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

People talk about Excel being obsolete because of the new tools coming out. And it's the same thing when people talk about these tools being vibe-coded and people say SaaS is dead. I strongly disagree with that. I understand the tools well enough to know that you would never vibe-code an ERP. Anything that has highly sensitive data that you need to be 100% accurate, you're just not going to vibe-code it. Today's guests are Brock Byer, controller at Jump, And Natalia Kudanova, Senior Director Finance at Abby, here to discuss vibe coding in finance and why the future belongs to those who aren't afraid to experiment.

So how did you get started, Natalia? What's your journey?

First discovery was Code for Excel. I used it to automate part of our daily cash reporting process through Power Query. It felt to me like a breakthrough. I've never considered myself as a software engineer or developer, and now I've built Something that works, that actually resolves quite significant process issues.

We're seeing more and more solutions that will allow you to do a little bit more in a safer environment. At the same time, there's a limit, and we'll talk about that. 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 in Just one moment. Give it a minute here. Let's see. Anyone have a good joke while we're letting everybody get settled in?

I got one for you.

All right.

How do you introduce a hamburger? Meat patty. Well done.

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

What is 2 plus 2? 5. Yes. That shows you're an FP&A and you're a finance person. If you would have said 4, I'd have been like, Paul's an accountant, man. Like he's a CPA, dude. 2 plus 2 unequivocally equals 4. That's a true FP&A finance person right there, Paul.

No, I had a roommate that had a shirt said 2 2 5 for larger values of 2.

He was a total nerd.

So I always say 5. 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?

I don't know.

Seeking an approximate match. It's true.

Yeah, I was going the same lines. I was thinking, looking for an exact match or something like that.

Yeah.

Yeah.

Right.

I got rid of VLOOKUP years ago and I'm all XLOOKUP now. I couldn't even think of it.

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

Just wanted to, just a little self-plug out there, you know.

All right. Well, why don't we go ahead and get started and do introductions? We had 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 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?

Doing great, Paul. This is gonna be fun. I'm looking forward to it, doing it live.

No, I'm looking forward to it too. We don't get to do live very often, so So we'll look forward to your questions. All right. Well, so I have Glenn co-host here with me and I'll do a quick introduction of 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?

Yeah.

So why don't you take a minute and just tell us a little bit about yourself, Zach?

So as Paul said, I work for a company called Ask Elephant, which is here in Salt Lake City, Utah. We're a startup taking on kind of the revenue and conversation intelligence space. A little about me personally, you know, 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 finance and speaks it well. But I love just helping to run businesses, plugging in wherever the need is greatest and using my skillset that I've developed and growing up in the finance and FBA world as an operator just to make businesses better. On the more personal side, I have 4 kids, oldest is 7, youngest is about 5 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, really briefly.

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

Yeah. So I'm very excited. It has been, I'm thinking, Chris, about 2, 3 years since you and I were on a podcast together.

Yeah. It's been a minute.

We did a bunch. So my favorite guys to chat about 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 introduction.

Yeah, Glenn, you're always the man, bro. That's how we always end 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 $1 and about $50 million in revenue. And including me, I have 4 other fractional CFOs across the globe. We're gonna be based in the Americas, in London, and also Sydney. There's probably about 35 people at Fresh FP&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+ 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 3 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 Boozers as we 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.

So any of you, if you want to address Chris, you can just address him as LB or Larry Bird. Yeah, Larry Bird. Yep. Before I introduce the topic, we've had several people let us know where they're coming from. So just some of the locations: Rwanda, Huntington Beach, California, Brazil, see 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 executional 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?

It's changed a lot over my career, especially as I've moved down into smaller. But I think the way I would put it most 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 and what you need to do to execute and make that work. And so that's the simplest way I'd put it. 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 your belief about what the next 12 months looks like and how you're gonna make that happen.

Yeah, I kind of laughed when you said belief. Sometimes it's the wish of the leadership board, but that's another story. Everybody—

There are always elements of that, right? So you, uh, you got to play that game. You do.

Well, just locations. We had Brandon join us from planet Earth. So excited for that.

That's nice.

And we have someone from Washington. Chris, how would you answer that question?

