Why Traditional FP&A Fails and How to Lead with Revenue-Driven Planning with Darrell Cox

 In this episode of FP&A Tomorrow, host Paul Barnhurst explores the transformation of finance into a strategic driver of business performance with seasoned CFO Darrell Cox. They unpack the modern challenges of FP&A, emphasizing how teams can move beyond traditional reporting to become proactive, data-savvy partners across the organization. Darrell shares real-world insights on forecasting, revenue intelligence, sales collaboration, and building a tech-enabled finance function that delivers tangible value.

Darrell Cox is the Chief Financial Officer at Una Software, bringing over 25 years of executive leadership across high-growth companies. His background includes CFO roles at Vena Solutions and FreshBooks, as well as leadership positions at Virgin Mobile, Rogers Communications, and ATI Technologies. Known for scaling finance teams and overseeing more than $1 billion in exits and transactions, Darrell focuses on blending financial insight with operational data to elevate finance's role as a strategic partner.

Expect to Learn:

• Why FP&A must evolve into strategic finance to remain relevant

• How to continuously improve forecasting through agile, data-rich practices

• The critical role of CRM and daily data in revenue intelligence

• How finance and sales can work together as partners, not opponents

• Career advice for FP&A professionals aiming to become CFOs

Here are a few quotes from the episode:

• “If you're not networking continuously, you're not future-proofing your career.” - Darrell Cox

• “Come bearing gifts, not with a rubber stamp and a hatchet. That's how you partner with sales.” - Darrell Cox

• “It’s no good having a beautiful bathroom if there’s no water going to it. You need the plumbing.” - Darrell Cox

Darrell Cox brings sharp insights and practical wisdom to this episode of FP&A Tomorrow, shedding light on how finance can step up as a true business partner. Whether you're building forecasts, aligning with sales, or plotting a path to CFO, Darrell's experience and advice offer a roadmap to smarter, more strategic finance.

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LinkedIn - https://www.linkedin.com/in/darrell-cox-547a461/?originalSubdomain=ca
Website - https://unasoftware.com/

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Website - https://www.thefpandaguy.com/
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Earn Your CPE Credit
For CPE credit, please go to earmarkcpe.com, listen to the episode, download the app, answer a few questions, and earn your CPE certification. To earn education credits for the FP&A  Certificate, take the quiz on earmark and contact Paul Barnhurst for further details.

In Today’s Episode
[04:08] - What Great FP&A Looks Like
[06:54] - Enabling the Finance Team
[09:12] - Finance Career Insights
[12:04] - Overview of Una's Mission and Vision
[18:48] - Building a Revenue Forecast
[24:00] - Ideal Revenue Data Inputs
[27:18] - Counterintuitive Data Insights
[32:58] -  Partnering with Sales
[42:53] - Career Growth in FP&A

Full Show Transcript

[00:01:38] Host: Paul Barnhurst: Hello everyone. Welcome to FP&A tomorrow, where we delve into the world of financial planning and analysis, examining its current state and future prospects. I'm your host, Paul Barnhurst, aka the FP&A Guy, and I'll be guiding you through the evolving landscape of FP&A. Each week we're joined by thought leaders, industry experts, and practitioners who share their insights and experiences, helping us navigate today's complexities and tomorrow's uncertainties. Whether you're a seasoned professional or just starting your journey in FP&A, this show has something for everyone. This week, I'm thrilled to be joined by Darrell Cox. Darrell, welcome to the show.

[00:02:20] Guest: Darrell Cox: Thanks for having me. Looking forward to this.

[00:02:22] Host: Paul Barnhurst: Yeah I'm excited. I know we've got the opportunity to chat a few times and now we have to put it on record. Whether that's good or not, we'll find out. Let me give a little bit of background about Darrell. Darrell has over 25 years of leadership experience. He has built and led high-performing teams across high-growth companies. He is currently the CFO at Una Software and previously served as CFO at LMN and Vena Solutions. His leadership journey also includes senior roles at FreshBooks, Virgin Mobile, Wind Mobile, Rogers Communications and ATI technologies, which was later acquired by AMD. Throughout his career, Darrell has led over $1 billion in exits and funding transactions, developed and scaled financial and leadership teams, and implemented systems and processes that enabled sustainable growth. He is known for extending the role of finance beyond the numbers, helping organizations drive strategic growth and improve operational efficiency. Darrell is passionate about evolving into strategic finance by forging strong partnerships across the business and connecting financial insights to operational and revenue data. All right. How is that for background? We cover it.

[00:03:43] Guest: Darrell Cox: Yeah, I think that was adequate.

[00:03:46] Host: Paul Barnhurst: I always find it weird when someone reads them for me, I don't know. And I assume others kind of feel the same way. It's like, did I do all those. Yeah. Like I remember that one. But what about this?

[00:03:55] Guest: Darrell Cox: Yeah. It's like. I mean, it makes me want to blush. Anyway. Go go go. Thanks for working through that.

[00:04:01] Host: Paul Barnhurst: No, it was great. I love your background. And I'm excited because I think you have a, you know, a really great background for the show. I want to start with this question. It's one we ask every guest, what does great FP&A look like? How would you describe it?

[00:04:14] Guest: Darrell Cox: So that's a I've been like an FP&A person for virtually my entire career. And like you read there on my bio, I think great FP & A is about really strategic finance. I mean, it's become separated like some companies actually have separate groups for strategic finance and FP&A. But I think really great FP&A is actually strategic finance. Why I say that is, I think if you are an FP&A or if you're running an FP&A team or something like that, you should be striving to drive performance. And you really can from that seat, you have everything you need, or theoretically, you should have everything you need to be able to actually do that. Now the soft skills, the data and the systems to enable you to do that.

[00:04:59] Host: Paul Barnhurst: I have to ask for a follow up. What's your take? Do you think there is a need for strategic finance if FP&A is being done right? Because you kind of mentioned FBA is strategic finance. I'm just kind of curious. Your take on that is we have seen a little bit of a trend of, you know, more and more kinds of strategic finance, maybe being separated sometimes from a.

[00:05:18] Guest: Darrell Cox: Even if a company doesn't think they need strategic finance, I think they could benefit from strategic finance. If you don't have an FP&A team that's behaving or, you know, targeting being strategic, then who's doing that for you? It could be somebody else. Maybe, you know, strategic finance has evolved because FBA wasn't doing it. I don't know every situation. But, you know, you often find in some organizations this tussle between ops and finance, you know, finance centralized or is there finance outside of finance? I think the fact is you do need what strategic finance delivers, which is thinking about how you can drive better business results by analyzing the numbers, making better business decisions, and driving action from that. If it's in the FP&A team, I think, you know, there's a lot of benefit that's not in the FP&A team who's doing it, I think is the question you should ask yourself.

[00:06:09] Host: Paul Barnhurst: I think that's a great question. I like how you said there's always that struggle of, you know, what sits in finance, what sits in operations. When I worked at American Express, we called a lot of roles shadow finance because I didn't sit in finance, but they were basically doing finance. And I'm guessing I know you've worked for some long, some large telecommunications companies. I'm sure you saw some of that where you're like, hey, why.

[00:06:29] Guest: Darrell Cox: Are you 100%.

[00:06:30] Host: Paul Barnhurst: Business?

[00:06:31] Guest: Darrell Cox: Yeah, there's a lot of times there's a business partner within the business unit. You know, there's pros and cons. I think one of the biggest con, though, is they tend to go a little bit native. And they also don't have the ability to really, truly leverage, you know, cross pollinate. Creating a lot of the same data is used for a lot of different purposes. And if it's distributed more wisely. Sometimes you don't get the benefit.

[00:06:54] Host: Paul Barnhurst: I'm curious, from your perspective, having men in the leadership chair, having been a CFO. What is the most important thing finance leadership needs to do? If they want to have a great function, they want the BPA to really, you know, accomplish what it needs to.

[00:07:11] Guest: Darrell Cox: You know, when I ask, sometimes people ask like, what's the most important or the hardest thing? And I like to gravitate to the I like to talk about the people skills because something often missing from a finance team. And I think, you know, that's kind of like the street appeal of an FP&A team, but part of which really enables that team to drive performance. But that's always assuming they have the right enablement. What's so tragic to see sometimes is like a finance team is really struggling to do that. That's got the right attitude. They know how to empathize with their business partners, but they're not enabled. They don't get the right investment either. They don't have the right people like resources. But more often it's they haven't got the right systems. You know, they don't get access to the data, um, for whatever reason that might be. And but really, most of the time it just boils down to investments, you know, like, you know, maybe the potential isn't well understood at more senior management or it hasn't been articulated or they haven't seen an example of it being successful. So, you know, making the right investment in the right technology to get the most out of your data. The plumbing, I mean, it's not great. It's no good having a beautiful bathroom if there's no water coming to it. It's just not going to work.

[00:08:24] Host: Paul Barnhurst: You got a few problems. If there's no water.

[00:08:27] Guest: Darrell Cox: You gotta have the plumbing. The plumbing has got to be there. And then the worst thing is, this is the thing I've seen before, too. It's like, if you can't deliver the financing, if you're not delivering value, if you're not seen to be strategic, if you're just delivering reports, um, people who don't come to you to ask the right questions should not invite you to the right meetings. You don't get a seat at the table and it's just a downward spiral and you can't get the investment and you just get stuck.

[00:08:47] Host: Paul Barnhurst: Yeah, and I know you're talking about you kind of getting stuck becoming nothing but a report function.

[00:08:52] Guest: Darrell Cox: Yeah. It's demoralizing. And then you don't get the best staff. So it just keeps on getting worse.

[00:08:57] Host: Paul Barnhurst: Yeah, exactly. Nobody that enjoys business partnering and really wants to be viewed as strategic is going to stay long term in a role where they're basically a report monkey, so to speak.

[00:09:07] Guest: Darrell Cox: Yeah, that's no fun. Not getting challenged.

[00:09:09] Host: Paul Barnhurst: I agree, I think there are some great, great points there. So in your career you've worked for three companies in the accounting and finance space. I think the last three before that were telecommunication, FreshBooks, Vena and Uni Software. What is it you like about space? What's kept you kind of coming back?

[00:09:26] Guest: Darrell Cox: I've never felt better. You know how people talk about these last two roles in particular, like FreshBooks? Kind of scratched it a bit, but, you know, Veena and Ahuja in particular, it's like, I get to actually contribute to the product directly and directly the products for me. So I get to like, really,help my peeps. It's like literally Udo in particular is. It's designed to solve the problem I've always tried to solve, like in many places, more broadly, every place I've ever been, I've tried to connect operational data, to finance data, to solve some kind of problem and drive performance. And this company is designed to do exactly that in a niche where there's not a lot of companies doing it. I mean, really big companies can afford really big systems that do this, this, this, this is not a new concept, but it's so expensive. But in this smaller market, it hasn't been widely available, you know. So companies struggle to solve it with Excel, you know, Power Query, Power Pivot and all that kind of thing. But they're not really designed specifically to do this. And because they're not, you don't get all the other benefits that come, come with it. So it's like yeah, I'm trying to solve my own problem. Like how energizing is that? Like when I get up, I'm super excited every day. It's amazing.

[00:10:45] Host: Paul Barnhurst: I know it's always fun when you get to kind of solve your own problems. And yeah, I mean PHP and software planning. Forecasting, you know, is the CFO. Our Izumi is an FP&A professional. We've all struggled where they're kind of like, I need better data, I need better insights. I need my partners to share the full information with me, whatever it might be. We've all struggled. Or you're like, hey, this is the best number I could come up with. I can come up with, given the time frame and the limitations I have, but do I have high confidence in it? Not really.

[00:11:16] Guest: Darrell Cox: No. Can I do it again really fast? Can everyone? You know, it's like. Yeah, I mean the bonus. Like you can't do some of this in Excel, but the bonus of doing it in a system, um, is that you? You can touch more people, you can get more data in it. You can do it more often. So do it over and over and over again. Iterate, iterate. Be really agile and you're going to have less mistakes. So more credibility, more reliability. It's just like yeah. Like it's like, honestly, it's a great place to be. So I came back.

[00:11:46] Host: Paul Barnhurst: Yeah. So tell us a little bit about una. You mentioned you're trying to solve your problems with them. I know you're a startup that has a revenue intelligence and planning platform, but maybe just talk. Tell us a little bit about una, where you're at, what it's been like so far. You know really what you're trying to solve. Give us a little bit of that overview.

