The Budget Isn't the Goal. Building a Better Business Is with Zach & Chris

Speaker A: And so, like, one of the things that I use, I don't want to plug any one tool specifically, but, like, Ramp has a feature where you can connect all of your different AI platforms, and they're adding more and more platforms to that, and you can see who, which API, which model, all that stuff, right? And so, like, I connected our cursor to that, and then I saw that, like, we had one person that was just blowing up our cursor bill. I could have gone into cursive, done it, but I had a nice, easy Ramp. I'm in Ramp every day, right? And so I pop that up, and I'm like, oh, my gosh, this one person's doing it, and they're using the most expensive model. And so I just went and said, hey, I can see this. I see it every day. I went and talked to the engineering manager. I said, let's have a chat with them. Let's not tell them they can't use this model, but let's see if they can use this model for one part of what they're doing. And the rest of the parts they're doing, they can use a cheaper model.

Speaker B: All right, welcome, everybody. We'll get started here in a few minutes, but if you're out there and you can hear us, let us know. Tell us your name and where you're coming from. So go ahead and let us know. We'll get started here. And just one moment. Give it a minute here. Let's see. Anyone have a good joke? While we're letting everybody get settled in,

Speaker C: I got one for you.

Speaker D: All right.

Speaker C: How do you introduce a hamburger? Meet Patty. Well done.

Speaker B: Chris, you got one for us while we're waiting?

Speaker D: What is, uh, two plus two? Five. Yes. That shows you're a FP and A and you're a finance person. If you would have said four, I'd have been like, pause. An accountant, man. Like, he's a CPA dude. Two plus two unequivocally equals four. That's a true FP and a finance person right there.

Speaker C: Paul.

Speaker B: I had a roommate that had a shirt, said two plus two equals five. For larger values of two, he was a total nerd, so I always say five. All right, we'll give it one more minute. Wait till we see kind of a few comments. Hopefully people can hear us, but we'll start here in just one more minute. Let's do one more joke. Does anyone know what the Vlookup put on their online dating profile?

Speaker D: I don't know.

Speaker B: Seeking an approximate match. It's true.

Speaker C: Yeah, I was along the same lines. I was thinking looking for an exact match or something like that.

Speaker B: Yeah, yeah, right.

Speaker A: I got would it be look up years ago and I'm all ex look up now. I couldn't even think.

Speaker B: Yeah, I know you're cool. The rest of us are old school.

Speaker A: Just wanted to get there, you know.

Speaker B: All right, well, why don't we go ahead and get started and do introductions. Uh, Bill, let us know. He can hear us. Great. We're just going to start now, so I'll say it again. If you're out there and you can hear us, please let us know where you're coming from. Put that in the chat, let us know your name. You're welcome to ask questions throughout. We're going to be doing budgeting and, um, forecasting, some best practice tips and some advice. We got an expert panel here with us today. But let's start with, I have my co host, Glenn. How are you doing, Glenn?

Speaker C: Doing great, Paul. This is going to be fun. I'm looking forward to it. Doing it live.

Speaker B: No, I'm looking forward to. We don't get to do live very often, so we're looking forward to your questions. All right, well, so I have Glenn, co host here with me and I'll do a quick introduction of, uh, Zach. So I have Zachary Ryle here with me or Zach. He works for Ask Elephant, if I remember correctly. That's the company today. Right. So why don't you take a minute and just tell us a little bit about yourself, Zach.

Speaker A: So, as Paul said, I work for Ask Elephant, which is here in Salt Lake City, Utah or startup. Taking on, uh, kind of the revenue and conversation intelligence side space. A little about me personally. You know, I'm. I might be putting my own foot in my mouth here for a little bit, but I don't consider myself as like a pure finance guy. I consider myself more as an athlete who's very fluent in, in finance and, and speaks it well. But I love just helping to run businesses, plugging in wherever the need is greatest and using my skill set that I've developed and growing up in the finance and FPA world as an operator just to make businesses better. On the more personal side, I have four kids, oldest of seven, youngest is about five months old. So got our hands full. It's pretty crazy. Love to be outdoors when possible, whether that's skiing, golfing, playing, watching rugby, you name it, that's me.

Speaker B: Thanks. Appreciate it. Zach. Glenn, you want to introduce Chris for us?

Speaker C: Yeah, so I'm very excited. It has been, I'm thinking, Chris, about two, three years since you and I were on a podcast together.

Speaker D: Yeah, it's been a minute.

Speaker C: We did a bunch. So my favorite guys to chat about, ah, with FP&A. Chris Ortega, who owns and runs Fresh FP&A. But Chris, I'll turn it over to you to do a quick.

Speaker D: Yeah, Glenn, you're always the man, bro. That's how we always did it. You're the man. Right, but nice to see everyone. I hope everyone's having a good day. My name is Chris Ortega. I'm the CEO of Fresh FP&A which is a global fractional CFO and advisor service company. We work with small to medium sized businesses, typically between one and about $50 million in revenue. And including me, I have four other fractional CFOs across the globe. We're going to be based in the Americas, in London and also Sydney. There's probably about 35 people at Fresh FP and a serving 30 clients across the globe. And that's what I do. And prior to starting fresh FP&A, I spent most of my career in accounting, finance and financial leadership. 20 plus years. Most of my background was coming into organizations, helping build, shape, scale and exit those companies. I've had the fortunate opportunity of taking three companies through acquisition, which has been awesome. And I'm based in Indiana. Fun fact about myself, if you guys can't see, I'm a huge Dragon Ball Z fan. Vegeta is life. So I got Vegeta everywhere and in Indiana. So shout out to the Boers as we uh, won our national championship and looking forward to repeating this year. But yeah, that's a little bit about me and looking forward to this conversation.

Speaker B: So any of you, if you want to address Chris, you can just address them as LB or Larry Bird.

Speaker D: Yep, Larry Bird.

Speaker B: Yep. Before I introduce the topic, we've had several people let us know we're coming from. So just some of the locations. Rwanda, Huntington Beach, California, Brazil, Sea, Bay Area, India, Puerto Rico. So we've got a pretty global audience. I'm sure we'll see more of those coming in. Keep them coming. Love to hear where you're coming from today. And to introduce our topic, we're going to talk budgeting. Everybody knows budgeting season is just around the corner. Going to be coming up here real quick. So we're going to talk annual budget, share some thoughts, some advice, both from kind of an execution, a leadership standpoint, how to think about it, some tips you're welcome to ask your questions throughout. And I want to start with just kind of a real basic question, and I think we'll get a little bit of a different answer from everybody. That's what I find interesting about this. So maybe we'll start with Zach here. Zach, if I was to ask you, what's the purpose of the budgeting process? How do you think about it?

Speaker A: It's changed a lot over, uh, my career, especially as I've moved down into smaller. But I think the way I would put it more simply is an annual budget is the plan that you're putting together for what you believe is going to be true and going to happen over the course of the next 12 months. Um, and what you need to do to execute and make that work. And so that's the simplest way I'd put it. Uh, obviously there's far more intricacies and details involved in that and how firm and how well you hold to that really depends on your leadership team and your board and things like that. But at its core, it's, it's you, your belief about what the next 12 months looks like and how you're going to make that happen.