I think budgeting, uh, for our clients is, it's a checklist and it's a false sense of confidence. Right. Um, you, we work with a lot of smaller SMB 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 at the SMB kind of space is really just that checklist of like, hey, here's directionally where 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 just played out. So, uh, for me, I think budgeting is for the SMB space, compliance checklist. Here's where we're gonna go. Um, and it's just a, 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 way we wanna directionally go. Forecasting, rolling forecasting is gold standard.

All right, Glenn.

I'm gonna take a, a little different view on this. And part of it is 'cause 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 2 different things. Number one, it's a guide. It's a guide for where the organization is telling each level, each business leader, 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's actually spending to make sure that they could hit their earnings goals. 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, from a financial perspective.

I really like that. And I think that's why I kind of hit on the believe thing is like when businesses inevitably start to deviate from their budget, which is going to happen, right? The biggest thing I ask people when they say like, hey, I want to do this, it's not part of the budget, is to say like, well, what changed, right? Like, why did you believe this was true 3 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 duty to preserve and try to follow that as best as possible.

And 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, Hey, this is where I might— I think my business is going to be, and you are not there. It's the board, executives, whoever it happens to be, could come back and 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.

Yeah. I mean, I think, right, you're seeing a little bit different opinions. You know, I think control, definitely bigger the company and just in general CEO, hey, is it in the 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, it's part, it's just part of that planning process. 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 $100 or something.

It was like millions of dollars.

A bunch of loss. 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 here. Like I got lucky.

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

I knew all the ins and outs.

I came in close in total, but I could see this business was off by like $300,000, but the other one was positive by $298,000, 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, you know, it's funny because the budget is not about right or wrong. It's not about did you hit your number or not. It's about the direction you're going and how you manage. And that's, that's really it.

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.

Yeah.

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.

Facts.

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

I, I like literally an example of that, man, having a client and it's like, we worked through the budgeting process with them and they was like, it's, it's, it's September and we gotta kick these things off. And I'm like, do you understand? We work in, 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 2, 3 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 publicly 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 as 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 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, this is a placeholder. This is where we want to go. But it also shouldn't be like, this, this is not the, 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.

Well, so I think there's a lot of value in some of these beyond budgeting and other ideas. The budget practice should really be about target setting, whether you do portfolio, 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, Bayer, their new CEO did away with the budget process altogether. He said it's the worst of corporate America. And he went to a quarterly, like planning sprints with 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 to where it needs to go and you're on the same page.

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 FP&A really doing, right? If you're a finance business partner, Your goals are to help the business achieve their strategic goals while staying within the budget constraints that the CFO is setting for the organization.

Yep.

And it's the combination of those 2 things. It's 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 FP&A is doing, is having that conversation to solve that problem. How do I get the business to do All of these great things, but keeping them within a cost perspective that the CFO wants or the board wants.

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

Yeah, absolutely. So, so obviously, you know, Chris has already kind of talked a little bit about the difference in, in his background from my background. And we, we love having this debate because I think there's insight into 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, it's a 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 together.

Right.

together in August so that you could roll out and figure out all your 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 8 months out of the year doing this thing. And in a few more months, I gotta go back to doing it again.

Right. Like Chutney.

Right. That's like the, that's like the hamster race, dude. That's like—

Right now, don't get me wrong. There is sometimes there's value in going through that.

Yeah.

But the thing is, you have to— you don't go through a process for the sake of doing a process. You've 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 a 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 over to Zach. I'm going to flip this over to you. Give, you know, your perspective on approaches to putting a budget together, timelines, you know, 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.

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 2 months I was there. Everybody was like, we do our monthly reporting and I'd say like, okay, sales was supposed to do this number and the CFO would go, what's the— oh, that's the finance number. Never mind. Yeah, it's fine, whatever. And then like we should move on. I'd be like, what? Like that's your number. He's like, no, that's the finance number. 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 forecast and the budget told you about your team? And we built the budget and 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 processes, 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 gonna have to explain it. I'm gonna tell 'em you missed or you beat, but you gotta 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 at all costs era. And so revenue and new revenue was what mattered most. And so I spent the Bulk of my time with the CRO talking about sales, right? And then I spent the next little bit talking about retention, and then the very, very tiny bit talking about OPEX 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 at all cost. Yeah, yeah. Money was free back then, so it was a fever 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 leaning in and saying, well, if I get input, here's how I'd actually like to do that.