[00:12:04] Guest: Darrell Cox: Oh, cool. Yeah. So, first of all, it's actually a tool for FP&A specifically. It does it. So it brings revenue intelligence into the finance toolbox. So, you know, we're mostly finance people, you know, have a planning solution or do planning in Excel there. At some point they're trying to get leading indicators right, because you can really do a lot more with leading indicators, Than just the lighting indicators. Of course, everybody knows that. But, where do you get the leading indicators? One of the most powerful ones is in revenue. And, you know, because it's the biggest number, it's the number that the most people in your organization are probably driven by. And, you know, finance often doesn't have access to that. So we're trying to bring that through this revenue intelligence to the finance team and what it gets you with leading with better. Like the best leading indicators, it gets you more integrated with your business partners, your leadership team. The language of the business aligns you better with, you know, with their objectives.

[00:13:11] Guest: Darrell Cox: It gets you, makes you more empathetic with the rest of the company and, you know, makes you a more effective business partner. And what it also does is it gets you a better forecast because, you know, especially if you have a longer sales cycle, there's a lot more certainty around your immediate numbers. And, you know, if you've got more certainty, there's more confidence in the plan. You have a smaller buffer. If you've got a smaller buffer, that means you're not wasting money sitting there waiting to cover for some problem. You can invest it somewhere. You're going to do better allocations. The list just goes on. On. I mean, ultimately you're going to have a better cash flow forecast, if it goes, is in one system and it goes from, you know, your lead to an opportunity to sell, to revenue, to EBITDA, to cash. So that's what it's designed to do. It's it's designed to really empower the finance team to drive action and to be, you know, a lever for strategic finance.

[00:14:03] Host: Paul Barnhurst: You know, why do you think that's been such a challenge in general with software and, you know, finance having good insight to the revenue data. Having that revenue intelligence they want. We see a lot of tools trying to solve it for, you know, the sales organization. But why do you think it's kind of been a struggle on the finance side.

[00:14:24] Guest: Darrell Cox: Primarily then the, the, the nature of the data is different from finance data. I mean, there's a lot of it. It's also not, it's a little bit there's a lot of uncertainty. It's just the inherent nature of the data. Right. If you're talking about a lead and there could be 5 or 10 leads for one actual opportunity. And you don't know what the product is when you start. But then there might be some products. But then when you close the deal, you know it's you never really know in your CRM system or a lot of this data lives what the actual amount was. It's just messy. You know, you don't need to be 100% certain or there's no concept of materiality and, and sales and marketing data like there is for finance. And then the finance person gets all bent out of shape because it's not reconciled to the dollar. Nothing ties. Time frames are different, just like they would report and work weekly or even daily. And you were working on a monthly cadence. It's like month ends don't correspond, you can't reconcile. You get into the meeting and it's like, oh yeah, you know, that data is wrong.

[00:15:24] Guest: Darrell Cox: And then you spent your whole life reconciling. Even if you can get it to connect. But just try connecting the invoice, which is a source of truth from the beginning of actual revenue with the sale. It's so hard to do. It shouldn't be. I mean, why is it, you know, sometimes a company will have all of that in one system. So it kind of happens more automatically, but more often. There are different systems. They're not connected. They're in silos. They never, they never touch. And so it's getting the two things to connect when they were never built intending to connect. It can be really difficult. And you just get stuck in this, like quagmire reconciling and manual effort. And a lot of times just leads to plain old, you know, implementation failure. So it's just the cost. The cost to do it turns out to be really high and the business can't see the benefit. You know, what's the ROI? I don't see it. So they stop investing, or they never even start because they're afraid of failure. So it's tough to do.

[00:16:17] Host: Paul Barnhurst: Makes a lot of sense. I mean, anyone who's done implementations where the more data you're asking for, the more complex it becomes, right? You start planning and you're like, oh, I want to add all the revenue stuff. I want to add this. I want to add that. If you try adding too much, it fails or you have to do it by chunk and it starts getting really expensive. There's definitely some challenges. The further and further you try to bring in all these different systems and integrate. We've all seen it.

[00:16:42] Guest: Darrell Cox: So the good news is that you don't need to use Excel, right? Like Excel is great for the first few iterations, but you can't get repeatability. And there's always too many problems. So some people go off and build their own systems. And that has to be really expensive. But that's what you had to do a little while ago to actually make a go of it. Unless you were like an enterprise, like a really big company, multi-billion dollar company, then you go buy SAP or something like that. You pay like half $1 million for implementation. But now with modern technology, with AI really bringing down the cost of development and implementation of these kinds of things, it's much more affordable. But there's not a lot of solutions that do it like that. But there are solutions now, and that's what's exciting about today being in finance and aiming for, you know, a performance driver kind of goal is you can now do this. You know, the risk of implementation failures.

[00:17:31] Host: Paul Barnhurst: Yeah. We're definitely I was talking to someone just yesterday of a tool that's really focused on trying to make as much of the modeling process, building the data model, all that I know, kind of almost self-service.

[00:17:44] Guest: Darrell Cox: It's also now being able to build a proper database to really leverage. I like some of the older solutions. Also, there might be an OLAp database, they might have a relational database, but you really need the benefit of both. So now it's even cheaper to do that kind of thing too, right? And so if you've got the right database to put your eye on, it's like then then you're really supercharging things.

[00:18:03] Host: Paul Barnhurst: Yeah. And you're starting to see kind of more and more of that, that combo trying to both really benefit relational and object because they both have different strengths and areas where you need both in an ideal world, but it's challenging technically it's getting easier. It can get costly. You know, something I'd love to get from you is, you know, we talked about a kind of AI and how it can help with the model. But I would love to know is that, you know, kind of CFO. You've obviously gone through this budget process many times in different roles. You know, when you're building a revenue forecast, which is really where the forecast starts. I think any good forecast starts with revenue, with few exceptions. If you're working in pharmaceuticals, we won't talk about that research type thing. But, you know, walk through the process. What do you think about revenue? How do you kind of go about, you know, building that revenue forecast?

[00:18:55] Guest: Darrell Cox: First, I know you're I know this is what you're you're thinking too. It's a nonstop process. It doesn't start or finish. It's just a circle. It just keeps on a roll and rolling along. And the way the way I think about that, to make it the most effective that it can possibly be is its a continuous process. And the more often I do it, the better the easier. The more data I bring into it, the better insights I'm going to get, the better, more value as a finance person. I'm going to be able to bring to the process to just ask all the help, the questions that we need to. I'm also going to have a better idea of the levers that we can pull or suggest or to really, you know, or resource somebody need to allocate and what the team's thinking about the better degraded I am you know it's it's and bring in as many people as possible so everyone feels aligned with the process. And during that process it's it's asking as many questions as I possibly can. It's really getting integrated, right. Like so often, you know, and other companies that show up. And there's a certain established go to market kind of process like a weekly sales call or something like that in finances, even at the table. Getting yourself integrated and participating.

[00:20:03] Guest: Darrell Cox: They won't have access to the data. Get the data somehow. You know, you got to ingratiate yourself, though. Sometimes it's not something where you show up and say, hey, I'm at the meeting or give me the data. It's like you kind of work your way, work your way into it. But, you know, it's always asking the questions, you know, and it's and when you're doing that, you know, who am I talking to? What's your objective? What am I trying to do? What are they trying to accomplish? And, you know, while this is happening, you know, there's the machine, hopefully by some point in this process. So what I like to have is, is, you know, an actual database. Like I described earlier, I built them in Excel. I've hired scrum teams and outsourced Ukraine and everything to build these things. Once you got that going. The machine will tell you something. But you always have to do the top down as well. Right. And so the top down is sanity to check at the end. But it's also a target setting at the beginning. So it's running all of these things in parallel all the time and making sure they sync up and, you know, it's trying to get everybody aligned is really the main, main output around target. And then if you're not hitting it where you're where you think you can be adjusting the target to match so that the sales team always feels motivated and excited in that you as a finance person, are always setting the target appropriately, either helping the sales team set achievable what slightly challenging targets, or putting a mind in board's head so so they feel comfortable and things happening when things are happening.

[00:21:36] Guest: Darrell Cox: And also so you can thread that through your cash flow or, or other expectations or in your resource allocations and somehow to make sure that you're headed in the right direction as an organization on the whole. But it's like it's the bottom up, getting all the detail to shoot out what, what it leads to, given that where things are today, where the trends are pointing to using that top down to help calibrate. Maybe you need to adjust your top down, but maybe you have levers. Usually you do. What can you do to help the team make the target? And short of that, adjust the target, to make sure that it's all coming together. And it's just if you're doing it frequently enough, there's no one surprised and everything is working in unison. And you're making all those minute adjustments, you know, and, that's, I don't know. Is that too high level? Did you.

[00:22:32] Host: Paul Barnhurst: Well that's helpful. I'm going to. I'm going to drill in.

[00:22:34] Host: Paul Barnhurst: A little bit. I mean, first I felt like one needs to be a psychologist. You have to manage a lot of relationships there, too. You know, there's the system side, which you mentioned, right? You got to get the data. You got to get the data right. You have to be able to roll that up. But really after that, the process is a lot of getting people aligned. Figuring out how it compares to targets, being able to get everybody comfortable and excited about a number so you have a higher chance of reaching it. Because we've all been in that situation. I've seen it where self sees the target and it's like, I can't hit that, like there's no chance and they're demoralized because like, well, I'm never going to hit quota every month and I could earn more elsewhere. Why would I deal with this? So I say there's a huge incentive and kind of psychological component. And having written some commission plans in one of the companies I worked with and have got them wrong and pissed off all the salespeople. I've learned everything.

[00:23:27] Guest: Darrell Cox: Plan is going to be wrong. It's just that's the only thing for sure about every plan. They all are.

[00:23:32] Host: Paul Barnhurst: Going to be wrong, but you really missed some of the incentives and you pissed them all off. Definitely not a good thing. But you know, I learned a lot.

[00:23:39] Guest: Darrell Cox: Yes.

[00:23:39] Host: Paul Barnhurst: Won't deny that.

[00:23:41] Guest: Darrell Cox: The finesse is in how wrong and how fast it's going to be, and how quickly you can correct and make those fine adjustments. Yeah, that's our challenge.

[00:23:51] Host: Paul Barnhurst: That's a huge part of it is how quickly you can get everybody back aligned, figure out what went wrong and how you align it. So. Kind of two part question. When you talk about getting all the data, what's the data you typically, you know, like to have at what level of data. Maybe just talk a little bit when you're thinking about revenue data, what's the ideal world. What are the things you're wanting?

[00:24:13] Guest: Darrell Cox: So that can mean lots of different things. You know it could be a supply chain. It could be inventory, it could be all these things. But where I love to live is the CRM data. So, you know, if you especially if you're running like a, like a two stage or three stage sale process with orders and essays and stuff like that, or whatever you call them, the organization that is such a goldmine. And I found so much return in that data so many times. It's just my go to place. It's also, I mean, we were talking about earlier, one of the hardest places, right. So you get out of your Salesforce or your HubSpot or your equivalent, whatever that might be. Data on, you know, your sales leads is as far up the funnel as you possibly can, where it's still practical, because if you go way up there, it's just not practical. But, you know, and then you if you're able to course and chart history of, you know, how much leads are converted to opportunities on specific cohort basis and, you know, measure the amount of time on average it takes, you know, when they when they start, you know, talking about paper and negotiating a deal, how much time it gets through that, the different stages there once you've got some history there. It's just invaluable because, you know, you can tell like six months in advance, like how much you're going to sell. And that's usually where a forecast starts the sale. Wouldn't it be? It's so much better if you can get a leading indicator on that. And we spoke a little bit about all the benefits that I can get you. And so the problem is when you get in there it's a ton of data.