Speaker B: Yeah, I kind of laugh when you said belief sometimes. It's the wish of the leadership board, but that's another story.

Speaker A: Everybody always elements of that, right? So you, uh, you got to play that game. You do.

Speaker B: Well, just locations. We had Brandon join us from planet Earth, so excited for that. And we have someone from Washington. Chris, how would you answer that question?

Speaker D: I think budgeting, uh, for our clients is checklist, and it's a false sense of confidence. Right. Um, we work with a lot of smaller S and B companies. So I always say the budget is the direction of where you want to go, but it's not. Things change so much in a business. Right? Like, there's acquisitions, there's new verticals you invest into, there's people that leave. So I think a budget is, uh, for a lot of companies that the SMB kind of space is really just that checklist of like, hey, here directly we want to go. Um, and it also gives, I always say, don't spend a whole lot of time in budgeting. Right. Like, there's no sense in making, uh, all this time. And when I worked at enterprise level companies, we would take, we would take months, it'd be September to December before we did anything. And the budget's done and all that information is played out. So, uh, for me, I think budgeting is for the SMB Space Compliance checklist here's where we're going to go. Um, and it's just a placeholder to look and see where you want to go with it. But, um, I always say, and I know we'll get to this topic as well, too, budgeting is just, you know, it's a. It's a nice. Where we want to directionally go. Forecasting, rolling forecasting is gold standard.

Speaker C: All right, Glenn, I'm going to take a little different view on this. And part of it is because I have worked for a lot of large companies in my career, although now I'm working a lot more small companies. But I see the budget as two different things. Number one, it's a guide. It's a guide for where the organization is telling each level, each business leader what where they want them to go and how they want them to spend money. The second thing is, it's a control. It's a control for the cfo. If you are a public company, you can't have business leaders going out and just hiring a whole bunch of people who aren't in the budget spending a bunch of money. It's a way that the CFO could control how the company is actually spending to make sure that they can hit their earnings goal. So to me, that's the big reason that budgeting exists, is to one, guide the business on where the board is telling them they want to be, and two, to allow the CFO to have the control over the rest of the business. For a financial perspective, I really like

Speaker A: that, and I think that's why I kind of hit on the believe thing is like, when. When businesses inevitably start to deviate from their budget, which is going to happen, right? The biggest thing I ask people, uh, when they say, like, hey, I want to do this not part of the budget, as I say, like, well, what changed, right? Like, why did you believe this was true three months ago and now you do not, and you believe that something different needs to happen. And I think that it becomes that natural mechanism to have that conversation and gives us the ability as the stewards of capital that we are in finance to really ask the questions that need to be asked and feel that we have done our, you know, our duty to, to preserve and try to follow that as best as possible.

Speaker C: Zach. I like that. In fact, it made me think. One other thing is it allows for accountability throughout the organization. When you go over and say, hey, this is where I think my business is going to be and you are not there, is it the board executives, whoever it happens to be, could come Back say, wait, why were you off by that much? And it's a way that they can also evaluate how well do you know the business and how well are you managing that business? So I think that that also kind of comes into play.

Speaker B: Yeah, I mean, I think.

Speaker A: Right.

Speaker B: You're seeing a little bit different opinions. You know, I think of a. I think control. Definitely bigger the company and just in general, CEO, uh, hey, is it in a budget? It's a way to have those conversations and to limit the constant, I need money for this or that or that. Like, well, is it? Well, no. Okay, well, let's talk about why we need it then. And so I definitely think there's a control estimate. I think the second biggest thing is it's really.

Speaker D: It's part.

Speaker B: It's just part of that planning process. Uh, it's preparing the reality. Have any of you exactly hit your budget, like down to the dollar, right? No. I once had a forecast where across the whole business, we came in, like, within a hundred dollars or something. It was like millions of dollars a bunch were off. And everybody's like, wow, you're a genius forecasting. I was like, no, if I could actually forecast like that, I would be going to Vegas. I wouldn't be working. Like, I got lucky.

Speaker A: And there was also a little part of you that didn't believe it. You're like, I did something wrong. This is. This can't be true. There's no way I got this right.

Speaker B: I knew all the ins and outs came in close in total, but I could see this business was off by like 300,000, but the other one was positive by 298. You know, so I knew the insides and outs, but when someone looked at the total, they're like, what happened? It's like, yeah, got lucky. So that's why I always say a big part of the planning, Paul.

Speaker C: You know, it's funny because the budget is not about right or wrong. It's not about hit your number or not. It's about the direction you're going and how you manage. And that's. That's really it.

Speaker B: Uh, well, that's why it's so important that you, you. You've set out your strategic plan, and your financial plan should help make that strategic happen. And then your operational needs to tie in. Like, we've all worked for companies, we've been in situations where the financial plan is disconnected from everything and it's just a mess because then everybody's like, I don't know where that number came from. I'm just focused on this. No, I mean, right. If you don't have people all rowing the same direction, why even have a financial plan if they're not aligned? It's just a waste of time.

Speaker D: Facts.

Speaker B: And I think we've probably all been there where we've been through the budgets. We're like, that was a waste of time.

Speaker D: I, uh, like literally an example of that man having a client. And it's like we worked through the budgeting process with them and they like, it's September and we got to kick these things off. And I'm like, do you understand we work in bigger companies and smaller is a little bit different, but smaller companies, there's so much things that move around that. Right. So spending two, three months to do a budget and you, you're happy, you do your, you do your report, you do your presentation, and then immediately that information is completely outdated right now. Enterprise level companies. And this is where I, uh, I love like the balance of Glenn because he has that, you know, enterprise, public company experience. And I do as well too. It is, it is different. Right? And it comes down to what I, what I look at is agility. Agility and precision. Right? Agility is saying, yep, I'm directionally accurate. I'm like 60, 70, 80% confident in where this is going to go. That's where you should have on your budgeting. Right. Once you start to get to precision, that is like, I'm, uh, 95% confident in where these things are going to go. So budgets that. That's always kind of how I've looked at it. And as we work with our clients that are more SMB focused, it's like, yeah, uh, this is a placeholder. This is where we want to go. But it also shouldn't be like this. This is not the precision of confident interval we want to have with it. So I think that is that balance. And I love Glenn's point and Zach's point where they mentioned around the control. I think that is a great element of it because kind of sets that sandbox and guardrail where you want the business to go.

Speaker B: Well, that's why I think there's a lot of value in some of these beyond budgeting and other ideas. The budget practices should really be about target setting. Whether you do portfolio. Uh, you don't have to do the formal budget process, but you need some kind of plan roadmap of where you're going targets. The budget process often becomes political. So I get why some people, like, I don't know if anyone saw this bear. Their new CEO did away with the budget process altogether. He said, in the worst of corporate America. And he went to a quarterly like planning sprints that they, they do and they allocate things every quarter. And look, if it works great. Are there problems with that? Yes. The key is not that you have a calendar and a very tight, rigid process, although you do need the controls. It's really about making sure you're able to help guide the business of where it needs to go when you're on the same page.

