workarounds for things that generally require parallelism.

[00:37:40] Host: Paul Barnhurst: All right. So the next question. Speaking of modeling, what's the most unique or kind of most fun thing you've created in a model for your personal life? Have you ever built something in a spreadsheet?

[00:37:52] Guest: Sarah Schlott: I mean everything. And when I say everything, I mean everything. Like from, like, grocery budgets to vacation plans. Uh, list of books by genre and topic and the reason why I want to read it. And this is, like 300 books long, and I'll never get to half of them, but I still have it in Excel. Right. And I mean, even, like, what are the safe foods for me, my childhood special needs and her like, therapies and doctor's appointments? But none of that's funny and none of that's fun. I think what's funniest about Excel use at home is that it's somehow rubbed off on my kids. Like my daughter the other day. She is turning 18 and she has a vintage clothing business. She came to me the other day to help her in Excel, forecast her income and expenses because she knows she's going to have to pay taxes. But more importantly, she wants to know when she can move out and afford it. And I'm like, what are you talking about? Move out. Right. And then my son uses Excel to track the Japanese vocabulary words. So it's just I think it's just.

[00:39:06] Host: Paul Barnhurst: A normal thing.

[00:39:08] Guest: Sarah Schlott: It is. Yes. Now, my husband.

[00:39:10] Host: Paul Barnhurst: Had a family of nerds, but I figured that wouldn't be nice.

[00:39:14] Guest: Sarah Schlott: We are, but we're also.

[00:39:16] Host: Paul Barnhurst: I am.

[00:39:17] Guest: Sarah Schlott: Very creative. My husband went to Scad. My daughter's trying to go to Scad, so, I mean, there's a level of coolness to us.

[00:39:24] Host: Paul Barnhurst: It's just there are a lot of really creative people with Excel. Right. We get the nerd label sometimes, but you can be both.

[00:39:32] Guest: Sarah Schlott: As a nerd. But I still think I'm cool.

[00:39:34] Host: Paul Barnhurst: I love it. I gave up on cool a long time ago. I must be older than you. Yeah. All right, so we're going to move to rapid fire. We'll run through this relatively quickly. Here's how it works. You get to answer yes or no to each question at the end. You can elaborate on 1 or 2 and you get to use it. You asked if you could have this. You can plead the fifth on one of them. Say basically your one mulligan, as we'll call it. All right, you're ready.

[00:39:59] Guest: Sarah Schlott: All right, let's go.

[00:40:00] Host: Paul Barnhurst: Circular references. Yes or no? No VBA yes or no?

[00:40:05] Guest: Sarah Schlott: No.

[00:40:06] Host: Paul Barnhurst: Do you prefer a horizontal slot of sheets or a vertical model where you kind of build everything in one sheet?

[00:40:12] Guest: Sarah Schlott: I'm. Bottoms up. Horizontal.

[00:40:14] Host: Paul Barnhurst: All righty. Excel. Dynamic arrays in models. Yes or no. Yes, okay. Yes. So that leads to the next question. Do you think we should build fully dynamic models? No, that didn't take long. External workbook links. Yes or no.

[00:40:30] Guest: Sarah Schlott: Hard no.

[00:40:32] Host: Paul Barnhurst: Yes I've had a few that have said hell no. So you're along those lines named ranges. Yes or no?

[00:40:38] Guest: Sarah Schlott: No.

[00:40:39] Host: Paul Barnhurst: Do you follow formal standards like smart or Fast or one of these when you model.

[00:40:45] Guest: Sarah Schlott: Know my companies require too much flexibility for that.

[00:40:49] Host: Paul Barnhurst: Alrighty. Do you think financial modelers should learn Python in Excel?

[00:40:54] Guest: Sarah Schlott: Yes.

[00:40:55] Host: Paul Barnhurst: What about Power Query?

[00:40:58] Guest: Sarah Schlott: Yes.

[00:40:59] Host: Paul Barnhurst: Okay. Power BI?

[00:41:00] Guest: Sarah Schlott: Yes. All of those are eventually okay.

[00:41:04] Host: Paul Barnhurst: And then will Excel ever die?

[00:41:08] Guest: Sarah Schlott: No. All right. I have a lot of time.

