Why FP&A Professionals Are Struggling In The Age Of Al - Insights from Philip Watson

The hard skills will change going forward in the future. Some of the gen AI stuff, some of the machine learning stuff will probably take care of some of the grunt kind of modeling cab now and it will automate some of that. I don't think it will replace that. It will change their job. Maybe they need to be a bit more data science focused or at least know how to code lightly. I think it will be more technical in some senses and so that will require a different skill set of still being able to do the soft skills with knowing some of the harder, higher level technical skills as well. I think it's the ability to just understand the business. I think that's actually the most important because as an FPA person, you're actually in the business all day, every day. Helping to translate between accounting in the business, helping to think about the future, helping to explain the past and understanding the actions. Understanding how the actions anybody in the business takes impacts everybody else in the business. So you can go model that and help predict that. If you could try to make something easier for somebody else. Like that's always going to go a really long way for you.

Curious. What was the hardest part coming into the role? What was the most challenging for you?

It was managing the.

This week's title sponsor is Plan Buddies, the number one planning community for planning professionals. Check it out@plan buddies.com and join me in the community today. Hello everyone. Welcome to FP&A tomorrow. I am your host Paul Barnhurst, the FP and A guy, and this show is where we delve into the world of financial planning and analysis, examining its current state and future prospects. Each week we're joined by thought leaders, industry experts and practitioners who share their insights and experiences, helping us navigate today's complexities and tomorrow's uncertainties. Whether you're a seasoned professional or just getting started in your FP and A journey, this show has something for everyone this week. I'm thrilled to welcome Philip Watson to the show. Philip, welcome to the show.

Oh, thank you so much for having me. Happy to be here. Very excited.

Yeah, really excited to have you. So we like to start off this question with everybody. What does great FP and A look like in your mind?

Good question. I think great FP&A looks like the ability to communicate with multiple stakeholders in all aspects of the business. I think it looks like being very operational in both one's practicing and in one's outlook. I think the finance skills one has to have to be a great FBA person are table stakes quite frankly. So that's why I didn't even put that first. I think it's the ability to just understand the business. I think that's actually the most important because as an FPA person, you're not just, you know, running models in a spreadsheet. Hopefully, if you're running a good FPA team or if you're on the FPA team, you're actually in the business all day, every day, helping to translate between accounting in the business, helping to think about the future, helping to explain the past, understanding how the actions anybody in the business takes impacts everybody else in the business. So you can go model that and help predict that, help forecast that. That's what I think. Great, great FPA looks like.

Thank you. I. I appreciate that answer. And I like how you said, you know, hey, the finance stuff is table stakes. Great FP and A goes far beyond that. It really gets to knowing the business and managing stakeholders and relationships.

Yep.

I'm, I'm curious as you look to the future, right. Last couple years we've seen AI a ton of changes in businesses. With COVID all the acceleration, different things going on. How do you see FPA changing over the next few years as we continue to see all these changes in the world?

Yeah, my sense is, even though we just talked about how important some of the soft skills are, and I'm sure we'll touch on that throughout this conversation, the soft skills are always going to be important, that communication aspect. But my sense is, is that the hard skills will change going forward in the future. The, as you mentioned, some of the gen AI stuff, some of the machine learning stuff will probably take care of some of the grunt kind of modeling grunt grinding through Excel that we have now. And it will automate some of that. It won't replace, I don't think it will replace FNA people. It will change their job. Maybe they need to be a bit more data science focused or at least know how to code lightly. Right. As opposed to now where maybe you don't know. I have to. You don't have to know how to code. So I think it will be more technical in some senses. And so that will require a different skill set of still being able to do the soft skills but knowing some of the harder, higher level technical skills as well.

Thank you for sharing. Appreciate that. Can you go ahead and tell our audience a little bit about yourself and your background? I know you're coming to us from London CFO at Paddle, but just walk us through your background and how you got where you're at. Today, yeah.