Speaker C: You know, Paul, it's kind of funny because you guys talked about the strategy side of things and I think that's very important. And we think back, what is FKA really doing? Right. If you're a finance business partner, your goals are to help the business achieve their strategic goals while main staying within the budget constraints of, you know, that the CFO is setting for the organization. Yep. And it's the combination of those two things. It's uh, how do we go over and get the company to where it needs to be without going crazy on how you're going to spend the money? And that's oftentimes what FPA is doing is having that conversation to solve that problem. How do I get the business to do what all of these great things, but keeping them within a cost perspective that the CFO wants or the board wants.

Speaker B: Glenn, why don't you lead this kind of next discussion? We want to talk a little bit, kind of core differences in the process, kind of depending on the company you're at, like size wise.

Speaker C: Yeah, absolutely. So obviously, you know, Chris has already kind of talked a little bit about the difference in his background from my background. Um, and we love having this debate because I think there's insight into both, both. And there's no right or wrong answer here. But certainly when you go over and you think about a budget process and you know, and I saw Brandon had some comments about, you know, when budgets should start. And Chris has talked about, you know, multiple months process and so on. Certainly at large companies, oftentimes you start with a strategic plan. And sometimes if you're on a calendar year, you're doing that in May, June, you're forecasting revenue in July, you're putting expense targets to get together in August so that you could roll out and figure out all their detailed budget in September, October, you do anything else that like, you know, polishing it up before in November so that in December the board can approve and you hit the ground running in January and you're like, oh, my God. I could spend eight months out of the year doing this thing, and in a few more months, I gotta go back to doing it again, Right?

Speaker B: Like, shoot me.

Speaker D: Right? That's. That's like the. That's like the hamster rice, dude. That's like m. Right.

Speaker C: Now, don't get me wrong, there is. Sometimes there's value in going through that. But the thing is, you have to. You don't go through a process for the sake of doing a process. You got to recognize what the value is you're trying to take out of it. And I've also been at small companies where you're trying to go over and just do a rolling forecast or budget, and you're like, okay, you know what? We're going to do something every single month because the business is constantly changing. But then at the same time, all you're doing is you're just updating your models, and you're not really engaging with the business either. So it's. How do you find the right balance through that? So I'm going to turn up to Zach, I'm going to flip this over to you, give your perspective on approaches to putting a budget together, timelines, uh, how do you do it, who do you engage, how often, those types of things, and then we'll roll it over to Chris as well.

Speaker A: Yeah, it's a great question. And to start out, the big thing is identifying who your key players are and what people want out of this budget. Right. And going from there. I remember I joined an organization and, like, it drove me wild for the first, like, two months I was there. Everybody was like, we. We do our monthly reporting. And I'd say, like, okay, sales was supposed to this number, and the CR go, what's. Oh, oh, that's the finest number. Never, uh, mind. Yeah, yeah, it's fine, whatever. And then, like, we should move on. I'd be like, what? What? Uh, like, that's your number. He's like, no, that's the finest number. Uh, and so, like, what I did when I got full control over the budget and reforecasting the business was I just sat down with the CRO and was like, what do you wish the forecasting, the budget told you about your team? And we built the budget, the forecast in that way, right? Because I'm going to have to spend time building it anyway. So I might as well build it in a way that, like, the CRO gets some value out of it and I get value out of it, right? Because at the end of the day, that's it's time spent. Right. And so we just blew up the process started from scratch and I just asked CRO, what do you wish you knew about your team? When we got to the end of the month and you have a number and you beat it or you missed it, what would you like to know automatically so that you can go explain this? Because ultimately you're going to have to explain it. I'm going to tell them you missed or you beat, but you got to explain it. And that's how we started the process is just identifying what's the most important elements of the business at that point in time. We were in that growth, growth at all costs era. And so revenue and new revenue was what mattered most. And so I spent the most, bulk of my time with the CRO talking about sales. Right. And then I spent the next little bit talking about retention and then there is very tiny bit talking about OPEX and, and the rest of the business and because that was what was most important to the business at the time. And so I think it's all cost. Yeah, yeah, money was free back then. So uh, it was a fe dream. But so I think that's it is like first identify what is most important to the business. What are we trying to accomplish, tying into that strategic plan, then identifying the players and then sitting down and saying what do you wish this did for you? Like let's make this. Because it's going to suck. They're not going to want to do it. But if you can make it beneficial to them, suddenly they're, they're leaning in and saying well uh, if I get input, here's how I'd actually like to do that.

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Speaker C: I like that. I uh, mean Zach I think you hit on something that that's absolutely key. It's not an exercise that's just for finance. It's about the business. And especially if you want to go over and hold people accountable, they got to be part of the process. They have to understand what went into the budget. How do you hold somebody accountable if they don't understand how it was put together? Right. So I think going out, having, you know, making sure you're talking and just being upfront and, you know, opening it up to the business and saying, hey, we're going to do this together, it's not a finance exercise. It's an organizational exercise.

Speaker A: It was praised this because, I mean, we just broke down so simply. Like, I. I remember sitting there and we said, well, let's look at, like, what does this imply that each sales rep is going to be able to close in. In ARR. And then we looked at that and we said, that feels like a good number. And then we compared it to the prior year and we were like, okay, this doesn't feel like a good number anymore.

Speaker D: Right.

Speaker A: We need to change this because this is not telling the story that we want to go defend and tell, uh, to the CEO and say, like, oh, our reps are going to be 50% less productive than last year, and we don't have a good debt defense for why. Right. And so, um, you know, I think when you get to that level, then you can. It really actually helps you be accurate because now you can say, well, what real results do I have to anchor us to? And who is the person that's actually driving those results? And do they believe that? And if they believe it, then at least I've got that going.

Speaker C: Absolutely. Chris, what do you think? What's your take?

Speaker D: You know, I have a client portfolio of six clients on my portfolio where I'm their cfo. And like, this may be a wild take on this, but I don't even start with the numbers. Like, don't even start the conversations that we have. And to kick everything off is conversational about the business. And specifically, we're focused on sales, marketing, operations, people. Those are the four drivers in any business revenue you're bringing in, how you getting those customers, how you fulfilling it, and the people that are doing the work. Right. So when we kick off right now for my portfolio, as we kick off that process, we're having conversations about the business. What's going good? Like, let's just have, uh, a. What's going good in the business? What's going good in sales what's going good in marketing? What's going good in operations? What's going good for our people? What are things that we need to improve? What do we think's going bad? So all, uh, that conversation, that alignment, that viewpoint, right before you even talk about a number is probably for me. And what I find is the most valuable aspect of that process. The budget, the forecast, the P and L, the cash flow forecast, all that other stuff is the outcome of that. But having those discussions, challenging those points, what are people seeing? What are we seeing in the market? Like, that time spent as a. And Glenn, you talked about this. That time we spend and what we do and what I tell my CFOs do, go spend that time with your client. Like, I'm literally gonna sit in a meeting with them on site. I'm going to New York, I'm going to Denver, I'm going to where my clients are, we're going to spend a day. And none of that outcome is going to be, oh, yeah, I'm going to work on your plan, right? Like my FP and A team will go do that. I'm spending that time to realign on the business. Where are we going, what opportunities we see, what challenges, right? Like, that conversation is much more important and fruitful because now you can take that and you can say, hey, sales is feeling really good. Here's an opportunity that they have. Here's some opportunities we can make some investments in. Now you start to put a plan together from the direct insight and feedback that you got from that leadership team right now where a lot of people and I failed in this, guys, I'm. I'm going raise my hand and say, I failed in this, right? Both my hand. Paul raised his up, right?