[00:25:47] Guest: Darrell Cox: And I want all of it. Because you never know when you're going to, you know, swizzle it a certain way or get a certain insight from a different place. Or if things are changing, you really need granularity. It's like, you know, that whole thing, like measuring the, you know, the whole area under a triangle. Right. You got to like the smaller little triangles, the better the calculation is. Right. You don't want these giant chunky triangles. A little, little tiny ones. And one of the best practical examples on how that can be useful, even from a straight science point of view, is, to reconcile to the data, you have to have daily data. You know, usually when you're trying to set one of these things up and the techies are going to be like, yeah, you want this, weekly or monthly or something like that? No. I need to be able to reconcile between the weekly ops meetings and my monthly financials, and the month ends and the weekends almost never correspond. So it's like and then, you know, if you're going to change something, if you're going to, you know, change sales territories or you're going to add products or something like this, you know, if the more data that you have, the more historic data you can preserve, you can regroup things. If you make key changes like big changes and you don't have the detail in your historic data, you can't map it. So you just lose all your historic relevancy, right? So there's so many reasons to have lots of data. So yeah, the more data the better. And you bring it in and you put it to your cohort models and it can give you such counterintuitive insights.

[00:27:18] Host: Paul Barnhurst: So what's the maybe the most counterintuitive insight you've had as you've gone through the data? Like do you have an example where it's just shocking you were like, oh wow, we need to really kind of rethink some things, because that's very different from what I would have expected.

[00:27:30] Guest: Darrell Cox: The ones that I come across more often are people thinking, you know, because it's a cheap lead. These are cheap to acquire. That's going to be a lower cost of acquisition overall. But that's not always the case. When you start looking at the conversion rates, a cheap lead might not convert. As you know, if you're looking at expensive leads, you might convert at 100%. You're cheap, lead might convert at 10%, and depending on the cost of those things, it might be actually better off investing in expensive leads than the cheap leads. Totally counterintuitive. In one example, and this was a this so this was played part of it. It was part of a bigger lifetime value to the cost of acquisition analysis. But a major part of it was, the mid-market customers are actually more profitable on the long term than an enterprise client, which was completely counterintuitive because people think with these huge whale deals, you're going to make all this more money. But in fact, when you look at the closed cycle on a case like how long it took to close a deal like that, and how long it took it to ramp it up to its full revenue potential. And the actual couple that with the actual differences in cost at every step and the churn, which everyone says, oh yeah, the market companies are going to churn faster. But when you added it all up, the mid-market company was actually more profitable in the long term and more cash cost, cash efficient. So the business did an entire strategic move to, to focus on mid-market first, as opposed to enterprise first, which is where they were.

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[00:30:24] Host: Paul Barnhurst: You're right. A lot of times we automatically think, okay, enterprise is more profitable. And on the flip side, they often have more negotiating leverage. They take more effort. And sometimes you think I can't lose the deal. So you get a lot more aggressive on pricing, which you'd never do at the mid-market. And before you know it, you're lucky if you're making money off that deal because you've kind of put yourself in a tough spot.

[00:30:46] Guest: Darrell Cox: You, you, but you have to get into the details to actually see that, to actually prove your hypothesis. Most people just assume there's a ton of different reasons.

[00:30:55] Host: Paul Barnhurst: No, I agree with you. And that's where the gold mine is. When you can dig in that data and support it, saying, look, what do you think's happening? Right. Here's what the data is actually showing. And it's eye opening when you can have those conversations and bring the data and get everybody comfortable with the data. That's the best one. You got everybody on the same page. You're like, oh yeah, I believe the data.

[00:31:15] Guest: Darrell Cox: Now the whole Cuba thing. Okay, so we just talked about, you know, having the right data and the right systems to get to the insight. And that's where this that's where the finesse comes in. Because if you just come into the meeting room with a baseball patency, look, I was right and you're wrong, that's not going to work. You got to have that EC kind of like asking the questions. There's so many good reasons to ask the questions. One, you might be wrong. Did you miss something? You don't want to look like an idiot. Number two yet before. Help, help the team get to their own conclusion. A lot of this stuff they know, right? It's just no one's put it in this form. Put it all together like this and pitch it. So how do you do that? The last mile is so important.

[00:31:59] Host: Paul Barnhurst: No, I, I learned a lot from that. I worked at a company where we didn't have any customer panels. Our data was just terrible. And it took me six months just to try to even figure out what all our different products, you know, product margin was just a gross after cost of goods sold and contribution. And then we started to dig into specific customers. I remember we found some real surprises, like we had one month. And given what this customer wants to say, we'll just call it about a 10% discount. And for some reason, nobody ever asked. It continued to be billed that way for years. And I said something to the salesperson. They're like, what's this? And I'm like, I'd ask for Billy Taylor. That's the discount they get every month. And she followed up and it was supposed to be a one month discount. It'd been $1 million because we've been giving it for three years.

[00:32:42] Host: Paul Barnhurst: You're like, oh my goodness.

[00:32:45] Host: Paul Barnhurst: You know.

[00:32:46] Guest: Darrell Cox: You can't see that in the meeting.

[00:32:48] Host: Paul Barnhurst: So that was a fun one that we, you know.

[00:32:51] Host: Paul Barnhurst: We were fixed. We were like, hey, we found an extra, you know, 30,000 a.

[00:32:54] Host: Paul Barnhurst: Month or whatever.

[00:32:55] Host: Paul Barnhurst: It was.

[00:32:57] Host: Paul Barnhurst: I want to shift gears in a second, but I want to ask one less question on the sales area. You know, any advice you'd offer to people about how to partner, how to develop that relationship with sales? Because I think a lot of people struggle in that area. You know, sales doesn't always love finance. Finance and sales often kind of have different personalities. And I've seen a lot of people struggle.

[00:33:18] Host: Paul Barnhurst: In.

[00:33:18] Host: Paul Barnhurst: Building that relationship and learning how to hold them accountable. So any advice you give to somebody who's listening, who's like, I have a really hard time with this.

[00:33:27] Guest: Darrell Cox: I've seen this so often, right? And I've even had private conversations with CEOs and they're like, yeah, that's just a natural relationship. You know, it's just sales. They're never sales finance. You never want to kill them. But thankfully I've learned a lot since that, that meeting and I have a different perspective on it. First of all, what sales does is actually really hard. Yeah. Month ends, tough to close and quarter. It's tough to close, especially if you got some public reporting or anything like that to do. But imagine if you had a bag to carry, you had to book sales or you're not going to get paid. Okay. That's hard. It's stressful, and you really have to appreciate that. And then when you look at it from your chair and if a and if these are your business partners, they're, they're not just some random stranger. You really you're not you're they're your main objective is not to hold them accountable. Your main objective is to make them successful. Like, how do you align yourself to them to really help them remove roadblocks? Make them successful? If they're successful, you're successful. Holding them accountable is just raising a problem and putting another roadblock speed bump in their path. What you want to do is remove speed bumps, you know, and our job is directly related to that. It's like what we do can help set better quotas, get better resource allocations, help direct them to customers that are more profitable to close or quicker to close, help them get to where they need to be. In doing so, you're all going to be better. So it's kind of I find the most successful way to build a relationship with anybody is to come, you know, bearing gifts, not to go with a rubber stamp and a hatchet. Right. It's like.

[00:35:15] Host: Paul Barnhurst: You're wrong.

[00:35:16] Guest: Darrell Cox: Why did you spend that 30 bucks? That wasn't in the policy. You know what I mean? It's like. Yeah, it's like. It's important to be their partner and to enable them to simply just hold them accountable. That's part of it. But you're the one who helps set the target that they're going to be held to. Let's let's work together and make sure it's the right one and then approach the problem like it's both our problems.

[00:35:38] Host: Paul Barnhurst: A lot there. I won't go over all of it, but I love you kind of started with the whole empathy thing. Recognizing their job is hard and that allows you to build a relationship. So I love that you started there. I love that you said, hey, it's not about holding them accountable, it's helping them achieve their goals and that it's a wee thing. It's not them. Yeah, well, I always hate when you're like, you guys missed your numbers. Oh, we missed our numbers.

[00:36:02] Host: Paul Barnhurst: Yeah.

[00:36:03] Guest: Darrell Cox: Just let me come back with your target was wrong. Your budget is wrong.

[00:36:07] Host: Paul Barnhurst: Yeah. And it's just. That never ends well, right? You just blow. Everybody leaves a meeting like it's your problem and you don't accomplish anything. So great advice. I appreciate that I won't talk about it later this year. You're going to be speaking at Faith. So anyone who doesn't know that's the Finance and Technology Expo. And the title of your talk is FP and a From Excel to AI what the Journey looks like. So you can give us a little sneak peek on what the journey does look like. I'd love to just hear a little bit of your thoughts on that.

[00:36:41] Guest: Darrell Cox: Well, I don't want to give it all away.

[00:36:43] Host: Paul Barnhurst: I thought I said just.

[00:36:44] Guest: Darrell Cox: To.

[00:36:45] Host: Paul Barnhurst: Give it all away. I'll be there. Well, maybe I'll go listen.

[00:36:47] Guest: Darrell Cox: Oh, sweet. Okay, cool. See you in New York. Um, it's about the FAA maturity curve and how the tech stack propels it forward. I mean, you know, we kind of spoke about this very early on in the conversation. It's like, even if we really, really, really want it, you can't wish it to happen. You have to have the tech behind it to make it happen. And you know, tech is causing, you know, reams and reams and reams of incredibly valuable data to be available. There's just so much of it you can get buried in it, and the finance team will tend to get buried in it. The most effective way to harness this data and to like, you know, I said earlier, I want all of it is to harness the technology tools that are available. The most modern ones, you know, and Excel will always be there. And, you know, but in the more mature organizations who are striving the hardest, and trying to be the most strategic in, in the finance support they're delivering, they will realize the benefit through the newest technological tools. So be it. I the most modern databases you know it'll automate throughout. It just it just plays a bigger and a bigger and a bigger role as the, as the team wants to mature and drive more value and really propel performance in that organization.

[00:38:10] Host: Paul Barnhurst: Alrighty. So if you want to hear the rest of it. Come to New York with Darrell and I. November, I believe. 13th and 14th, I believe.

[00:38:18] Guest: Darrell Cox: Yes. I think you do have it right. Should be fine.

[00:38:22] Host: Paul Barnhurst: Well, yeah. Come. Come find us. We'd love to meet you. This will be released before then. So we're good.

[00:38:29] Guest: Darrell Cox: Yeah. And I should say we could make your whole trip worthwhile. We got these really cool EBITDA hats. So who doesn't want an EBITDA?

[00:38:35] Host: Paul Barnhurst: Another EBITDA hat Sweden. I have one, I have a vendor sending me one right now and I'll come get a third one.

[00:38:43] Guest: Darrell Cox: There you.

[00:38:43] Host: Paul Barnhurst: Go. I collect vendor hats, shirts and I think mugs at this point are water bottles. Okay.

[00:38:51] Guest: Darrell Cox: Wait a.

[00:38:52] Host: Paul Barnhurst: Minute.

[00:38:52] Guest: Darrell Cox: But I might have to. We might have to find a better hat for you than.

[00:38:56] Host: Paul Barnhurst: Hey, I'll take what I can get. Yeah. Beggars can't be choosers, as I like to say. So I want to shift gears a little bit again before we get into our rapid fire section. Two questions more around career. So the first is when you're looking to hire professionals, what do you look for in a job candidate? I get asked all the time by, you know, by people who are trying to make that transition or trying to find a role. And we'd love to get your thoughts of what are the things you're looking for when you hire somebody in FP&A?

[00:39:27] Guest: Darrell Cox: I've hired a lot of people now in my career. It's like I've distilled it to like, I don't know, let's call it 3 or 4 things. First, technical skills. That's table stakes. But the type of table stakes on technical skills is changing. It's evolving. Or it used to be that my first hire would just be someone who's an expert in Excel. You know, it depends on the role, of course. It's increasingly, you know, an in-depth kind of technical skill on how to manage data at large scale. So, you know, it could be MySQL now,  or if we have a specific system, we're working with somebody who, if they don't have experience with that specific system, understands the nuts and bolts of data and how to really extract value and match up data. So it could be Power Query or something like that, but you know, it could be MySQL too. So something like that. It's also logic thought processing. So even if you have the best technical skill, I don't, you know, if somebody thinks like me. I find we get things done a lot faster and it's a lot more fun to work with this person. So I always have a case study as part of the FP&A interview process comes near the end. It usually involves a presentation, a preparation of a presentation that is as much about how you're thinking about things and not what you present specifically. Sure. It's super great if you're smarter than me, which I always love. It's also a culture. Culture fit is a really big one. So it's its technical culture, you know, that I find as a dealbreaker. And the other, the last one I would say is opportunity fit. What are their goals? What are the objectives? Do they understand that whole concept? Are they going to be good business partners? So not enough to just have the culture, but also, you know, be thinking about the same kind of goals and looking for the same kind of outcome in the longer term.