So as you said, I'm the CFO of PADDLE here in London. I've been CFO for seven months. It is my first CFO job, first time in fintech as well. So I'm drinking from two fire hoses, it feels like every day. But my career has been an FPA ever since I graduated from business school at the University of Texas. So after undergrad, I did investment banking for a few years and then went to graduate school. When I graduated from grad school, I entered a finance rotation program at a company called BMC Software in Houston. So that was my introduction to fpa and it was my introduction into enterprise software, and I've been in that space ever since. So I spent a few years at BMC Software, kind of rising up the ranks, then got asked to move over to a company I never heard of up in the Portland, Oregon area in Vancouver, Washington, called DiscoverOrg at the time. DiscoverOrg eventually became a company called ZoomInfo that went public in 2020. But I was hired to be FPA employee number one, Paul. So I started the team, we were about 38 million of ARR back in October of 2015, and built up a team that eventually ended up in double digits just on the FPA side, where I think we did 13 acquisitions, we went public, we did debt deals, we did equity deals and all kind of stuff, and just helped the business grow from 38 million of ERR to 1.1 billion. Whenever I left in February of 2023.

That must have been quite the ride to go from employee number one to over 10 people on the team. All those acquisitions, I'm guessing, came in very, very early. Series A, Series B, whatever it might have been, all the way to public.

Yeah, yeah, it was. It was a great masterclass. And how to not just run FPA or be involved in fpa, but to be involved in a growth company at scale, in a profitable growth company. So we did all that at, you know, very profitable margins. So it wasn't like we were just in the boom times burning cash like perhaps some other company. So it was really a great way to learn how to operate a business. I think of all of the things I take away from my time at ZoomInfo, and there are innumerable things I can take away, but it is how to operate at a high level, how to operate with rigor every day, how to think, be flexible, and change a process on the fly if you have to. Because when you're growing that quickly, there are things that pop up. You need to Be nimble. But just remember that the way you advance the ball is not massive steps, it is little bits. Every day that you were, you were creating a new process for that process can scale and you're just rigorous about it. And it. There is no substitute for hard work and there's no substitute for kind of being very operational when you're trying to build a company. Paul.

And I'm curious, that just leads to a question there. How do you put that rigor in place to be operational? I get the hard work. I think everybody understands what required there. It's an effort thing. Talk maybe a little bit about how, how you put rigor around those operational processes and really make sure things are able to scale.

Yeah, I think it starts with, it starts with the tone at the top, like, hey, we are going to measure things. We are going to measure them on a regular basis and we're not just going to measure them with, here's a number. But we expect everybody in the business to be able to comment on those measures too. So what it forces people to do is to know their business. It forces people to understand the connections between their business and other parts of the business. And it forces everybody to think about if these are the things we're trying to optimize for every day, how am I getting up and optimizing them? Right. So that's the rigor. That's rigor. It's repetition, it's measurement. And it's a unified knowledge that if we improve the metrics, that will improve the business. And that's done not just via guess, but it's done via proof. Right. So it kind of comes back in a circle like that. That's what I think about when I think of that question.

I really like to explain that the repetition, the rigor, the measurement and then that improvement. People understanding how that measurement happens go ahead and making those changes and remeasuring, just kind of following that process religiously as you continue to scale to make sure things don't slip through the cracks, which can easily do when you're growing rapidly.

Yeah. And then just add that process to, you know, every kind of new thing that comes. And again, it's not monolithic. You can't, you know, squeeze the square pegs and around holes. But, but you can measure a lot of things. You can set the, you can set the cadence that you want certain levels of improvement on many, many things as long as you're flexible about kind of some of those definitions. The idea is just keep driving every day by making Incremental improvement. What Henry Schuck, who is the CEO, who is the CEO and co founder of Zoom Info, and a friend of mine used to say is, we're just going for 1% better every day. Do that. It will compound. Right. And like, that was the attitude. That is the attitude. That's the rigor and repetition. Yeah.