Speaker A: I don't even know what you're going to say, but I know I failed.

Speaker C: I give up.

Speaker B: You bring out who to sell. I just raise both hands, drop in

Speaker D: the chat if you failed at this too. Because I'm like, I failed at this. You start the budgeting process and here's where the failure happens, right? You're like, all right, let me give the business this run rate plan and say I, uh, look at the last eight months and if we run this out and let me just give them a baseline to operate from. So the entire conversation, that first time you're talking with sales, marketing operations people is from a financial lens. It's like, I gave them this baseline because I wanted to get started on it, right? I've done this and now the conversation is less about it's. Quantitative than the qualitative aspect of it. So that's where we start. That's where I'm in ongoing conversations with my six portfolio clients, where it's like, I'm in the room. We're gonna spend a day, we're gonna talk about the business. First hour, we're gonna talk about sales. Second hour, we're gonna talk about marketing. Third hour, we're gonna talk about operations. Fourth hour, we're talking about people. We go have a break, we go have lunch, and then we have the plan around that. That's been super insightful. And it shows you're connected. It's like, yes, that's our cfo. And then he's gonna. His outcome is gonna give us these plans and stuff. But you're learning the business. You're learning. You're getting that direct post that is so important.

Speaker C: You're right, Chris. Because at the end of the day, if you're putting together a budget and it doesn't connect to the business, it doesn't matter. It's not about the numbers. It's about what's going on with the business. And again, if you're a sales leader, if you're an operations leader, if you're the HR leader, your budget's supposed to be guiding you to where you're supposed to be taking the business. And if it does not connect because you started off in the wrong place or you're ending in a place that doesn't make any sense to the business, your budget's not going to be any good. It's not an exercise in numbers. It's an exercise in understanding.

Speaker D: That's a gym. That's a fire. Paul, we should do a fire emoji on that one. That's a fire emoji.

Speaker B: We'll keep that in mind. Well, it's an exercise in something scary. I'm kidding. All right, so I think we've had a good conversational around purpose how to think about it. I want to get a little practical and just kind of get thoughts. When you, when you get into a budget, the key starting is you have to end on understanding. You have to tight depend, uh, the plan. You got to have, you know, operational and think about what the business needs. It shouldn't be a finance exercise. Now you're into the budget and you're doing it. I'd love any thoughts you have of kind of how should you think about that process? We all hear top down, bottom up, lots of different methods. Any advice on how to think about kind of that Forecasting and things that have worked well for you. And I think company size, lot of different things make a difference here. But any kind of thoughts you'd like to add to that, we'll start with you, Chris.

Speaker D: For me, I think top down, bottoms up, driver bay, all the, all those things, right. For me it's very simple, right? What are the four most important KPIs in that entire business for us when it comes down to cash, Burn, cash, run rate, revenue growth, right? Profitability. That's it. That's it, right. So like all these extra, uh, now everything in the business feeds to that, right? So when I'm sitting down with my clients, we're focusing on those. And also it's not the first time for my portfolio clients or a fresh FP and A that we do. This is the first time hearing this stuff. We're constantly reporting these things. So when you walk into that budgeting process, they already have an idea like, I know, I know Chris, he's going to want to talk about cash, he's going to talk about burn, he's going to talk about revenue growth, going to talk about profitability. So for me, in that I like to keep it on what drives the business, what should drive a decision in the business, right? Sometimes too many people measure stuff and it's like you got 20 different things you're measuring, like realist. Take a step back, right? If you're measuring 20 different things in a budget, if you break that down over a quarter, right? That's like what my math is like. That's like four or five of those. You have to be successful every quarter to do. It's unrealistic, right? So for me, getting that practical sign when we sit down with clients is like, you already know the things we're going to talk about. So now let's align the business, the operations, the investments, the strategies. We want to have it around that, right? To me it's a very clear funnel. Strategy, tactics, metrics, milestone execution. That's it. That's what you gotta do, right? And that's where we kind of bring into. Because agility's in. We're working with, I'm working with S and B companies, right? One to $50 million rapidly growing, expanding, buying new businesses. They're constantly moving. So agility is really important. And when you anchor it on those four things to be agile about it makes it more where like the business can understand that. And like, I know how this ties out. I know if we invest in this salesperson, this is going to help this is going to hurt our burn, but it's also going to help the revenue. They automatically start to see how those levers move. So that's where I've seen it be real successful from a practical execution perspective.

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Speaker C: You know, Chris, um, it's funny because again I think you and I were going to come from a different angle. I think everything that you talked about from a, from a small company perspective is spot on because of all the movement and the uncertainty that you have in that type of business. You go from uh, a large company and Paul tied back to it. I think it's a combination of both top down and bottom up. And the reason is, is that you got to start with first you do your strategic plan, you got to align to that. Then you got to be looking at your revenue. Once you have your revenue, if you're a public company, the next thing is, hey, cfo, if you agree to this revenue, what do you need earnings to be? You know, because you got to hit those earnings targets and then it's okay, now I have my bottom line and I have my top line. How do I back into those expenses? And you build the expenses bottoms up, saying what are we already committed to in people in contracts that we signed and so on and then how much money is left over and. And you start filling it in. And so that's kind of fpa before you go out to business, business units with hey, here's your budget target or Whatever. You got to have that perspective. So you start top down with the, you know, with the revenue, and then the CFO from the earnings, and then you got to go bottoms up, really, on the. On the spend side of the business and connect all the dots. So I think it's kind of that. That combination. Now, of course, if you're somewhere between that large enterprise and that small business, you're probably going to land somewhere in between that, too. And my guess is, Zach, you're. That's probably where you're going to be sitting.

Speaker B: Yeah, I mean, I'm going to share a thought before you go, Zach, real quick, at my canyon. So I think.

Speaker D: You know what I think I was

Speaker B: going to say I did an interview with a guest, and I really liked

Speaker D: the way he thought of this.