[00:41:25] Host: Paul Barnhurst: Yeah. So it sounds like kind of, you know, there's three pieces. You want to see somebody technically that can really get their hands dirty with data and especially more. Obviously it depends on the role. More senior. You may be looking a little different, but you know, if they're going to be working a lot with data, you want them to have those skills of being able to handle large data sets. There's obviously the cultural fit, as you mentioned, and then you want to see how they think logically, how they can kind of manage things and can they really kind of how they think about problems. Is that a fair kind of assessment?

[00:41:57] Guest: Darrell Cox: Yeah, I'm a little bundle that. So if I say you go through it's like technical. It's you know, which also couldn't include, you know depending on the role like if they're super junior more nitty gritty with the data, but if they're more senior, it's about presentation. Sure. So technical culture and opportunity goals.

[00:42:16] Host: Paul Barnhurst: That's right. Yeah.

[00:42:17] Guest: Darrell Cox: Talk about goals and alignment.

[00:42:18] Host: Paul Barnhurst: Because if you're not aligned, even if they take the role. Are you very long?

[00:42:23] Guest: Darrell Cox: Exactly. Correct. Yes.

[00:42:24] Host: Paul Barnhurst: And nobody wants to churn their employees every six months.

[00:42:27] Guest: Darrell Cox: No, no.

[00:42:29] Host: Paul Barnhurst: All right, so last question before we move into the A section here where we have some questions, we ask every guest if an F prenup professional wants to become a CFO one day. So that's kind of their goal. They know going into the FP&A as you know, they've been working for say five years. They're kind of trying to figure out, you know, how to chart the path. The CFO. What advice would you offer them? Any advice you'd offer to a professional?

[00:42:57] Guest: Darrell Cox: It's probably the first one to be performance oriented, make an impact. You know, it's like making an impact, but it's also the right impact. It's like, it's not like the PR thing where, you know, any publicity is good publicity. You actually have to be thinking about your business partner and really striving to help them be successful. You will make a mark in being the best business partner you can be. That's super important. Another part is to stick with it. I've seen a lot of fat people. Some of them are just so smart and I like to hire those people, but sometimes it's always about that objective thing. Strapping them into their chairs. They're too impatient. You got to have patience for some of this. It's not just going to happen. And it's that the people skill around that, you know. So that's, that's part of the people skill., so really develop your people skills. Make an impact. Be patient. And always have your end objective in mind, just like you can of course correct. And you can course correct on other things. But if you're always headed for this some North star, you'll it'll it'll work out great.

[00:44:02] Host: Paul Barnhurst: Thank you. I appreciate that. All right. So the f p and a section these are some questions we pretty much ask every guest, at least a few of them. So we get repeated. Repeat answers. Sometimes very different answers sometimes, but love to see how everybody thinks about these. So if I asked you what's the number one technical skill for the professionals to master, what would you say?

[00:44:24] Guest: Darrell Cox: You're going to, you're going to be expecting this. I think it's going to be how to master your data, how to integrate your non-financial data. More specifically, you know, it could be Excel at first. Depends where you're at. It could be MySQL. We talked about that. It could be, you know, Power Query or it could be to go out and get another system that you don't even know what the right system is today. It's like but it's not about the system. It's not about technology. It's got that technology so you can master your data. So it's appropriate for your data where you are today, and it'll solve the problem you have.

[00:44:59] Host: Paul Barnhurst: Yeah. Understanding how to work with data to be able to master your data. One of the things that was most beneficial for me is my first role. I was called a finance analyst, it is really a business analyst type role. I did report writing for a couple of years and there's a lot of database work around that. You know, we implemented a BI tool. Microstrategy at the time, you know, wrote a ton of reports, worked in access, a lot of SQL. And so I really understood data structure and databases. I didn't want to be a technical person. I never wanted someone to write code, but it was just invaluable to understand the data. Throughout my career, I was able to do a lot of things with power queries. It's like, wow, you're able to get that data, you know, in companies that were total messes and provide reports that we're adding a lot of value. So I'm with you being able to provide insights out of that data because you really understand it and you can dig in and do it is a huge value.

[00:45:51] Guest: Darrell Cox: So if I could tune that answer a little bit. So I just answered from one point of view there. But if you're like a director or CFO, even in, you know, the right kind of company, you need to be thinking about your staff that way as well as your technology. So it's like, do you have a controller and an AP clerk and something that maybe. Do you have an FP&A person who's great at Excel? Maybe. But do you have the person to implement that technology, or are you going to be relying on an outsource person to do it, or are you going to get people to buy in to buy that? Charting your path to do that is also really important, and making sure that you have the organizational support that you're required to get that done.

[00:46:33] Host: Paul Barnhurst: No. Great point there. So number two, what is the number one software human skill we need to master?

[00:46:39] Guest: Darrell Cox: That's a big question. Like there's so there's so many many of them right. But yeah I'm going to go with the listening listening skills. and  patience. So it's, it's like listening. So first find out who's in the room. What do they want? What are their objectives? Not about what yours are and what information is that you have at hand. So you're going into business partner reviews and their sales person. Are you going to talk to them about expenses or are you going to talk to them about revenue. It makes a big difference in that meeting. And so listening, understanding, and then when you're delivering, it's not like this is what I think you should do. It's about asking the right questions. Right. So it's how to communicate, which starts with how you listen and and really empathizing. Putting yourself in their shoes really understands. And that will really help you get ahead.

[00:47:35] Host: Paul Barnhurst: Yeah. Listening and empathy is one we get a lot. It's amazing how often that comes up. It's just huge. All right. This is kind of a fun one. I'm curious to see what you'll say on this one. If Excel removed one feature tomorrow, which one would cause you the most panic?

[00:47:52] Guest: Darrell Cox: Oh, that's a beautiful question. I mean, if it couldn't add or subtract, that'd be my biggest worry because it's basically grade three math all day. But you know, this is a recent one, actually. And it caused me a great deal of consternation. I was using Excel in the clouds the other day and, you know, control or shift backspace. Use that to go back and trace all the work. She always grieved.

[00:48:16] Guest: Darrell Cox: That caused me.

[00:48:17] Guest: Darrell Cox: So my god, yeah. There's so many things you take for.

[00:48:20] Host: Paul Barnhurst: Oh, if we had to go to Online Excel and lost a bunch of our shortcuts, that would be yours.

[00:48:25] Guest: Darrell Cox: Disaster. Yeah.

[00:48:28] Host: Paul Barnhurst: Yeah, Excel Online's got a lot better, but it still has some progress. Or being stuck using an Apple would be another problem there.

[00:48:37] Guest: Darrell Cox: Oh my God. Yeah. No.

[00:48:38] Host: Paul Barnhurst: Love it. All right. I'm curious to see how you'll answer this one. If I asked you to describe the job of finance, it doesn't just happen, but finance as a whole, you have to do it in one sentence or less. How would you define it?

[00:48:51] Guest: Darrell Cox: The job of finance is to drive performance like everybody else in the organization. It's just from our point of view, using our skills.

[00:49:00] Host: Paul Barnhurst: So drive performance I like it. That's a good one. All right. Now we're going to move on to this last section where we get to know you a little bit before we wrap up here. So tell us about a hobby or passion you have. What do you do in your spare time when you're not working?

[00:49:14] Guest: Darrell Cox: So I read a ton of fiction and nonfiction. You know, I read, I would say like 2 to 1 fiction and nonfiction because the nonfiction takes me a lot longer to get through. I like to make a lot of marginalia, but my favorite of the nonfiction books is kind of a bridge to fiction. It's a little bit of a story. It's a biography. I love a good biography. I don't know if you've read Shoo Dog The Phil Knight story at all. That's what a beautiful story, right? Like that. That was pretty good. And then, you know, but it's not just about business. I picked upon the street one day when I was walking home. There's this little box of books. It's set free on it. And then there was this big, thick book. It had, like Hitler down the spine. So I brought that home and found out it was the second of two book sets. Then I had to find the first book which was out of print. or it wasn't available or something like that. Anyway, both by this guy Ian Kershaw, I think. Holy crap, that was a crazy book. Anyway, something like that can just keep me so absorbed. It's just so much fun. So I do a lot of that. And if there was a second place, which explains me more, maybe from a finance point of view I'm really into art and design. So whatever it is, a house, architecture, old car or something like that. And I think that's probably why I can really appreciate a little bit of a model, you know, if it's just all lined up and logical and color coded properly makes my heart.

[00:50:41] Host: Paul Barnhurst: That explains it. All right. If you could have any job in the world for one week, what job would you pick and why?

[00:50:49] Guest: Darrell Cox: You know, I've answered this before and you know, Churchill jumps to mind, but I you know, for this though, I'm going to say Andy Grove. Off Andy Grove when he was at his peak. And until I want that job that is his job. Right. Because not only was he a numbers guy, he had this incredible business in sight and ability to sell like it was like a dream. The dream job was to be the CEO of Intel when. And Grove was a Nazi.

[00:51:19] Host: Paul Barnhurst: Yeah, that would be pretty amazing. He definitely knew how to sell. I've read some stuff there.

[00:51:24] Guest: Darrell Cox: Oh, yeah. Crazy story.

[00:51:26] Host: Paul Barnhurst: And you have to have a theme song to walk on stage to give you a presentation. What song are you picking?

[00:51:33] Guest: Darrell Cox: I'm picking the Mission Impossible theme, and, you know, because I like to do hard stuff and really push the envelope and, you know, that's what makes it worthwhile. And, you know, there's usually a happy ending in that movie.

[00:51:49] Host: Paul Barnhurst: You know, I haven't watched any of Mission Impossible, so I don't know, they're always a happy ending.

[00:51:54] Guest: Darrell Cox: Well, yeah, that's Hollywood, you know, It's got Tom cruise.

[00:51:56] Host: Paul Barnhurst: Yeah. You know, I figured it's like James.

[00:51:58] Guest: Darrell Cox: Pretty formulaic.

[00:51:59] Host: Paul Barnhurst: A happy ending. So last question and then we'll. So if you asked for one last piece of advice for people to be a better business partner for people, what would be your parting advice?

[00:52:12] Guest: Darrell Cox: To be the best business partner that you could be. Put yourself in their shoes every time you go in to talk to them. It's like, and that should form your entire interaction with them. It's like bring the data they're interested in. Bring the story that they want to hear and really try to make them successful. That's your role as a business partner. It's not about what data you might have. It's about what data they want. It's there that your use case, it's not yours.

[00:52:40] Host: Paul Barnhurst: If someone wants to maybe get in touch with you, learn more about you or what you're doing at Uni Software, what's the best way for them to do that?

[00:52:47] Guest: Darrell Cox: Best way to find me on LinkedIn. And I'm Darryl Cox, CFO at software. So yeah, Easiest way to find me. I'm pretty responsive.

[00:52:56] Host: Paul Barnhurst: Well, we'll throw that in the show notes. And thank you for joining me. It was a lot of fun. Darrell, I enjoyed chatting with you today, and I'm really excited for our audience to get to hear this.

[00:53:05] Guest: Darrell Cox: Oh, super thrilled to have been here. It's a pleasure speaking with you. Always love your show, man.

[00:53:09] Host: Paul Barnhurst: Thanks for listening to FP&A tomorrow. If you enjoyed the show, please leave us a five star rating and a review on your podcast platform of choice. This allows us to continue to bring you great guests from around the globe. As a reminder, you can earn CPE credit by going to earmarkcpe.com, downloading the app, taking a short quiz, and getting your CPE certificate to earn continuing education credits for the FPAC certification. Take the quiz on earmark and contact me the show host for further details.

Download the free resource now to explore top tips and pitfalls for a successful budget process - Click the Button below to download!