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I like that. I mean, Zach, I think you hit on something 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 and having, you know, making sure you're talking and you're 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.

It was crazy just because, I mean, we just broke it down so simply, like, I remember sitting there and we said, well, let's look at like, what does this imply that each sales rep is gonna be able to close 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, right? And we need to change this because this is not telling the story that we want to go defend and tell to the CEO and say like, oh, our reps are gonna be 50% less productive than last year and we don't have a good defense for why. All right. And so, um, you know, I think when you get it 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.

Yeah, absolutely. Chris, what do you think? What's your take?

You know, I have a client portfolio of 6 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 4 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 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 the, the, that conversation, that alignment, that viewpoint, right before you even talk about a number is probably for me and what I find find is the most valuable aspect of that process. The, the budget, the forecast, the P&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 gonna spend a day and none of that outcome is gonna be, oh yeah, I'm gonna work on your plan, right? Like my FP&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.

Mm-hmm.

And you can say, hey, sales is feeling really good. Here's an opportunity that they have. Here's some opportunities we, 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 peo— and I failed in this, guys. I'm, I'm gonna raise my hand and say I failed in this, right? Both my hands. Paul raised his up, right?

I don't even know what you just said, but I know I, I failed.

I give up.

You bring up the word fail, I just raise both hands.

Drop in 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 look at the last 8 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, it's 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 6 portfolio clients where it's like, we're, I'm going 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 talk 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 pulse. That is so important.

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 gonna be any good. It's not an exercise in numbers. It's an exercise in understanding.

That's a gem. That's a fire, Paul. We should do a fire emoji on that one. That's a fire emoji.

I will keep that in mind. Well, it's an exercise in something. I'm kidding. All right. So I think we've had a good conversation all 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 get tight to 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, a 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.

For me, I think top-down, bottoms-up, driver-based, all those things, right? For me, it's very simple. Right? What are the 4 most important KPIs in that entire business? For us, what 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 Refresh FP&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 having ideas. Like, I know, I know Chris, he's gonna wanna talk about cash. He's gonna wanna talk about burn. He's gonna wanna talk about revenue growth. He's gonna wanna talk about profitability. So for me in that, I'd 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, realistically, 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 4 or 5 of those you have to be successful every quarter to do. It's unrealistic, right? So, um, for me, getting that practical side when we sit down with clients is like, you already know the things we're gonna talk about. So now let's align the business, the operations, the investments, the strategies we wanna 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, 'cause agility's in, we're working with, I'm working with SMB companies, right? $1 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 4 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 gonna help, this is gonna hurt our burn, but it's also gonna 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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You know, Chris, um, it's funny because again, I think you and I were gonna 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 a large company and Paul tied it back to it. I think it's a combination of both top down and bottom up. And the reason 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? Because you got to hit those earnings targets. And then it's, OK, now I have my bottom line and I have my top line. How do I back into those expenses? And then 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 you start filling it in. And so that's kind of FP&A before you go out to business units with, hey, here's your budget target or whatever. You gotta have that perspective. So you start top down with the revenue and then the CFO from the earnings, and then you gotta go bottoms up really on the spend side of the business and connect all the dots. So I think it's kind of that combination. Now, of course, if you're somewhere between that large enterprise and that small business, you're probably gonna land somewhere in between that too. And my guess is, Zach, you're— that's probably where you're going to be sitting.

Yeah. Yeah.

I mean, I'm going to share a thought before you go, Zach, real quick, if I can. So I think, you know what, I think I was going to say, I did an interview with a guest and I really liked the way he thought of this. 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 traveler's checks, then all that mattered was reducing expenses. What do we have on the balance sheet that nobody's encashed 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.

Listen, I don't think I'm gonna add massively anything new to what anybody said here, right? It's all true. And where you land is a combination of what you're comfortable with, what business is comfortable with, what works for the business, right? You know, one of the fun things that I've done recently is 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. Let's put the full— 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. We are out of business in 3 months. All right.