It's the whole idea of atomic Habits, the book there, that 1% improvement. It's amazing how much of a difference that makes if you really try to live that. Just those little increments, because rarely can we do it all at once.

For sure. Yeah. And it's like it's. You wouldn't try to bite off more than you can chew. It's. It's intimidating mentally. It kind of makes you procrastinate a little bit and it's just, quite frankly, hard. It's. It's way easier to take small pieces and if you stick with it, there are certainly benefits there.

Yeah, yeah. I definitely have to remind myself of that sometime. If you get going, you try to do it all at once. You're like, maybe I should slow this down a little.

Yeah, it's human nature. We all do that, I think.

I think so. So tell our audience a little bit about Paddle. For those who may not be familiar, you know, what does PADDLE do? What industry are they in?

Yeah. So paddle's a fintech company based here in London, and we stand in between sellers and buyers of digital goods around the world. So, Paul, think about if you created a digital widget company, let's call it an Excel plugin, that you were like, this is the best thing since sl. Everybody's going to love it. And you go set up your website real quick on Wix or GoDaddy to start selling, and it takes off. If you're selling purely in the States, you're generally fine. You can go get one of the sales tax companies and they'll calculate your sales taxes and things for you. You can go file those returns and you'll be generally good. But if your product really takes off and you're selling to South Africa and the UK and Germany and England and Ukraine and wherever else, if you're doing really well, eventually you're going to need to take payments from all those countries. You're going to need to do Ky Kyb on your buyers, maybe KYC as well. You're going to need to handle subscriptions and billing and you're going to need to pay the taxes and file and remit. The VAT taxes are in all of those Countries and so what Paddle does it does all of that. Somebody goes to checkout on your, on your website for your product. Paddle will pop up in an, in an iframe or inline. They'll check out through Paddle on their various whatever way they want to check out card, you know, PayPal. Anyway, like that we'll collect the money, we'll handle the Forex and we'll also satisfy the tax liability for you so we will legally take on the tax liability for you so that you actually don't have any liability around the world for taxes and you can concentrate on selling your product, developing your product. So it is like some people would use, say hey, why can't we use Stripe for that? You can except Stripe doesn't do the tax piece. So we can like sit on top and do the tax piece for, for small businesses that just don't have that knowledge, don't have that expertise in housing. Want to do business around the world?

Sure, yeah. No, the tax thing is a real challenge. I understand the sales tax. It's amazing how different it is in every country. Here it's 60,000. Here, it's 30,000. Here is from $0. I made $500. You really expect me to file taxes in your country? You know how it could be so different all over the world. So I can imagine a lot of work to manage that. Nice to be able to offshore that so to speak to somebody else, outsource it and let them manage it.

Yeah, it's kind of the whole back end for your digital business. If you need to collect the revenue for you, does the Forex and handles the tax, you're just going to go focus on developing and selling your product.

Yeah, I have a friend who is using it for his business.

Oh, that's great.

Said he went to Paddle. So this has been your first full time CFO job. Talk us through what the experience has been like. Is it what you expected? You know, quite different. Just give us an overview of the journey.

Yeah, it's been good. I am, I'm having a great time. I am enjoying it. It, you know, obviously it goes without saying there's a ton of responsibility, ton, a ton of pressure on you. But, but it is fun to be able to come in and shape the future of a company like this. So Paddles in certainly in growth stages. We are not a startup, we are a scale up as we say. But I did have the opportunity because there was no CFO here for about two years before I started to kind of come in and put my own Stamp on the. Been really fun. And it's not just fun to say like, hey, me and my team went and did new things. What's really fun is taking the people who were here who maybe weren't quite sure or kind of, you know, didn't have the leadership that they needed and helping them grow, helping Paddle grow with them and like seeing them blossom and bloom now because there's a bit more rigor, a bit more structure, a bit better strategy put in place. So I think that that's like been maybe the most fun part of this whole journey so far is like getting these people up to their potential, where they always had it, but it wasn't kind of being taken advantage of. So that's been a tremendous amount of fun. The other great thing I like about my job is that we sell to CFOs, we sell to the finance suite, right, because it's kind of a back office revenue and finance product. So I get to go out and be part of the product discussions. I get to go out on the sales side and go talk to customers. I get to. I've even handled kind of inbound customer support requests sometimes before people are really want to get to the top. So I've been having a great time at it. I've learned a tremendous amount, particularly around tax. You know, when you're coming up in the FDA world, you don't necessarily deal with a lot of tax items. I've learned more about tax in the past seven months than I have in the previous whole time of my career. So it's, it's been good, it's been a really good experience and I'm super thankful to Jimmy, my boss and the paddle board for giving me the opportunity.