Expect to Learn:

• Why automation should be baked into FP&A from day one

• What accountability-based forecasting looks like in practice

• How to shift FP&A from a cost center to an operational partner

• Practical methods for protecting your most valuable asset: time

• Why “humble curiosity” is essential to understanding the business

Here are a few quotes from the episode:

• "Fully burdened compensation isn’t just salary plus bonus, there’s a lot more under the hood." - Glenn Snyder

• "Budgeting is a chance to learn the business, not just fill in a template." - Glenn Snyder

• "Finance exists to help the business make better, faster decisions." - Paul Barnhurst

Glenn Snyder emphasized that budgeting is most effective when it's collaborative, strategic, and grounded in real business understanding. He reminded us that finance’s role is to support decision-making, not just manage numbers. With clear communication and thoughtful planning, budgeting can become a tool for alignment and impact.

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In Today’s Episode

[04:37] - Why Stay in FP&A?

[07:40] - Glenn Outside of Work

[13:59] - A Tough Business Transformation

[21:31] - Comp, Vacancies & Budget Math

[25:32] - Top 5 Budgeting Tips

[37:48] - Top 5 Budgeting Pitfalls

[50:22] - Planning Over Perfection

[59:54] - Closing Thoughts & Budgeting Humor

Full Show Transcript

[00:01:29] Host : Paul Barnhurst: Hello everyone! Welcome to another episode of FP&A tomorrow, where we delve into the world of financial planning and analysis, examining its current state and future prospects. I'm your host, Paul Barnhurst, aka the FP&A Guy, and normally I'm the one guiding you through the evolving landscape of FP&A. But this week is going forward, periodically, I have a treat for you. Glenn Snyder is going to be joining me and help guide us through these conversations, and sometimes it will be me and him, and sometimes we'll have a guest. He's going to help co-host once a month for me. So Glenn, welcome to the show.

[00:02:07] Co-Host:  Glenn Snyder: Thank you, Paul. I am super excited about this.

[00:02:09] Host : Paul Barnhurst: You've been on a couple of my podcasts. I know we've done a few interviews that we chatted a number of times, and we've always just kind of hit it off and one thing led to another, and before you know it, we're co-hosting together. What was kind of your take of how this all came about? Anything you want to add to the story?

[00:02:25] Co-Host:  Glenn Snyder: You know, for me, I think that we just had a blast when we've had our conversations because it's not just about the best practices in FP&A and some of our experiences, but the way we've interacted with each other. And there are times that we don't always agree, and that's okay. But it was the discussion that I think really adds a lot of value. And so for me, I was really excited when you offered me to co-host with you just because the conversations that we have are so great and I've personally gotten a lot of fantastic feedback from the postings that we've had on LinkedIn, putting the podcast out there. People really seem to love the way we interact, so I think it's going to be great.

[00:03:05] Host : Paul Barnhurst: Yeah, I know, I'm really excited too. I think like the last time we did a podcast together, I remember going, I wish we would have recorded the first 20 minutes when we were just chatting. There was some great stuff in there. You may not want to release all of it. You know, sometimes the conversations off air are so good because they're off air, so to speak. But there is definitely some great learning in that. So I'm really excited. Why don't we do this? Can you just take a few minutes and tell the audience a little about your career and background? I know you've been on the show before, but I think it'd be great for this first one where you're co-hosting to just introduce yourself.

[00:03:40] Co-Host:  Glenn Snyder: Sure. So I'm not sure if I should say how long my career has been, because I might. But I started my career as a commercial loan officer and at a bank, and I realized that that wasn't really the right role for me, and I stumbled into a role. And lo and behold, you know, 20 plus years later, I am still working in FP&A. So I have over 20 years experience in FP&A. I also worked eight years in corporate strategy. Some of that was also a dual role. And I've worked across seven different industries: public companies, private equity, private equity owned and family owned companies. I'm currently working at a consulting company called Riverrun Consulting. We do financial advisory work, everything that is under the CFO organization. We could help out with that. So I specialize in an area that is called interim management. But I also have a background in FP&A and I've done a lot of system implementations. That's kind of where I've been focusing on the River.

[00:04:37] Host : Paul Barnhurst: Yeah, I know system implementations are a big one. Everybody wants to figure out their data. So what's keeping you in for all these years? I'm just kind of curious. I was going to say, what's kept UNFPA all these years? I know it's something you've loved.

[00:04:49] Co-Host:  Glenn Snyder: What's the first of all? It's usually the right hand of the CFO. So you're always kind of wondering what's the hottest latest thing that's going on in the company? What's the big important thing that you need to solve for? So that's always exciting. But as I mentioned I work eight years in corporate strategy and FPGA. If you do it right, you kind of have one foot in corporate strategy, one one foot in finance. The finance side is the grounding, the discipline you've got to tie out. You got to make sure it makes sense for the business. The strategy side is what are those possibilities? Where can you go with this? The creative side, the thinking about, you know, how Nike could really have an impact on the business or on the customers or whatever it is that you're trying to solve for? And so that blend of those two is really what has kept me going and keeps me excited about it.

[00:05:37] Host : Paul Barnhurst: Definitely. There's the strategy side and there's the blocking and tackling finance side of things with the logic and the math and all that. But I like how you explain that there. So I'm curious. I know you've been on a show before. Maybe talk a little bit about your experience with being planned full, and, you know, I know you didn't host, but you were a guest. Was your conversation kind of like co-hosting for several months? Maybe share a little bit about that experience?

[00:06:06] Co-Host:  Glenn Snyder: Yeah. So I've been a four time customer of a full plan, which I think is a great system. And there are a lot of fantastic systems out there, and I'm not going to necessarily make a recommendation here. That's not what we're trying to do. But I've worked for different times on plan, full system, and I was having a conversation back in 2020, 2021, something like that, with these chief marketing officers of plan, and they were doing a podcast called FP&A Friday. Or then they kind of convert into being planned full. And myself, the CMO and another guest, Christopher Ortega, we just hit it off. And what was great was Chris came from an angle of his most of his career was he started off in accounting, but he was a real small startup software company. I had a lot of large companies, you know, public company background, but also the private equity side. And so Chris and I, we played off each other quite a bit, but we were tackling a lot of the big issues about, you know, they're really going on in FP&A. Should you be doing an annual budget, how often should you be forecasting, you know, how do you go over and really interact with business partners and build out that thought partnership, those types of things? And most of the time, about 90% of the time, Chris and I were 100% aligned. And we used examples from different types of companies. But every once in a while we were like, yeah, you know, there's sometimes something different. When you're at a startup company, then you're at a large public company and that's, you know, it really played out well. And we did probably, I don't know, I would say about 10 or 12 episodes or so. And it was a lot of fun.

[00:07:40] Host : Paul Barnhurst: Why don't you take a minute and just tell our audience a little bit about yourself outside of work? I know anyone who's watching this video could probably guess one of your passions. I know you and I have talked about it, but just a little bit of, you know, kind of what you like to do and just a little bit of who Glenn is outside of work.

[00:07:57] Co-Host:  Glenn Snyder: Yeah. So you can tell from my background, I do have a passion for baseball. I was, for 25 years, a partial season ticket holder with the Oakland A's. I like to refer to ourselves. Kind of like the Marines. We are the few in the crowd. There weren't a lot of us, but, you know, it was a lot of fun. Had some great years, with going to A's games. And now's a kind of a sore subject you could see there in Sacramento. But I do love baseball. It's my autograph baseball collection from the Hall of Famers behind me. It's kind of my enjoyable hobby. But outside of baseball, you know, I also I'm a big, passionate person around education. I do a lot of volunteer work. I've mentored students at UCLA, where I did my undergrad since 2007. I'm also on the board of a nonprofit preschool for underprivileged children called the Redwood Sea Child Development Program, and I've been on the board since 2015. But I also, you know, I'm active in the community. I like to volunteer with our local food bank, just, you know, give away food to people who need it. So to me, there are things that I enjoy. But one of the big things is to give back to the community. I think I've had a pretty special life. I would say I have no complaints. It hasn't necessarily been easy. I grew up in a pretty poor family, but I recognize that I've gotten to where I've been because of the support of a community that I've had, so I always try and get back when I can.

[00:09:26] Host : Paul Barnhurst: I love that. One of my favorite quotes, and I've shared this on the show before, is service is the rent we pay for the world we live in.

[00:09:35] Co-Host:  Glenn Snyder: Yeah, I like that. I like that.

[00:09:37] Host : Paul Barnhurst: And I just love that logic.

[00:09:40] Co-Host:  Glenn Snyder: Yeah. You know, it's one of those things that I really believe that if you have a certain skill set that can help others, why would you not want to go over and help get other people to build, you know, in the same direction? You know, whether like I you know, I as I mentioned, I mentor these students at UCLA, most of them want to go into finance in some way. I coached them on how to build a resume and talk to them about what's out there. You know what, all the different things everybody in college always says, I want to go into consulting or investment banking. I never heard of FMA until I was three years out of college, and I wish somebody would have told me about it. Right. You know, so that's the type of stuff that I think is, you know, if you have a passion about a subject or something, there are other people out there who want to learn and share and help elevate everybody. My take.

[00:10:28] Host : Paul Barnhurst: Yeah, 100% agree. And I think you're totally right that most people in college haven't heard of what FMA is a little bit more. I think in the four years I've been doing this now for my business college students, I've probably counted on one hand, definitely two hands. The number of times a college student has reached out to me and asked about FP and a, you know, it's maybe every six months, two times a year. It's just extremely rare because most people don't know what FP an A is in college.

[00:10:57] Co-Host:  Glenn Snyder: Yeah, actually. So I've had a slightly different experience. But that was because after I got my MBA while still working full time, I was teaching at San Francisco State University for five years, not doing corporate finance and international trade and finance. But I talked a little bit about my background. And then last year, I actually got to teach two programs at UCLA in their Masters of Quantitative Economics program on FP&A. And so that was really cool. That was, you know, really exciting. I got to show people who I had no idea about the entire function of that in the corporate world, what it was all about. And there were a lot of students who were like, oh my God, this sounds really interesting, and I've had a lot of them reach out to me because of that.

[00:11:42] Host : Paul Barnhurst: Yeah, I remember you and I talked about you teaching a class, so I'm not surprised you get more reach out from college students than I do on that front. Would you like to? Why don't we get into our topic? Do you want to introduce it? I'll let you take it away here for a minute.

[00:11:56] Co-Host:  Glenn Snyder: Yeah, absolutely. So here we are. We are, you know, right in the middle of the third quarter. This is the time that everybody starts thinking about budgets, right? You got if you're on a calendar year, you're starting to do your budget planning. You start to figure out when you are going to do forecasting your revenue. How are you going to put your expense targets together? So Paul and I, as we were chatting about what to talk about today, we're thinking, God, you know what we have. I'm guessing over 40 years of experience doing budgeting between the two of us. And so we thought we'd have a little fun with this and share some stories that we have seen about great successes and, well, let's just say not so good successes or, you know, potential, you know, trouble, trouble, budget processes. And so, Paul, I'll tell you what, I will kick it off. And I'm going to tell you the one of the best budget processes that I've ever been a part of was really where the executives were not just behind the budget, but believed that the budget was a way to help manage a company.

[00:12:58] Co-Host:  Glenn Snyder: And in doing so, they actually had each ELT member, the executive leadership team members, would all have, as part of their annual review and compensation, how well they performed against the budget. And that really helped FP&A as we were going forward, because you immediately had the business saying, I want to make sure I understand this and I'm going to put a budget together that not only I can manage to, but something that will help me achieve my goals. And that partnership was just really phenomenal. Now, unfortunately, I generally saw that at larger public companies because they were a little bit more disciplined. They had. They had greater stability and they had greater processes that were in their. Smaller companies that I've worked at usually are a little bit more, hey, let's just put something together. We'll use it as a guide. We got to get something in front of the board. So, you know, I generally saw that. At large public companies. But I thought that was a great process when you get that executive leadership behind the budget process.

[00:13:59] Host : Paul Barnhurst: I agree I'm going to contrast just a little bit of more experience one year apart. Same company. The first one is probably one of my worst, and the transformation is probably one of the best I've ever gone through. So I got put in a new role about three months later. In addition to having a new role, I was the roll up person for the CFO. So I'm doing all the consolidation for all of North America for a regional CFO. They decided to give me a business on top of that because they didn't have enough to do. And so I had this new business for the first time. I managed a business that was SaaS based. So we're dealing with subscription revenue and the person that was in charge of the entire business unit. From a finance standpoint, he was not detailed at all. So I got some basic numbers. We threw together a plan and a month in it is 100% clear. We have zero chance of hitting our numbers. You know how fun that is to tell everybody. Basically, there's no chance you're getting bonuses. The numbers are. You know, we are, not only did we miss forecast the churn that had seasonality to it, it was double what we expected in the first month.