Yes.

And see, any questions? 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. 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 wanna do that. It's just really like, you gotta know your people. You gotta know what drives them, right? It's, 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 wanna pay out for a specific deal, right? And you then know a behavior and an outcome that you wanna 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— 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 to that outcome.

I like that. I like the way you said it there. I think that makes a Makes a lot of sense. And we'll let everybody 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've talked a little bit about method and, you know, more than the approaches, 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.

Yes.

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.

Yeah.

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 it 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.

And it's a combination of both.

I agree. I mean, and it's, you know, 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 in this team or, you know, whatever it is. So now you got to say, well, where's the trade-offs going to be, right? You want to, maybe you shouldn't go over and do that team offsite 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 gonna 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 gotta go over and make sure that you stay within that constraint that finance puts on you, which is that budget. But you gotta say, all right, here's how I'm gonna achieve those goals. And it's that trade-off, that connection with the business.

That's exactly right. I mean, like finance has this bad rap of being the people that say no. Well, because we're typically the people that have to say no. 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 you are trying to make that, you know, not just say no, you're trying to say like, what are you trying to accomplish? What are your goals? 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 5 heads, And we end up only hiring 4, I might be able to use that 5th 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.

And in fact, Ash, and the thing is, 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 up there. And I always like to say that, you know, if you go over and 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 FP&A nirvana part where it's like they think of FP&A as part of their business and they trust you as your, you know, that trusted advisor. 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'm like, that's it. I'm like, I'm done. I can't go any further because that's where you want to be. 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 goals.

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 FK&A 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&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 FP&A 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.

Absolutely. In fact, the one thing I would caution you on, and I've, I had a, I had a senior VP I rolled up to who warned me. He said, he's 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 that.

If I add to that too, right? Like, 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—

I like it.

Yeah. I mean, I, I like, literally, I created this 5 years ago and I was like, what? Like, what? I wasn't just great at financial planning analysis. I'm like, and honestly, Like if we're being 100, like cards are out on the table, technology should be doing your financial planning analysis, right? The true value add and 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, nah, Chris is our finance partner and advisor. Like that's exactly what you wanna 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 Chris does, you know, Chris's team and deep— no, financial partner and advisor first. Then the outcome is gonna 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 giving my finance, right? The financial planning analysis. And I give the business the financial partnership and advisement. 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, 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 that into productivity. I 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. And it just, it, it, it, it's a mind, it's less of a skillset thing, right? Right? Like, it's more of like, how do you approach that conversation and be like, I wanna be this sales, this marketing, this operations. For me, I wanna be that CEO, owner, or founder, right? I wanna be their financial partner and 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.

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.

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 and. Like, this way doesn't work, but here are the opportunities. You need to make—

here's what has to be true.

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 get a bite. So let's keep it a little more tactical. How do you think about forecasting this area? Any advice you'd offer people? Because, right, it's new.

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, I mean, best we got is, you know, F it, just, just go. And he's like, all right, well, F 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. Um, I 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.

Poof.

Right? So like, we're all figuring this out. Um, and it's crazy because like, experience we had here is like, our margins were not where they needed to be. I started pushing the team on, on margins and costs and what, 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're cutting Luna prices by 80%. And I was like, oh, 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 gonna 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, it's, it's, When we talk about a changing market, a changing environment, AI is changing every week, every day, every month. It's just constantly different.

Yeah. So basically throw darts at the wall.

Yeah. With your eyes closed.

You might have bullseye.

You don't know.

Or ask Gemini where to throw the dart. It's like, Gemini, where should I throw this dart? And you ask Gemini and they'll be like, that's a great idea, Chris. I'm on board to help you do this. Right?

I like where you're going.

No, but like the AI piece of it, we had a client, 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 get 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 3 months, that element, 10, 15x. And I was like, something's wrong here. Right. And what we found out was this shadow IT is, 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. 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 the CEO to say, we need to set governance and guardrails. We need to set the sandbox that people can operate in, right? And like, A lot of it was just people were using Claude tokens that had no— they're using Claude, they're using the highest algorithm and version of it, and 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 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 cloud. 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, 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 sitting in 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.