[00:41:13] Host: Paul Barnhurst: Yeah, I've had that before. I had one person say yes, but please don't let it be in my lifetime. So will I build the models for us in the future?

[00:41:23] Guest: Sarah Schlott: Yeah.

[00:41:24] Host: Paul Barnhurst: I think it's getting pretty close. It's amazing to watch. I mean, it depends on the complexity and the human in the loop.

[00:41:29] Guest: Sarah Schlott: And. Yes, but you said. I couldn't say it depends. So I know thanks for saying what I was like saying that to you. I was sending that to you though. So thanks for saying.

[00:41:39] Host: Paul Barnhurst: Yes, I could tell. So do you believe financial models are the number one corporate decision making tool?

[00:41:46] Guest: Sarah Schlott: No. What a hard tool. Yes. But really it's its alignment. Okay.

[00:41:53] Host: Paul Barnhurst: I, I can see.

[00:41:55] Guest: Sarah Schlott: That tool. But there are soft tools, right. Like you can't just look at it and make your snap decision and move on. Like there's a lot of nuance. There's a lot of change management. What can people do today? What can you control today? So.

[00:42:09] Host: Paul Barnhurst: Okay, that totally works. And then what is your lookup function of choice. Do you like to choose Vlookup index match x lookup something else.

[00:42:18] Guest: Sarah Schlott: Yeah, this is my Mulligan one because I actually have a post about this and I got tore up on it. I got tore up on it. So that is going to be my. It depends. I like index matches. Okay. New schoolers. X lookup is great. I use it a lot, but if you're making me choose, cuz.

[00:42:40] Guest: Sarah Schlott: I said I wouldn't say, but I'm choosing an index match.

[00:42:44] Host: Paul Barnhurst: I'm amazed how people act like it's a religion on LinkedIn with this conversation. And I always respond with, you know, learn the differences between them and use what works for you. As long as you know how they work, you can accomplish the same thing with multiple different formulas 99% of the time.

[00:43:02] Guest: Sarah Schlott: Yes. I mean, honestly, like if and if you don't believe me or Paul on this, take your favorite Excel formula that you use all the time. Drop it into ChatGPT, tell it what you're trying to do and ask, is this the most efficient and effective way to run this? And it will give you different options.

[00:43:20] Host: Paul Barnhurst: And there's a pretty good chance it will say no. Here's six other ways that are more efficient. Right? Right.

[00:43:26] Guest: Sarah Schlott: Exactly.

[00:43:27] Host: Paul Barnhurst: So all right, well we're just about out of time, but is there any of those you want to elaborate? Anything you want to share on one of your answers?

[00:43:33] Guest: Sarah Schlott: Well, I mean, I think that last one I kind of elaborated on. So.

[00:43:37] Host: Paul Barnhurst: All right. Perfect. We did. I think we covered that one well. So as we wrap up here, if people want to learn more about you, someone from our audience or listening to this, I'd love to get in touch or learn a little bit more about you and what you're doing. What's the best way for them to do that?

[00:43:51] Guest: Sarah Schlott: I got three ways. So pick your poison. You can find me on LinkedIn. I love to post content there. That's where I engage with people the most, right? So just look up Sarah shallots if you want to get more of my like deeper conversations than I do, have a blog.it's mostly, finance and FP&A driven. That is Sarah G slot.com. And then if you're a SaaS founder looking to grow quickly and don't really have a calm finance function, then you can reach out to us at the.com.

[00:44:30] Host: Paul Barnhurst: Right. Perfect. Well we'll put those in the show notes. And thank you so much for joining me. It is fun chatting today Sarah, and I really appreciate you carving out some time for me.

[00:44:39] Guest: Sarah Schlott: Yes, thank you for the time. It was fun. It was a blessing as well, so I appreciate the time.

[00:44:45] Host: Paul Barnhurst: Well, great. It's always good to hear people say they have fun, because that's usually not the word to think about after a 45 minute conversation on financial modeling.

[00:44:53] Guest: Sarah Schlott: No, I think you make it fun. I think you definitely make it fun.

[00:44:55] Host: Paul Barnhurst: Well, good. I'm glad you enjoyed it.Thank you.

[00:44:58] Host: Paul Barnhurst: 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 www.FMInstitute.com/podcast and use Code Podcast to save 15% when you enroll in one of the accreditations today.