[00:15:08] Host : Paul Barnhurst: And sales came in soft on a subscription business. You could imagine what that means for the rest of the year. You're not making it up because you're now already two and a half months behind, basically out of the gate. And so it was just brutal. Get a new CFO. He comes in and basically the first thing he does is he makes us all rebuild all our models. He's like, these are garbage. His opinion wasn't quite that bad, but that's how he treated it. You're all going to redo it. We're going to make sure we have a good budget process. And I spent six months with somebody on one of the businesses that I didn't have at this point. They'd given me another business that was the most complex because it wasn't being forecasted well. So now I'm learning another business next year and doing basically both of those forecasts. And I remember sitting in a meeting, and this is what happens when you really start to dig in and understand the business. We're sitting in a meeting and someone asks about churn. Yeah, we know about the seasonality. We've looked at the last four years. Here's all the adjustments we've made. Here's, you know, the cushion we've given ourselves.

[00:16:09] Host : Paul Barnhurst: Here's why we're confident. And I just remember the CFO just kind of, you know, beaming over in the corner to see that transformation from a year earlier when it was like, oh, we're screwed. No, I'm confident we can actually hit our numbers and here's why. And we've done it. We know all our products. And it was more that finance transformed its processes. This and its knowledge really dug in and had new leadership. And it was a reminder to me of how important it is to have good processes. You have the right leader and really know your numbers rarely, especially in a big business, small startup, different situation to really know your numbers and those drivers and your assumptions. You're right, sometimes you can go into the big picture. If you're in a small business just starting because tomorrow the whole business might change. But a large company, that's not the case. So that was probably the same company. You're a part, just that transformation is the one that sticks out to me the most. From a terrible year where we were way off numbers till we beat our budget that year, and we knew everything that was going on, and we could really have conversations with the business.

[00:17:25] Co-Host:  Glenn Snyder: Yeah, I love that because to me, If you have the same budget process from one year to the next, you're not doing it right. You always should be making improvements. And when you know and you could say, look, this is what we did last year, but now look at where we are, that you naturally get that sense of pride to say, wow, you know, that's right. And I think that's great. Okay. So let's flip it around. Let's talk about some of the worst things that we have seen in budgets, because this is in some of the stuff that I was thinking about is more common than you could imagine. But one of the worst things that I've seen is when organizations, CFOs, just executives, whatever it happens to be when they think that they could just everything's going to click. You know what? Don't even worry about starting the budget process until October. We're going to be all done within one month. Don't worry about it. Everything is going to click. No problem. And you know what happens. You're still doing the budget in March of the next year, and everybody's trying to go through and manage their business in January and February and March. They have no targets. They don't know what's going on. All positions are on hold. The entire business comes to a stop. All because you didn't go over and think a little ahead of time and make sure that you had enough time to work through the complexities of the business. Because no matter how well you think your data is organized and how good you think your team is, it's always going to take a little longer. So you have to make sure you have all of those things planned, enough time to make sure that you don't end up in that situation. I've worked at two different companies where I've had the CFOs dictate to me how they wanted to do it, and both times we were still budgeting in March when we started in October.

[00:19:19] Host : Paul Barnhurst: I've been there. I've had ones where we were in April fiscal year, but, you know, we were still finalizing numbers in September 1st year and that type of thing. So I can totally relate, but I. I agree with you. The one is starting late thinking it's going to be quick, not giving time. Not to say you shouldn't have an agile and fast process and you're doing rolling forecasts, but okay if you think it can be done in a month, start in August, get that kind of final done in September, then make a few little tweaks and do your board meeting a month later. Give yourself that cushion versus thinking, oh, it will be fine because it almost inevitably is not. I think the, you know, kind of worse things for me. You know, sometimes just cause one time somebody taking headcount and assuming we're going to we the plant assumed adding headcount, but they took the last half of the prior year and just run rate annualized it. No, no you can't. There's all kinds of one time. And they kept just coming up with this number and we kept looking at it going this makes no sense. This is actually the back half of your forecast, but it's the idea of budgeting. They've done it on a budget too, and we've seen that in a few places. Like you can't just take a half year or a quarter and analyze if you have any level of seasonality or any level of growth which every business does. Right. If you're not normalizing something, you're probably not doing your job right. And so that was one of the worst that I've seen. I've seen that a few times where it just drives me crazy because I'm like, do your homework, dig in. So we don't come up with numbers that are just unachievable.

[00:20:59] Co-Host:  Glenn Snyder: Yeah. In fact, actually I have a very similar experience where except the annualized part wasn't even there. People would hire somebody in July, they would see the forecast for what they would cost, and they assume, well, that's going to be the expense next year. It's like, no, you didn't have them for the first half of the year. You got to double your expenses there. And all of a sudden they're looking at their, you know, their expense growth rate and they're like, this can't be right. Well, yeah. You know what? That's what happens when you hire people mid-year. You got to next year. They're going to be here the whole time.

[00:21:31] Host : Paul Barnhurst: Yeah. So many times had that conversation that can't be right. We only spent, you know, one, we'll say 1 million for our department's operating budget and it's 1.3 next year and we're told to hold it flat. Your back half of the year was 700,000. We've already carved out a 100,000 run rate. What else do you want us to do? You added all these heads. You did this. You did that?

[00:21:52] Co-Host:  Glenn Snyder: Yes. And that is the value of FP&A, right? During the budget process, I have more conversations about compensation and having people understand you hire somebody at 100,000, you give them a 20% bonus. It's not $120,000 in cost. You got payroll taxes. You have benefits. You have other things that come into play. And all of a sudden that $120,000 in comp that you think you're spending, it's more like one 6170. And, you know, it's one of those things that FNA. What I love about FP&A is that you have to be really both solving the problem for the business, but you've got to educate the business on how things work in a way to you on the back end. Because if you're a marketing person or sales person or operations person, you're not thinking about payroll tax rates or benefit rates. And so you're just thinking about, I hire someone, this is what I pay them. And you got to go over with. Yeah. You know, here's how it all comes together and you get to have that conversation. Usually it's a pretty good conversation because I love it. You're about educating others. Sometimes it's a little more difficult than others. You know.

[00:22:58] Host : Paul Barnhurst: For sure. I think we'll get into our top lists here in a minute. But when you mentioned Fully Burdened, I just have to say this morning I opened up my email for my medical insurance and yeah, 15% increase in premiums. And I'm thinking, okay, fully burdened rate. How much do I need to add and the rates I charge people, and where am I coming up with this extra x hundreds of dollars. They just, you know, in that personal life, you sometimes realize just how much these things do also matter in the business world when you start to kind of relate them sometimes.

[00:23:32] Co-Host:  Glenn Snyder: Yeah. In fact, and actually, I think some of the, some of that stuff is where people make the biggest mistakes in their, in their budgeting. A very simple example is there was a company I was at, had a big operations team, and they averaged about $70,000 per person in that group. And then there were people on the corporate side that were getting paid to $300,000. And they would just apply a 20% burden rate. And what would end up now company wide? They'd be right on. But when you break it up between the groups, they gave too much budget to the corporate side, not enough to the operations side. Because what happens is that the benefit cost isn't driven by compensation. It's a fixed cost per employee. So what ended up, you know, where most companies in the US would have about 910% payroll tax rate and probably somewhere around 14 $1,500 a month per employee for benefits. And so they were shorting each person on the upside, by about $10,000. And they had a whole bunch of those employees and they were giving 25, $30,000 more to the people on the corporate side, because benefits had a cap, it was a fixed amount, not based on salary. And so it ended up making a mess out of the budget. The first year I got there, when they used me, when I saw it and I'm like, yeah, we're going to split that now. And all of a sudden nobody's got a lot more accurate.

[00:24:52] Host : Paul Barnhurst: Yeah, I had to normalize whenever I did our pricing exercise, our call center, because we average benefits across every employee, but only like half the call center employees actually took benefits. So I'm like, if we load in all these costs, we're way off on what our contribution margin is. I don't care for the corporate fine. However you want to do it, we'll manage that from a budget if that's how you want to spread it. But we're going to have to adjust it for any kind of pricing analysis to say what's realistic, because otherwise we're not competitive on price, because we're loading in a bunch of costs that this business isn't really bearing. Yep.

[00:25:27] Co-Host:  Glenn Snyder: And so these are all the nuances of what will either make or break your budget process.

[00:25:32] Host : Paul Barnhurst: So all right. Should we reveal you start with your list here.

[00:25:36] Co-Host:  Glenn Snyder: Yeah. So let's do a little, take a step back for our audience here. So what Paul and I are going to do is we have two different lists, top five lists of the first one being top five tips for a successful budget process. And the second list is going to be the top five pitfalls to avoid during the budget process. Now Paul and I have not seen each other's list. And so this is as it is revealed to you in the audience. It's going to be revealed to the other one of us, and we're going to be reacting to it real time, where I think we will end up saying, oh my God, that's, you know, yeah, that needs to be on my list. I didn't even think about that. So this is going to be a lot of fun. So. Okay, Paul, you want me to start? You want to start?

[00:26:19] Host : Paul Barnhurst: Why don't we start with your list and then we'll reverse it for the second one.

[00:26:23] Co-Host:  Glenn Snyder: Okay. All right. Top five tips for a successful budget. Number five gives you enough for yourself. Enough time so the budget doesn't become a fire drill. This is something that we talked about a little bit before. Number four communication around timelines and expectations. If you want your budget to be successful, make sure that everybody who's involved in the budget process knows when things are going to be due, so they can plan accordingly as well. Number three, our department manager signs off whenever you put a budget together. Remember that it's nice that you and the finance are putting that together, but it's how the department manager is going to be managing their business. So don't just submit a budget without making sure that that department manager is comfortable with what the numbers are, and they understand it so that then they can manage it. Number two budget for vacancy and compensation. I've done this at most companies actually. I've introduced this at many companies I've worked at, and it saved them tens of millions of dollars in the budget process that allowed them to repurpose funds to start funding growth initiatives. When everyone thought we couldn't invest in anything, you know that there's going to be turnover. So if you don't budget for that, all you end up doing is giving each department more money than they need for their compensation.

[00:27:42] Co-Host:  Glenn Snyder: And it's all locked up in that comp line. And my number one success is what I call full service budgeting. And this is something that is a little unique, I think maybe to the way that I've gone out and done budgeting, but finance people could do budgeting. This is what we're built for. This is a big function of FP&A and marketing people do marketing, salespeople do sales. Why do we why do companies constantly go over and say, hey, salesperson, go do a budget marketing person. Go fill out the budget template. Instead of just pushing a template onto the business partner, finance should fill it out first. Say, hey, this is where I think you're going to land. Business leader now you tell me, where do you want to tweak knowing you have to stay within this number. And now it's just a conversation. And then you take those notes, go back, and populate the template again. You send it back one more time. Say, did I capture this correctly? It is the easiest process in the world for the business leader. It allows them to focus on what they're being paid to do, not doing finance work. And it also guarantees that when you get the budget template back, because it was done by finance, it was done correctly and everything's lined up in the right place.

[00:28:55] Host : Paul Barnhurst: Yeah, I love number one, a budget for vacancy and compensation. That's huge. Like I said, you could save so much there. And you know, I've seen a few companies take the point of, hey, we're not going to budget for it, but that's our kind of padding to make sure we hit our number. And I'm like, yeah, I'd rather know what it is and manage that other ways, but I've seen that done. But at least if you acknowledge it and you know what you're doing.

[00:29:20] Co-Host:  Glenn Snyder: Right. My  issue, when people go over and say I'm going to use that for my padding is if you have 100 different departments or cost centers, you are now spreading that bit a little bit in each of those, and there's not a big enough pool for you to do anything with it. If you pull it all out now, all of a sudden, hey, you got $5 million. Oh, you could go fund some new hires. You could go over and do this new marketing campaign. You could go, you could do a lot of other things with it. So to me, it's a much better strategic thing for the company if you actually budget for a vacancy.