Speaker B: It wasn't so much top down, bottom up, but he said, look, get your revenue plan right. Start with your revenue and almost everything else. Because kind of to what Glenn said, you have an earnings you want to hit or you have a number. The rest of it's math. Where do the expenses need to be based on where I want to go, how much cash I need, whatever the outcome may be, what profitability I need to hit. So you figure out that revenue, make sure you have that really, really good. And then expense is kind of a natural outtake of that. Unless you have a business like I did, I supported Travelers check, then all that mattered was reducing expenses. What do we have on the balance sheet that nobody's in cash yet? Very unique business to support, but that's another story. So, I mean, it's not so much about the method. You can land in between. Sometimes you need to be really detailed. Sometimes you need to be bottom up. But what's most important, how do you start with that, and then what needs to be built to support that? Okay, go ahead, Zach.

Speaker A: Listen, I don't think I'm gonna add massively anything new to what anybody said here. Right. It's all true. Um, and where you land is a combination of what you're comfortable with, what business is comfortable with, what. What works for the business. Right. Um, you know, one of the fun things that I've done recently is I've, uh, I've just let people ask whatever the heck they want, right? And I'm like, sure, yeah, go for it. Ask for that, ask for that. Put it all in.

Speaker B: Let's put.

Speaker A: Let's put full.

Speaker B: Let's.

Speaker A: You get whatever you want, and we put it into a budget. And then I show them what happens, right? I'M just like, all right, well, sales asked for this, and you asked for this. We put it all together. Uh, we're out of business in three months. All right.

Speaker B: Yes.

Speaker A: Any questions before? You know, and then people are like, oh, right. And so then the conversation turns into like, hey, sales, you know, you're asking for more than really you should get. Why do you believe that you're more important than cs? Why does. Why should. Why should I tell CS they actually have to do less and they get less money than you do? Like, give me a reason to go and have that conversation with CS and not feel like I'm just being a total jerk to them. Um, in fact, I'm going to have you join that conversation with me, and you get to tell them that you get to take some of their money, and they're like, oh, well, I don't want to do that. It's just really like, you got to know your people. You got to know what drives them. Right. I don't think of it too dissimilar from, like, creating a commission plan for a sales rep. Right. Like, when you create a commission plan, you know roughly how much money you want to pay out, uh, for a specific deal. Right. And you then know a behavior and an outcome that you want to drive. And so you write a commission plan, if you write a good one that drives to that behavior and makes that happen while making sure that you're not paying out more than you're comfortable paying out. It's the same concept. Right. So when that, uh, however you're designing your budget process, you have an outcome in mind. You have a goal of someplace you want to land. Right. And now you want to design your process that incentivizes and encourages people to align to a behavior set that's going to get you for that outcome.

Speaker B: I like that. I like the way you said it there. I think that makes a, uh, makes a lot of sense. And we'll let anybody know. Feel free to put any comments, questions you have in the chat. We've seen several there, so appreciate that. We'll address any of the questions we can. So we talked a little bit about method, and, you know, more than the approach is what are you trying to accomplish? I think Zach got to what are your goals and what will best help you get there? And it's going to be different in different businesses. There is no one right way.

Speaker D: Yes.

Speaker B: Uh, usually it's a mix of bottoms up and top down. And if you start with bottom up, like Zach said, you. You pull it all Together. And it's never anywhere close to what management's thinking. Especially if you take the approach of put in everything you want. You start with the wish list, then the conversation and the fun begins. Glenn's nodding his head. Everybody's like, yeah, right, We've all been there. And if you do with that approach, that's really where the budget process starts, is when you have to start negotiating and figuring out how you get a cohesive plan that everybody can get behind that management can accept.

Speaker A: And that's a combination of both.

Speaker C: I, I agree. I mean, and it's, you know, it's, it's about the trade offs oftentimes. Right. I like the idea. Yes. Start with a wish list and, you know, but go in, make sure if you're going to go to your business partner and say, hey, give me your wish list, let's see what we can do. Make sure they understand they're not getting everything on their wish list. Right. Just because you're asking for it doesn't mean it's going to be in the budget. But you start with it. And then you go over and say, okay, how do we solve for as much of this as possible, given that you can't spend more than, you know, 5 million bucks in this team or, you know, whatever it is. So now you got to say, well, where's the trade offs going to? Right. You want it? Maybe you shouldn't go over and do that team off site in Hawaii and instead that will allow you to go over and do this other thing that you want to do. And so that's the trade off and that's the discussion. And it's where it's really more about that connection with the business partner, understanding what their goals are that they're trying to achieve. And again, saying, how do we get you there without going nuts on how you're going to be spending money? Because it's not just, you know, it's not a money tree. You don't just get to go over and keep on picking dollars off the branches. You got to go over and make sure that you stay within that constraint that finance puts on you, which is that budget. But you got to say, all right, here's how I'm going to achieve those goals. And it's that trade off, that connection with the business.

Speaker A: That's exactly right. I mean, like, finance has this bad rap of being the people that say no because we're tipping the people that have to say no. Uh, but I think, you know, as you go, like, what makes a good budget process work is that you've spent the year before building trust and showing that right. You, you, you, you are trying to make that, uh, you know, not just say no, you're trying to, you're trying to say like, what are you trying to accomplish? What are your goals? And let me use the budget as a tool to help you accomplish those goals throughout the year. And then when it comes to budget season and actually creating this budget, putting it all together, suddenly there's a lot more trust. They're a lot more willing to say, I don't know for sure that I need another headcount, but I know that I would like to have that because it's a tool I can use later this year to help us accomplish our goals. Now you have more information, you have this more trust, you have greater buy in because they know that if I say five heads and we end up only hiring four, I might be able to use that fifth head's money for something else. And Zach will let me, he will let me do that because he knows that will accomplish the business needs. So I don't have to be as like fighting tooth and nail for everything to be perfectly in the right spot. Yeah.

Speaker C: And in fact, Ash, and the thing is, when you are building out that trust, you're not doing this budget exercise at one point in the year or one time. You're doing it throughout the year. You're having those conversations. It is an ongoing conversation that you're building out there. And I always like to say that, you know, if you go over, you have that thought partner status with your business partner where you know they're coming to you proactively and talking about what they're doing. That to me is that, that's kind of that FPA nirvana part where it's like they think of FPA as part of their business and they trust you as your, you know, that trusted advisor. Ida, I had a person who I was supporting and she went over and just as feedback to my boss that she was saying about me and she said, I want Glenn at the table with me whenever I'm making a decision. And I'm like, I can't. I. I'm like, that's it. I. I'm like, I'm. I'm done. I can't go any further because that's where you want to be. And you know, and having that when you are going through a budget process, when you're at that point, it's not adversarial. It's not about, you want this and I want this. And, you know, I'm going to force you into these different situations. It's about, hey, you know what? We're in this together. And that's really what. If you do your budget the right way. It's not about finance is pushing this on me. It's about, no, no, we're all moving in the same direction, trying to achieve the same goal.