I think the other thing too is like, it's just that 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 popped 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. And wouldn't you know, costs cut in half just overnight, just because we made a quick tweak, quick change. So visibility is a huge part of this. 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 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, you know, ours constantly changes. One month OpenAI will be the most expensive bill, the next month Anthropic's the most expensive bill. And so if 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.

I'll say just a couple brief thoughts here. Then we have a question and then 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 gonna be shadow. If you don't put those policies in place, people are gonna be doing whatever they want. They probably are a little bit. We talk about bottoms down, top up. AI's been a lot of bottoms up. People are gonna use it. So if you don't get in front of it, it's gonna be a problem. Tracking is huge. I was talking to a guy and I'm gonna 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 at Meta. And it all sits in OpEx, Chris. So you can imagine the fun of a company like that of managing it all. They don't put any of it in COGS. 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.

Yeah.

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.

And find your community, right? Like, that's the other thing is like, we, 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. We just, we just don't do it enough and we should be doing it more.

Pick up the phone and talk to your, someone at another company.

Find your community, 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.

Zach, you talked about, I'll 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 taught them, we did a session and this isn't in our wheelhouse, but this is, you know, being a partner to them. We had the office partner we worked with, the IT person, we had them just come do a 1-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. It's like, I just wanna understand how you're doing this, right? Seek first to understand in finance, then be understood. You crushed it, bro.

I'm gonna switch gears here. So there's a question that was asked, and I'm gonna 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, How do you strike the right balance between maintaining rigorous budget governance and preserving the agility to rapidly reallocate capital during market shifts or emerging opportunities? Right? So that balance of the budget is often obsolete by day 1 and you need to shift.

Yeah. So, you know, you gotta look at it 2 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 where 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 gotta 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 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, everything— I mean, if you're a retail shop, if you're, you know, if you're a 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.

Facts.

Going over and holding people accountable to that budget would be moronic. Right? And you gotta recognize, hey, you know what? We're in a different environment now. You gotta 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 Gamble. Chances are their budget's still going to be pretty good because Procter 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 their 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 3 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, 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?

Great answer. Appreciate that. When you mentioned how everybody's budget blew up, one of my good friends, my training partner, he was corporate managing a toilet paper company. His blew up the other way. He's like, why did we spend 6 months on this budget?

Oh, that was fire, Paul. I love that. That was good. That was good, Paul. That was so good.

You like that? All right. Well, I got to have a little fun here. And we're gonna 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?

Because it had too much formula.

No. Zach, any guesses?

I was gonna say something about the formula spilled, and you're thinking that's probably off the— I'm not on the right track.

Well done, but no. Glenn?

My first thought was they ate lettuce at Taco Bell, but You know, hey, Taco Bell is not the problem. We love Taco Bell.

Yeah, Taco Bell's clutch.

I figured it was appropriate for the session. All right, how about we get to the last thoughts wrap-up? Because I want— 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.

Be wrong more often. I mean, 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 Christie 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 is 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 2, 3 years ago. So why not experiment? Why not be wrong more often? Why not be open to that?

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.

Chris, hey, by the way, own the fact that you were wrong. Don't point a finger at somebody else.

100%. Accountability is key. 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 'em BOE forecasting, should be here. That's it.

So I'm gonna go a little more tactical. I'm gonna 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 1st. They don't open the rec until June 30th. They're not hiring somebody on July 1st. 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 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 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.

Great one there. I 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.

Glenn, you're the man, Glenn. Glenn's the man.

Chris is Larry.

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

I'm just here for a good time.

Curly or Moe in this situation if Chris is—

Zach's Drake because he's here for a good time, not a long time.

All righty, see you guys.

Peace.

That's it for today's episode of FP&A Unlocked. If you enjoy FP&A Unlocked, please take a moment to leave a 5-star rating and review. It's the best way to support the FP&A Guy and help more FP&A And we'd love to hear how you heard about the show and how you'd like to help other FP&A 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&A Guy, and I'll see you next time. Thank See you. you next time.