[00:29:53] Host : Paul Barnhurst: I agree. So you have an idea what it is company wide. You want to understand the number and understand what it means versus letting every department do it. And it just kind of goes into that. Well, there's my slush fund, so to speak. I mean, not that it's a slush fund in accounting terms, but you know what I mean. All right, let me go ahead and do mine. We definitely have some similarities. I worded them a little differently. Mine comes from. So in my budgeting course I kind of took it from the list there. Let's see. There we go. All right. So number five for me, which I think you had this on yours kind of gets frequent check ins. You know, almost daily if necessary. One of the best things I've seen that I've seen done in plans is when corporate, if it's all the finance, anyone from the business, there's just a 15-30 minute touch base where people can call, can dial in and ask questions if they want. They don't have to, but I find it goes so much smoother when you have those. Maybe it's twice a week. It just depends on how long your process is and how big and questions you're going to have. But I'm a huge fan of that. Those frequent check-ins. Number four For a kickoff meeting to align on those targets, assumptions and calendar. Don't just kind of jump into it and try to do it all. And then you're like, why didn't we explain everything to everybody? Really level set expectations is the way I think of the kickoff meeting. I'm a big fan and this is really, you know, FP&A  do this in advance. Build your high level and detailed calendar and checklist and build in some padding because you're if it's something to do on Tuesday. Ask them for it on Friday because inevitably the business is going to have fire drills. And if you ask for everything on that deadline, when you need to turn it in, all of a sudden October is turning into what, January or February?

[00:31:47] Co-Host:  Glenn Snyder: Glenn or March?

[00:31:50] Host : Paul Barnhurst: March where you can. And this isn't always possible, but a pain management alignment, at least at a high level. Timelines, assumptions, targets. Like I've mentioned to you before, we had one where it wouldn't give us any targets. We got all done and they decided they just wanted to slash everything. And so nobody recognized their numbers when we were done. And then the business is upset because they really don't know what to do. They can't manage them. They don't recognize their numbers. Everybody's behind the eight ball. And so I'm just a big fan of doing whatever you can to kind of get that alignment. And then number one I had is before you even get started, before any meetings, you know, get an idea of what your high level is. Where do you think you're really going to land? Do the kind of work to have an idea in your mind of what it all looks like, and that gets into the full service budgeting, because if you've done that, it's much easier to take the templates, do that work, and go to the business. Here's kind of how we think about it. Now let's have a conversation about what we're missing. What's different in the business that we need to know about to develop this budget?

[00:32:57] Co-Host:  Glenn Snyder: No, I like it. You know, I think that there is a theme to all five of yours which is around organization and communication. And I absolutely, 100% agree with you that if you want to be successful in doing a budget, you've got to be organized. You've got to communicate and not just communicate within your team, but with everybody involved to make sure that they know what's expected when things are done. That high level calendar I actually am a big fan of in January, if you're on a calendar year in January, put out a full year calendar high level to all everybody who is involved in a budget process. Meaning like if they're a departmental manager all the way up to the CEO so that everybody knows, hey, here's when you're starting a forecast or when it's ending year, when you're starting the budget, so that people start recognizing what's coming when and they can be more prepared. I think it's great, great, great. Top five.

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[00:35:21] Co-Host:  Glenn Snyder: I yeah, I've actually so I was at one company where the corporate side of the business was about $400 million in annual spend. They did not budget for a vacancy before I got there. When I implemented it, we ended up taking about $21 million out of the budget that we were then able to repurpose into other things. And not only I mean, if at first it made people feel nervous, like, well, wait, what if I don't lose anybody? And you say, you know what, then I'll own that in finance, say that that variance is due to me and the finance group of what we did, because I know one group might not hit those vacancy numbers, but other groups are going to exceed those vacancy numbers. And it's going to all balance out. But where the executives and the leaders of the company really loved it is when they saw how much money we could then go and reinvest back into initiatives to help the business grow well.

[00:36:14] Host : Paul Barnhurst: And speaking of that, I'll share one more. Then we'll go to the other list. So I worked for a company where, you know, everybody had sandbagged their numbers a fair amount, and it was getting toward the end of the year. And, you know, the further you get into the year, the more you're like, stop holding back. If you got extra, give it to me. If you get a risk, give it to me. We're early in the year. You're less likely to come off the budget. It's kind of a standard practice. You can argue whether you should and when you should do it. But what had happened is one of the leaders had put everything out there. It got up to about August and he was coming in quite a bit better. And none of the other leaders put forward. They all had opportunities. They all had de-risk quite a bit from your new CEO. A lot of change. They wanted to hit their numbers, so they were all being very conservative. And we ended up being like 30 million better. And the one guy who came in really close to his numbers toward the end kind of reminded the rest of the executives, saying, we could have reinvested that. Now we've lost it all because we're just one unit within the corporation. We came in and said we were in, and the CEO of this business unit had known we could have made some different decisions and made some real investment, which this company rarely ever got, because this business unit had a totally different profit margin than the rest of the company. So they were the last to get investment, and that was a real good learning moment for me of also knowing when it's time to just put all your cards out there, because we know everybody to some level, holds back and has opportunities and risks. And that's another thing I learned kind of watching that unfold.

[00:37:46] Co-Host:  Glenn Snyder: Great example. 100% agree.

[00:37:48] Host : Paul Barnhurst: All right. So now we'll go to my next list here. Top things to avoid. And this one is I had to add this one. Even though it's not a specific thing as negativity, it is so easy to let the budget process be the process that sucks. Everybody hates it. I'm just going to accept that we've all been there and if you're not careful, things spiral and that spills over to your business. They'll pick up if you're thinking the whole thing sucks. And so if you need to complain, my co partner in training, Ron Monteiro, said he implemented this in one of his businesses when they were going through budget and had a meeting for the first five five minutes. Complain about whatever you want, get it out. I'll leave anything on the table from the employees. Once the five minutes is up, we're done and we're focusing on fixing things, he said. And it worked really, really well and people would just get it out, and then they felt better versus just kind of letting it spiral. Number four never. So avoid this. Don't ever trust the business assumptions and numbers. They bring you a project. They bring you analysis. I can already see you smiling without conducting your own validation of the assumptions and numbers, because they'll do things like, oh, employees cost 80,000. Oh, full burden. They really cost 120. Or oh, we don't need to ramp up. Our sales guys will be 100% from day one.

[00:39:12] Host : Paul Barnhurst: Not in any world I've lived in, you know, whatever it might be. Number three, this is specifically to finance. Avoid saying anything along the lines of this is your target or your number. So tell me what you want me to do. Then you're just basically acknowledging I'm just here to take a number. I'm an order taker, and it's your problem. Say, hey, this is the target we've set. Avoid ever making it a problem throughout the budget. It's always a wee discussion. Number two avoid including every single line, item and expense, no matter the amount in the templates you share with the business. There are things that are immaterial. They don't need to forecast the stuff that's $12 a month and 50 and 80. Maybe if you give them some backup and they want to go look at it and you put a top line or whatever. But make it simple for them which got into yours. On the top things we should do. So I'm kind of just taking the reverse of that one. And number one, adjusting the budget without communicating with and obtaining buy in from the business. Don't think, oh, it's just small. When, you know, make sure you get that buy in and they're aware of the changes you've made. Because I can promise you if you don't come back to bite you. Has it ever bit you, Glenn?

[00:40:37] Co-Host:  Glenn Snyder: Oh, yeah. I mean, and the hard part is, is that sometimes you're in a bad spot because you have the CFO saying, Make this change and let's just go and put it through and you're kind of like, yeah, okay. But I still want to go over and tell my business, because sometimes that change can usually be the way I end up trying to mitigate that if you make the change for the CFO, then you go back to the business partner. You say, look, I was told, I was told very specifically, make this change. You want to go and talk about that change? Fine. Have a conversation with the CFO. But I'm going to go and let you tweak to say, all right, if your target just went from $10 million down to $9.5 million, here's what the adjustment we made. If you want to keep it at 9.5 million, but adjust where things hit in the line items to make it more meaningful for you to manage. Let's go and make that change, and we'll keep the budget system open to adjust. So it's a more meaningful budget. But just to go over and have somebody do it on the back end and then surprise the business leader, you now have a different target. You have no say in this. It's not a good approach at all.

[00:41:44] Host : Paul Barnhurst: Yeah, exactly. We've all had the time where we've been told by management. Here's the change. Here's what has to happen. But make sure you communicate it back. You know, get buy in whenever possible. Sometimes. Unfortunately, the buy in is look, you have to live with it. Here's what I can do around that. I have no choice. If you disagree. Go talk to the CFO or the CEO or whoever it may be.

[00:42:05] Co-Host:  Glenn Snyder: Right? So I like your list. I'm going to point out a couple things that I liked about this. So, item number two, about every single item. The classic example of this is travel. Don't budget airfare and hotel and meals. You're never going to get it right. Pick one line in your travel and get selected all travel expenses in there, for one thing, and it's fine, you know? So that's where you could be much more simple. The other one on the trust. Don't trust your business. You know, two things pop to me when you say that. One is I was at a company where if the pipeline you know where in Salesforce that they identified as 90% or more, the sales guy would say, yeah, that's a done deal. Now from finance, we're like, no, it's not. It's done when the contract is signed and we're actually generating revenue. So you get different approaches because the sales guy wants to show, hey, we're bringing in all this stuff, but it's 90% for a reason and not 100%. You know, the other side of it is going back to that compensation and new hires. You kind of touched on this a little bit. I love the ones where it's okay, I'm going to need to hire someone right at the beginning of the year to budget them on January 2nd. Wait a second. The budget's not being approved until mid-December. At best, you're going to have the rec open maybe before Christmas time. By the time you get resumes, go through the interview process, negotiate compensation. They give a two week notice and they start at best. You're getting somebody starting March 1st. So if you're going to hire somebody through the budget process, you get to create a new role. Don't have them start in January or February. It's just you're just wasting budget dollars. Have them start in March because it can be much more realistic.

[00:43:47] Host : Paul Barnhurst: Amen to that one. I've seen it so many times. My favorite is when it's like, we're going to hire 20 people in February. No you're not. Where's the agency you're using to hire these people?

[00:43:56] Co-Host:  Glenn Snyder: Right. Unless you're going over grabbing people off the street, you're not doing that. Yeah.

[00:44:02] Host : Paul Barnhurst: No. And so that's a big one where I just help educate them on what's realistic. And the good news is we almost always have the historic data to show them. So you can at least come up with a realistic estimate based on history. You may need to adjust. There's reasons it will be different in the future, but at least you can bring facts to those conversations or you should be able to.

[00:44:24] Co-Host:  Glenn Snyder: You know what one of the best things that I've ever done, and here's a good tip for everybody out there, is when you go over and you're doing open racks work, take over the last year, work with your HR team and your the recruiting team And find out the date that the wreck was opened and when the when the offer was made and when the the start date actually was. And people because what I have found is typically if you're hiring for a role that's below a director. So everything from, you know, an analyst to a manager, a senior manager, whatever usually takes at least 60 days. If you're hiring at a director level, it's usually closer to 90 days. And if you got the VP or higher level, it's usually somewhere between 120 and 180 days.

[00:45:11] Host : Paul Barnhurst: As they say, 4 to 6 months. You. The higher up you go in the role, the longer you can generally expect to take it to fill.

[00:45:19] Co-Host:  Glenn Snyder: That's right. And so but when you have that data from HR and you share it with business leaders, first of all it's usually eye opening for them. They're not thinking about that. But now it's much easier to have that conversation to say, okay, you want this person to start on June 1st, then you know what? Let's go over. Let's open up the rec in April and we're going to make a note and I'll ping you want to make sure you're going to open up that rec in April. Otherwise if you open it up on June 1st, you're not really getting anybody until August.

[00:45:48] Host : Paul Barnhurst: Yep.

[00:45:49] Co-Host:  Glenn Snyder: All right. My top five. Number five. Make budgeting an internal finance project. If you go over and you are saying budgeting is all about finance and it's about finance putting it together, you are missing the point. The point is to help the organization manage itself in a better way within certain guidelines. And so this is if you're doing it all within finance, you're not engaging the business and therefore the business won't buy into the budget. So you're not being.

[00:46:20] Host : Paul Barnhurst: A business partner.