Speaker A: I always tell my. My analysts and my team members, like, I'm assigning you to this person. Go make yourself indispensable. Right. And if your FPA work suffers a little bit from that, that's fine. And they're like, what do you mean? I'm like, I mean, if they have some stupid spreadsheet that's broken and takes them forever to update, and it doesn't have anything to do with FP and A. You're really good at spreadsheets. Go fix their spreadsheet and make it automatic. Like, just do that. And they're like, oh. And I'm like, and if that takes away from your FPA time a little bit, so what you've built trust, you've built this, you've become invaluable, so that when they say, hey, I need to make a decision, they're going to call you into the room. And now I have eyes and ears in that room that I might not have been a part of, and I have trust in that process. And you can come and share that with me.

Speaker C: Absolutely. In fact, the one thing I would caution you on, and I had a, uh, I had a senior VP I rolled up to who warned me, said, like, glenn, I think you're a little too close to the business. And what he meant by that was, sometimes the business wants you to do things that takes you away from where the finance organization wants you to be. And I've always told him, I said, look, when you do it right, you have one foot on each side. It's a balancing act. You have to go over and say, I recognize what is needed by the corporation overall and what my role is in that. But I'm also out there to make sure that each business I'm supporting, I'm working with is going to be successful. And that's when sometimes you got to be that good business partner and you got to say no to the business. And it's not about just, hey, no, you can't do it. It's, no, you can't do it like that. But let's talk about how we can get you there and that conversation. So you make sure you're maintaining that finance discipline while helping the business achieve.

Speaker D: If I add to that too. Right. Like, it. It's like when fresh. FP&A is my company's name. Right. But FP&A for us is not financial planning analysis. Right. We are financial partners and advisors, and I think this is what we're talking about. It's important first to be the financial. Yeah, I mean, I, I, like, literally, I created this five years ago, and I was like, what? Like what? Uh, I wasn't just great at financial planning analysis. I'm like, and hon, like, if we're being 100, like, cards around the table, technology should be doing your financial planning analysis. Right? The true value added. Ah. Kind of what we're talking about in all this. And I, I think this is the value that our clients see with us is like, no, Chris is our finance partner and advisor. Like, that's exactly what you want to be looked at. And that's what Glenn talked about. Like, you don't want them to look at you and be like, yeah, like crystal, you know, Chris's team. And deep. Uh, no, financial partner and advisor first. Then the outcome is going to be the financial planning and analysis. Right? Like, that's. That's the goal. That's where you should be striving for. Because in Glenn's situation, now you're in both of them. I'm, um, giving my finance. Right. The financial planning analysis, and I give the business the financial partnership and advise me. And that. That's been, like, my philosophy and how I approach the conversation, how I tell my team to approach it. Like, go be that person for them. Like, if they come to you and like, man, Chris, I don't know how to, like, like you said, Zach, uh, make their. If you can make their job, if you can turn them from pain to productivity, you created value. That's. This is simply it. It's like, I know the business is pain. I can turn it into productivity. I, uh, created value. And as a business owner, for me, it's my job to monetize that. Right. So that's. That's the whole piece of it. It's a mind. It's less of a skill set thing. Right, right. Like, it's more of, like, how do you approach that conversation and be like, I want to be this sales, this marketing, this operations. For me, I want to be that CEO, owner, or, uh, founder. Right. I want to be their financial partner advisor. And that's exactly how they look at my team as their CFOs. Like, yes, that's not the people that's doing our budgeting and our forecasting. That's the people helping guide the business. Right. Like they're helping us with international expansion. They're helping us, we're raising our safe note, they're helping us with this acquisition. They, that's what they do. And that's, I think that's an important point to highlight, is that's truly where you want to be.

Speaker C: And Chris, what you just described is the exact same whether you're in a small business, a medium sized business, a large business, global business, regardless of industry, it's the approach that you take that matters and that goes across everything.

Speaker B: You have to be a partner regardless of all the other stuff that goes with it. So, you know when you were talking about sometimes saying no, one of the best ways I've heard it is don't say no, but say it's more of a no end. Like this way doesn't work. But here are the opportunities you need to make.

Speaker A: Here's what has to be true.

Speaker B: Uh, here's what we can do, here's what has to be true for that to work. And they'll come to their own conclusion of. Oh, so you mean it's not a good idea to spend that much money for a really bad return. Yeah, it's not, you know, whatever it might be. But I want to get a little tactical for a minute and I want to touch one area that I know you've dealt with, Zach. And I imagine you have as well, Chris, supporting some tech companies, tokens, AI. I think everybody's going to budget season, so let's give you a little more tactical. How do you think about forecasting this area? Any advice you'd offer people? Because.

Speaker C: Right.

Speaker A: Any of you watch, any of you watch Yellowstone at all? No, no, I haven't watched it, but I've seen like the clips and there's this clip where they're like talking about like how to get the cattle into the corral and like, it's always messy and, and the owner comes out, he's like, hey, have we figured out a better way to do this so people aren't getting like, you know, beat up and just like this. And he goes, nah, best we got is, you know, effort. Just, just go. And he's like, all right, well, eff it, let's just go. Right. Um, that's kind of how I feel about tokens right now. But, uh, you know, we're all figuring it out. I don't think anybody could tell you that they Know it. I, um, think we all think, like, you know, Uber is a great company. We're all like, what a smart, awesome, incredible company. They blew their entire token budget before the end of April for the full year. They blew it. All of it. Gone.

Speaker C: Poof.

Speaker A: Right? So we're all figuring this out. Um, and it's crazy because an experience we had here is like, our margins were not where they needed to be. I started pushing the team on margins and costs and what models are we using? Why are we using. This model is the best model. What value is it creating? And then, you know, the next day, ChatGPT was like, hey, we were cutting Luna prices by 80%. And I was like, oh, uh, okay. I guess a huge portion of my problem just got solved. Push everything to Luna. Right. And it's like, I can't even control that. Right. I have no. I had no idea that was coming. I had no way to prepare for that. So the AI is this, like, I'm glad we're talking about it. I'm going to do my best to tell you how I think about it and how I do it, but at the end of the day, like, man, it's. When we talk about a, uh, changing market, a changing environment, AI is changing every week, every, every day, every month. Um, it's just constantly different.

Speaker B: Yeah. So basically, no darts at the wall

Speaker C: with your eyes closed. You might.

Speaker A: You might have bullseye.

Speaker D: You don't know or ex. Ask Gemini where to throw the door. Just like, Gemini, where should I throw this door? And it'll, you know, you ask Jim and I and they'll be like, that's a great idea, Chris. I'm, um, on board to help you do this. Right.

Speaker B: Like, I like working.

Speaker D: No, but the AI piece of it, we have a client, their token usage. So where it all came down to is a philosophy. So, like, 10,000, like, not in the tokens. You have this strategy of shadow AI, right? And what we found with this client was they had people using Copilot. They had licenses, they were paying with Copilot. They had the shadow people using, uh, Gemini and ChatGPT and Claude. And they were just like, it was everywhere. And it was on credit cards everywhere. So don't even give me in the spin side of this stuff. But, like, it was everywhere. Like, oh, got this AMEX card and got this. And it was. It was over the course of three months, that element, 10 15x. And I was like, something's wrong here. Right. And what we found out was this shadow, it is, uh, here's the thing, as CFOs, finance professionals, you have shadow IT running rampant in your organization, no doubt about it, right? And the first place we started to solve this for that client and for this business was like we needed to have governance around, just AI, right? Like we need to come in and it was a partnership. They didn't have a CTO at the time or chief Information officer. So it was a partner that we worked with, worked alongside me, worked alongside the client and we developed an AI governance framework. Here's how it's going to be used, here's the tools we're going to use, uh, here's how we're going to monitor this, right? So the first step in that is like you have to identify and know shadow AI is running rampant in your organization. How do you partner with your technology, your information? Sometimes maybe you're the CEO to say we need to set governance and guard. We need to set the sandbox that people can operate in, right? And like a lot of it was just people were using claw tokens that had no, they're using claw. They're using the highest, you know, the, the highest algorithm and version of. And it's talking, it's costing the business so much money. So a lot of it is just you have to address shadow IT work in setting the governance framework and that sandbox of tools that operate and monitor that because like that is going to balloon. And that's what these AI companies want you to do. That's why it's like they want you to prompt as much as possible because they want you to use this stuff. So you have to buy the additional card. Uh, we've all been there, right? I've been there in cloud usage and I hit my limit and I'm like, I can't wait, I can't wait till tomorrow. Like I need to, I need to drop this 25 bucks like right now to do this. You know what I mean? So that's a critical area. And also here's the other for CFOs out there, right? To monitor this, move that to cost of goods. So move that to your gross margin. Right now it's sending your opex. You don't see it, you're doing your run rate forecasting on it. Move that to your cogs, move that to gross profit, then you're going to have a lot more inspection on that.

Speaker A: I think the other thing too is like, it's just that, ah, I think you're hitting on this is visibility, right? And so like one of the things that I use. I don't want to plug any one tool specifically, but like Ramp has a feature where you can connect all of your different AI platforms and they're adding more and more platforms to that and you can see who, which API, which model, all that stuff, right? And so like I connected our cursor to that and then I saw that like we had one person that was just blowing up our cursor bill. I could have gone into Cursor and done it, but I had a nice easy Ramp. I'm in Ramp every day, right? And so I pop that up and I'm like, oh my gosh, this one person's doing it and they're using the most expensive model. And so I just went and said, hey, I can see this. I see it every day. I went and talked to the engineering manager, I said, let's have a chat with them. That's not telling. They can't use this model, but let's see if that they can use this model for one part of what they're doing. And the rest of the parts they're doing, they can use a cheaper model. I want you to know, cost cut in half just overnight just because we made a quick tweak, quick change. So it's like visibility is a huge part of this is I think you need to have that visibility. So you're not surprised. You can see these things on a daily basis. Most of them will let you see usage on a daily. You can API in, you can connect through other tools you might be already be using. But the best thing you can do is get it all in one place so you can look at it, you can see what's happening. Because ours constantly changes. One month that OpenAI will be the most expensive build, the next month Anthropic's the most expensive bill. And so I'm just myopically looking at Anthropic and saying, oh, it went down, we're good. I might be missing that. It didn't go down, it just moved over to OpenAI.

Speaker B: I'll say just a couple brief thoughts here, then we have a question and then I want to cover a little more and we'll wrap up. So, Chris, you nailed it on the whole governance thing. You have to have good governance. You have to recognize there's going to be shadow if you don't put those policies in place. People are going to doing whatever they want. They prior a little bit. We talk about bottoms down, top up. AI has been a lot of bottoms up. People are going to use it so if you don't get in front of it, it's going to be a problem. Tracking is huge. I was talking to a guy and I'm going to have him on a future episode. Just last night he had to develop the entire process of how they monitored it, allocated it, managed it for all of Instagram and threads that meta and it all sits in opex.

Speaker D: Chris.

Speaker B: So you can imagine the fun of a company like that, of managing it all. They don't put any of it in, in co hugs but so I'm excited for that conversation but everybody's struggling with it and so you know the advice I give is, is like you said, the more you can understand what's going on, you can have conversations because like anything there's probably an 80, 20, 20% of the people are driving, 80% of the cost. Start there but make sure you have a holistic picture. One model, one little thing isn't good enough and that's true of many expenses. But I think that's what I'll say on AI next.

Speaker A: Find your community, right? Like that's the other thing is like we uh, none of us know, we all have little pieces. Find your community, talk to them. Like finance. One thing I love about finance people is like we know so much about what's going on. We're so willing to talk to each other, be so open about it. Just, we just don't do it enough and we should be doing it.

Speaker B: Pick up the phone and talk to your someone at another company.

Speaker A: Find your community, find your, find your slack group, find your network, whatever it is. Like go find that place and just talk to people. Like I've learned so much through that.

Speaker D: Zach, you talked about, I'd be quick. Zach, you talked about a really great area and I don't want to discount that. It was really important, right? A lot of it. For these rising costs. We found the same thing with our client when we dealt with that. They just don't know how to actually use, use these tools. So it's like the prompting knowledge. It's like one thing that we did is like we talked them, we did a session and this isn't in our wheelhouse but this is being a partner. Then we had the office partner, we worked with the IT person, we had them just come do a one hour session to teach this organization how to effectively do prompts. Right? Because a lot of it is just like people don't know what they don't know and they're using the highest version of any one of these models. That's draining these tokens. And a lot of it starts with awareness of it. So it's not only just the governance policy, the sandbox to operate in, but it's also that way to take it a step further and teach people how to do it right, teach people how to leverage it. Here's where you need to use this. So you did that, and that's what led to that person saying, oh, I have more awareness. I shouldn't be using this. And then it's a direct driver. And Zach, what I love that you did. You didn't go to that person and say, we need to stop them from using this. You, like, help me understand, right? You came from a place of curiosity. Like, I just want to understand how you're doing this. Right. Seek first to understand in finance, then be understood. You crushed it, bro.

Speaker B: I'm going to switch gears here. So there's a question that was asked, and I'm going to send this to you, Glenn, and then we'll kind of wrap up with kind of one or two kind of hidden tips to just help with the budget process kind of as takeaways. So be thinking about that. So Julio here asked, he says, in terms of execution, and how do you strike the right balance between maintaining rigorous, you know, rigorous budget governance, preserving the agility to rapidly reallocate capital during market shifts or emerging opportunities? Right. So that balance of, uh, the budget is often obsolete by day one, and you need to shift.