[00:46:21] Co-Host:  Glenn Snyder: Exactly, exactly. Number four, don't listen to your business. You know, sorry. Don't listen to your business partners' needs. And so the idea here is that if your business partner is telling you that they're going to have to do something. Don't be so rigid in the way you're putting the budget. Well, no. No, sorry. We just can't do that because our numbers won't add up correctly. We think you are there to help them, not to go over and solve a puzzle in math. And, you know, to make sure that the numbers are lining up. So make sure you're listening to your business partners. Number three A pitfall to avoid. Don't leverage business metrics as drivers. It's the underlying metrics where the story of the business really takes place. You could say revenue is 5% growing 5%. Great. Why? Well, it's because you've launched a new product. You went into a new market, you did some kind of bundling. You did, you know something like that? You hired some new salespeople. It's that's that's the story that's underlining the why and how you explain things. Incorporate that into your budget process. Don't just go over and look at the numbers and say, well, here's how we've always had revenue. Here's how we've always spent money. I'm just going to take an average. And there you go. Make sure you're tying it back to what the business is actually doing.

[00:47:34] Host : Paul Barnhurst: I love number three. I would add that to my list. That's so important.

[00:47:38] Co-Host:  Glenn Snyder: Yeah. Number two operates in a vacuum. Remember you were there to make sure this works for the whole company. And so if you just keep things to yourself and you, you know, this goes to Paul. What we're just talking about. If you're not communicating, if you are, you know, not listening to your business partner, if you're not engaging with them, if you make changes and you don't tell them, this is going to really screw up your budget process and your business partners will hate you. So you want to really go and avoid that. And my number one thing is to avoid moving targets. This is the hardest thing for people in the business to understand. And then oh you know what? Two weeks later. Yeah. You know, sorry. You sound 9.7 a week. No, you know what? We're down to 9.5. You know what? Really? I need you to manage about 9 million. They're just going to say I don't want to hear from you anymore. Figure it out before you come back and talk to me. And they're going to be very, very frustrated when you're working through that. So work on your targets ahead of time. Get buy-in at the executive level before you roll it out to everyone else. If something catastrophic happens because something happened in, you know, in October and all of a sudden, you know, the market shifts and now everyone will understand that, hey, wait a second. Everyone knows this just happened. We're going to do a little reset on the budget. Everyone will understand it, but don't keep on trying to adjust the budget targets as you go every week. Oh, it will drive everybody, including yourself, crazy.

[00:49:04] Host : Paul Barnhurst: I think everybody will expect, okay, if you get everything rolled up, you've done the first presentation to come back and there's some haircuts that won't surprise anyone. We're asking for a little more revenue, but if you're continually moving the targets, you're just killing your trust and the desire to work with you because they're just like, just leave me alone. Obviously, it doesn't matter what I put together, you're just going to keep changing it. So just go do what you want and then it turns into number five.

[00:49:32] Co-Host:  Glenn Snyder: Exactly, exactly.

[00:49:33] Host : Paul Barnhurst: That is it really kind of feeds each other. Because if you do a lot of moving targets, you're going to basically end up with a five for your plan.

[00:49:40] Co-Host:  Glenn Snyder: Yes. And so, you know, one of the things is to remember, the budget is about creating a path that the company that the board of directors is saying we are comfortable with you company moving and operating in this way. And so if you are constantly changing things and you are not working with the business and they're not aligned. How on earth do you use the budget for how it's supposed to be used? You can't. And so you really have to remember that the budget isn't just about finance, and it's not about having a particular number. It's about how you're going to be managing that business over the next year.

[00:50:19] Host : Paul Barnhurst: And that's exactly what it should be. Right. As you've said, plans are nothing. Planning is everything. It's about the process. Tying it back to your strategy, your objectives, your goals, and then you working with the business to help them achieve the numbers, to help them achieve the goals. I mean, nobody cares if you come in at 1.02 or 1.05. If you're moving in the right direction, the business is doing well. You can explain why things are happening. People are going to be happy. It's not about trying to be exactly on.

[00:50:58] Co-Host:  Glenn Snyder: That's right. And a lot of times people in FP&A, they forget why we're really here. They get so caught up in the process. And the numbers of fans. Number one, you know, a goal in any company is to help drive better decision making. That's what it's all about. It's how you go over and influence that next decision to make sure that you have the right facts and you have the right information, and you have the right context when you're going over and making decisions and whoever that business leader is, you're making those decisions. So if you keep that in mind now, all of a sudden everything starts to fall into place because the budget takes on a much bigger meaning than just doing a mathematical exercise.

[00:51:44] Host : Paul Barnhurst: Yeah. Whenever it's a mathematical exercise, you're asking for trouble, so to speak. And I love what you said about, you know, helping the business due West. He used to be the CFO of Grammarly. He defined finance in one sentence. This way. Help the business make better, faster decisions.

[00:52:02] Co-Host:  Glenn Snyder: Exactly. Now, I would, in the term better is, of course, subjective.

[00:52:07] Host : Paul Barnhurst: Yes.

[00:52:08] Co-Host:  Glenn Snyder: But that is typically where we would think more accurately, you know, more timely, more impactful or impactful. So that and that's the idea and that's how you get back to that. One of those questions that you asked at the very beginning about, why do I love that? It's because you get to go over and have an impact on how companies make decisions and how companies move forward, and the budget is a great tool for that. And by the way, for all the people out there who are working at small startups and say, yeah, you know what? We don't even do budgets because the company is growing and changing so much. We're really doing forecasting. Same concepts apply because if you go over and you just try and push through, like I've worked at companies where they want to do monthly forecasts, the FP&A team would never have the time to engage with the business. So all they would do is just churn through. Okay, we got our monthly reports out. Now let's go to the next forecast. Now it's time to do clothes again. And you're doing, you know, you're reporting again that the business was never connected. They didn't know how to really use and manage that forecast data. And then you get to a board meeting where a board member goes over and asks the head of operations or something about where they said they would be like, yeah, I've never thought I've never seen that forecast before, and now everybody looks bad.

[00:53:23] Host : Paul Barnhurst: And so I came into a company where I heard that conversation more than once, and it was not fun. Right.

[00:53:29] Co-Host:  Glenn Snyder: It's an easy thing to correct. But you got to make sure that you are aligning where the business is going, where you're saying, you know, the forecast. If you're just doing it for numerical exercise, why waste everybody's time? If you want to put a number in front of the board and say, hey, this has meaning, this is where we think we're going to go. You better make sure the people who are running the business can actually do that.

[00:53:53] Host : Paul Barnhurst: It doesn't matter if you do beyond budgeting. You get rid of a budget. You do a forecast, you do a portfolio. Planning still has to happen. And at the core, budgeting targets, whatever you want to call it about is planning. You can bash the traditional process and we all do. And there we've all seen the super long and questioned the game playing. And hey, should we separate targets and resource allocation and forecasting. And you can make a valid argument like beyond budgeting, I would make an argument. There's a lot of good things there that can be implemented, but whatever you call it, however you implement it, you still have to plan. And fundamentally it's all about alignment, communication, planning and moving the business forward and achieving its goals. At the end of the day, that's the goal. And if you're just doing a mathematical exercise, you're doing it wrong.

[00:54:46] Co-Host:  Glenn Snyder: That's right. And you should also go over it every year. Once you go through a forecast or go through a budget, do a postmortem on it. Where should we get better next year? Where do we mess up? How do we go over? Make sure we don't make the same mistakes twice. And I've talked to companies too, where they start doing their annual budgeting for a calendar year in March or April because it is a nine month process for them. That's honestly, you're missing the point on that too, because you're getting fine. You can't manage a business like that. So if you're out there and you are working in FP&A and you're looking at your budget process, the entire budget process from when you start to end should be under six months. But the bulk of it, from when you start really forecasting revenue to when you finished up your expense, you know, your expense targets and you got everything lined up, should probably be roughly three months. And then the month after that is going to be packaging it up, making sure, you know, you got your deck together to present to the board that type of thing. So usually again, we're here in August. It starts around August. You wrap up. You have your board meeting mid-December. The board approves the budget. Everyone's good to go starting January 7th.

[00:56:01] Host : Paul Barnhurst: And I know you've dealt with a lot of big public companies. I think that the timeline I am given is definitely the bigger the company, the more it's going to be like that. But I think with how quick things change now, I think eight, eight, 12 weeks should be kind of that, that max maybe there's a month in there that is preparing. But I think if you go anything beyond really three months for that bulk of the process, you're doing something wrong. I think in some companies it can be done in 4 or 6 weeks, depending on size, how much you're changing, because at the end of the day, on day one, the budget is wrong. Right. It's so it's all about that planning process. And I think getting more and more agile, which is what we're starting to see. But technology had to catch up. We've had to change our mindsets a lot of things.

[00:56:46] Co-Host:  Glenn Snyder: Yeah, I would say that there are companies that will do their annual operating plan, right, that they're looking at more of the the sales side of what's going on before you get to the revenue. And that usually takes a couple of weeks to align with sales so that that kind of extends the process. I'm also a big fan of strategic planning. So when you're doing your 3 to 5 year corporate model, high level plan, you kind of want to start down a calendar year. You want to do that in May or June so that the outcome of that is what influences your budget process and you want to have that completed. So some of that stuff can expand that overall.

[00:57:23] Host : Paul Barnhurst: Yeah, depending on how you count what, what all you're including. I've typically seen long range planning. Like when I worked at express it was typically February, March. We did it. And then we refresh it lightly once a quarter.

[00:57:36] Co-Host:  Glenn Snyder: And I've done it where, you know, several companies, we do it kind of in the May June timeframe. The results of that now flow into where you're doing a five year. Okay, here's the direction we're trying to go. Then you say, okay, here's what that one year looks like. Let's flow into revenue for the month of July. Create expense targets. In August. You roll them out to the business. You finalize all the details in September, October Dec is put together in November, and you're good to go for a board meeting in December.

[00:58:07] Host : Paul Barnhurst: Yeah, but now you spent 5 or 6 months. But the bulk of the actual budgeting process.

[00:58:11] Co-Host:  Glenn Snyder: If the work is within.

[00:58:12] Co-Host:  Glenn Snyder: A three month timeframe. That's right. And you've expanded it because you're doing long term planning as well, which isn't. It's technically you could say it's part of the budget process, but it's not really because the budget process is really about the next year. And what are you doing in the next year?

[00:58:27] Host : Paul Barnhurst: Well, I think we're coming up on time. We've been chatting for about an hour now. Any last parting thoughts for people on budget?

[00:58:37] Co-Host:  Glenn Snyder: You know, the one thing that I would say is to recognize if you're an FP&A and you're doing a budget, this is a great time to connect and learn about the businesses that you support. Don't just go over and take their numbers. Even if they hit their targets and they say, yeah, I need you to manage this. And here you had them fill out a template. Whatever. Ask them why. Ask them what's behind it. The more you understand how the budget's put together, the more you're going to benefit from that budget and do budget variance analysis for the rest of the year. And so and none of that, it's going to help you think about other ways that you could connect and solve problems for that business, because you need to have a greater understanding of what they're trying to do and how they're trying to do it. So use budgeting as an opportunity to reconnect with businesses that maybe you lost track of a little bit to understand them a little bit better, but to really enhance that partnership between that and and the business.

[00:59:31] Host : Paul Barnhurst: I like it. All right. I'm going to end with the joke, and we'll see if you've heard this one before. It is around. It totally fits with this theme. So do you know why the spreadsheet was constipated?

[00:59:44] Co-Host:  Glenn Snyder: I'm afraid to ask. But why?

[00:59:46] Host : Paul Barnhurst: Why?

[00:59:47] Host : Paul Barnhurst: Because it couldn't budget.

[00:59:50] Co-Host:  Glenn Snyder: All right.

[00:59:54] Host : Paul Barnhurst: So, all right. Thank you for joining us for another great episode, Glenn. I look forward to many more of these. And as you're going through budget season, I can boil it down, learn the business, communicate, get alignment early and leave yourself some time in this process. You know, there's lots of other little things we could talk about, but I think if you do those, you'll be in a much better situation than if you don't 100% agree.

[01:00:24] Host : Paul Barnhurst: Thanks for listening to FP&A tomorrow. If you enjoyed the show, please leave us a five star rating and a review on your podcast platform of choice. This allows us to continue to bring you great guests from around the globe. As a reminder, you can earn CPE credit by going to earmarkcpe.com, downloading the app, taking a short quiz, and getting your CPE certificate to earn continuing education credits for the FPAC certification. Take the quiz on earmark and contact me the show host for further details.