Speaker C: Yeah. So, you know, you got to look at it two ways. So first of all, recognize that your budget is approved by your board of directors. So you and the business might be thinking, oh, this thing's obsolete. But the CFO was thinking, every single quarter I'm in front of the board, I am held accountable to that number. So you can't really get rid of that budget. You've got to still, you know, the CFO and the CEO still have to answer to it. But that's what forecasting is for. That's where you go over and you forecast throughout the year, and it's a balance between whether or not you're managing to the budget or the forecast. And I think a really great example is Covid, right. When you went over and you torn 29 at the end of 2019, you did your budget for 2020. Nobody had Covid in their budget. Right. And all of a sudden, by April, May, every time, if you're a retail shop, if you're, you know, if you're restaurant, if you're, you know, a service organization, that's interacting with people. You have a big office full of people that come in every single day. Your entire business model is shot. Going over and holding people accountable to that budget would be moronic. Right? And you got to recognize, hey, you know what, we're in a different environment now. You got to reforecast. And so what, really, what you need to do is understand, yes, there is a budget, and the budget has a role to play, and you still always have to be accountable to the board. But there are times when the forecast has greater value, and that's when you need to pivot. At other times, if you happen to be, you know, here you are in 2026 and you're working at, you know, Procter and Gamble, Chances are their budget's still going to be pretty good because Procter and Gamble could probably budget everything down to 1% because overall company revenues are probably going to be moving within a single digit number. And you could forecast it. It's not like you're one of Chris's clients. Where they're looking at anywhere from 30 to 70% revenue growth and where they land, that's going to drastically change what's going to happen throughout the year. So understand the company where you're at, the value that the budget still holds even if the company has changed or the environment has changed. But when to go over and apply that forecast and say, you know what, at this point in time, it makes more sense to apply, you know, measure people against a forecast because of these external events. One other thing I'll say about this is when I worked at a company and every single quarter we were doing reforecasts and they only wanted to hold people accountable to the forecast. And that was a horrible approach, in my opinion. It was a large public company because all that did is let people make mistakes in their forecast and then they got to reset every quarter and they didn't have to own those mistakes. And so you never got better at forecasting and you never had the accountability because everyone got to, every three months got to reset. So that's the value of sometimes having that budget. If you're more of a stable company and holding people accountable. So, uh, so, Julio, I hope that answered your question, because I think there's value on both sides and you just kind of have to evaluate where is there greater value to the company? Is it in the forecast or in the budget?

Speaker B: Great answer. Appreciate that. When you mentioned how everybody's budget, uh, blew up, one of my good friends, my training partner, he was corporate managing a toilet Paper company. His blew up the other way. Like, why don't we spend six months on this budget?

Speaker D: That was. That was fire, Paul. I love that. That was good. That was good, Paul. Uh, that was so good.

Speaker B: All right, well, I got to have a little fun here. And we're going to wrap up now. But first, we probably need a joke. Let's see. Since we talked about toilet paper and blow up, does anyone know why the spreadsheet was constipated? Chris?

Speaker D: Because it had too much formula?

Speaker B: No. Zach, any guesses?

Speaker A: I was going to say something about the formula spilled. And you're thinking that's probably off. Uh, I'm, um, not on the right track.

Speaker B: Well done, but no. Glenn.

Speaker C: My first thought was they ate lettuce at Taco Bell. But, you know, hey, Taco Bell is not the problem.

Speaker A: We help Taco Bell.

Speaker B: Yeah.

Speaker D: Taco Bell's clinch.

Speaker B: I figure it was appropriate for the session. Last thoughts. Wrap up. What's one key thing, more from an execution kind of hidden gem in the forecast process? Managing the calendar, whatever, that's really helped you in your career that you wish you would have known earlier. So kind of think about that one piece of advice you give that's really kind of helped you. Why don't we go. Zach, Chris, Glenn.

Speaker A: Be wrong more often. Um, it's more so be willing to be wrong because you're smart. I'm smart. I like to think that. Smart anyway. And I have these, like, preconceived ideas of, like, here's the best way to do this. Here's the best way to do that. But I find that when I just go in with this attitude of, I think Christy said about curiosity and humbleness and saying, like, I'm willing to change the way I do things if your way makes more sense and it's better, it just improves everything so much more. And I think in the era of AI as well, like, getting an idea to 80% now is so much easier and so much faster than it was two, three years ago. So why not experiment? Why not be wrong more often? Why not be open to that?

Speaker B: Great advice. One of the best lessons I learned when I was 20, someone said to me, I've never had a failure in my life. I've only had a learning experience, kind of similar idea. Be willing to be wrong. Be curious. Be willing to fail. It will help you along the way.

Speaker C: Chris, by the way, own the fact that you're wrong. Don't want to fear somebody else.

Speaker B: 100% accountability is key.

Speaker D: There you go. For me, Quick spectrum low. This is high time, energy, effort, resources low. Time, energy, effort, resources high. Budgeting should be here. Balance of the year forecasting, we call them boy. Forecasting should be here. Sit.

Speaker C: So I'm going to go a little more tactical. I'm going to throw out a concept that I know Chris heard me say a couple years ago, but still a lot of people don't use it, which is around vacancy. Understand that companies have turnover. If you have, let's say, a group that has 100 employees, but on average they only have 95 there because of turnover, don't give them a budget for 100 people. You're wasting company resources in that budget. It's being tied up in compensation for that department that's not going to be used. Understand that gap, how long it takes when somebody leaves to get that position refilled. If people have open positions, when do they actually hire? If they have a position scheduled to be, you know, they budgeted position for July 1. They don't open the wreck until June 30. They're not hiring somebody on July 1. You're going to be, you know, don't lock up that extra budget. I have been at companies where we have saved 20 to 30 million dollars in the budget process just by recognizing the turnover that's going to be there and not budgeting it. And that was money the company was able to use for new hires, other initiatives, the types of things. So you give the company a lot greater flexibility when you budget vacancy. The one thing I'll say is don't go nuts. Be very conservative because you don't want to overshoot and make the company spend more money. And now you've hurt earnings, but find the right balance.

Speaker B: Great one there. I, uh, will just share this real quick. When you're building your calendar, build in time. Don't give yourself no time to review things. Don't think, well, they have to get it to me by this day, and I'll get it to the person the next day. Build yourself some time knowing things will slip. And so just give yourself that flexibility throughout the process. All right, we're a little bit over, so we're going to wrap there. Thank you so much for joining us. Great conversation, everybody. Thanks. Glenn, Chris, Zach, appreciate it. Thank you, everyone.

Speaker D: Glenn, you're the man, Glenn. Glenn's the man.

Speaker B: Chris is Larry.

Speaker D: Yeah, you're Larry. I'm just here for a good time.

Speaker A: I'm just here for a good time.

Speaker C: Curlier mo in the situation, if Chris

Speaker D: is exact Drake, because he's here for a good time, not a long time.

Speaker B: Alrighty.

Speaker D: Uh, see you guys.

Speaker B: That's it for today's episode of FP&A Unlocked. If you enjoy FP&A Unlocked, please take a moment to leave a five star rating and review. It's the best way to support the FPA Guy and help more FPA professionals discover the show. Remember, you can earn CPE credit for this episode by visiting earmarkcpe.com, downloading the app, and completing the quiz. If you need continuing education credits for the FPAC certification, complete the quiz and reach out to me directly. Thanks for listening. I'm Paul Barnhurst, the FP and A Guy, and I'll see you next time. Time.