Great, thanks for sharing. Curious. What was the hardest part coming into the role? What was the most challenging for you?

It was managing the change management. So coming in literally on my third day there, we had the monthly finance all hands and I didn't have a lot to say at that time. I was still kind of learning who was who and what was what. You know, you have all these people have 30, 40 people staring at you, looking for something, you know, what words of wisdom or guidance. And in having to kind of just navigate the change because they had been through a lot of change too. They've been through multiple leaders before. I was the first cfo many of them had seen. They'd been through multiple other executives that paddle. So it was rallying them around the fact that like, hey, you know, yes, I'm new, but we're here to go do this together. Right. And rally them around. My idea of, like, we're here to build. We're here to build infrastructure and we're going to get that snowball going. And yes, it's going to be hard, but we're not grinding you down to grind you down. I'm not working you to work you. I'm not trying to work you out of a job. What I am trying to do is elevate our game and get us to a place where I know we can be, and we do. That's going to require a lot of work upfront so that we can start getting the benefits in the back. I think of things like accelerating bringing netsuite live or do, you know, other items like that where, yes, a lot of work, but we see the benefits now months later. And so it's kind of getting people to buy into that vision is just. Is just hard. And, you know, I also had some people leave, some people that just decided they didn't want to be part of that journey and. And they just kind of walked out essentially. And, you know, kind of dealing with that fallout on short notice was also hard to deal with. But we made it through and we were a stronger team for it. Now.

Thank you for sharing that and can totally understand that. Change management can be a real challenge. I mean, helping people come along for the journey and getting them all on board and on the same page, especially if they've been through a lot of bosses, a lot of managers, different roles, lots of change. You're going to have some people that are burned out, and like you said, you're going to get some that are like, I just don't want to be part of it.

I've done, yeah. Want to be in a different boat. I want to go a different direction. Okay. Yeah.

And so you just, you have to manage that and you want them to be happy. So it's. It's a good thing. You don't want people to be there that don't want to be there. But it's hard to manage it in the short term.

It's hard in the moment. You know, like, literally I had two people on an FPA team. They both left within a few weeks of each other. So at one point I was kind of without an FP and a team. So, you know, kind of dealing with things like that. But that's, you know, this is what you get paid to do. That's. That's management. So I'm very fortunate that I had planned ahead and had Brought a person over that I knew that used to do FPA for me and made him head of FP&A. And you know, he came in and really saved the day there. So yeah, so you just gotta, gotta roll the punches sometimes, you know, is.

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I think it goes back to the very first thing we talked about, which is knowledge of the business. So I'm very, very, very fortunate in my career. I've always been able to go talk to other people in the business, probably because I just have an innate curiosity about the business. I'm less of like a hardcore finance person. I'm much more of like, I want to know how the business works. I want to see the connections between the teams. I want to know how we get revenue and how the revenue flows through. So having that natural curiosity helped me both as an FPA person and as a, as a cfo. But I really think FPA is probably the best launch pad into being a cfo. You get exposure to all the business leaders, you get exposure to all other aspects. It forces you to think ahead and not behind, right? So if you're a good FP and a team, you are always thinking about your forecast. You're thinking about, if this happens, what does this mean to my financials? Just today, but tomorrow, next quarter, next year. And I think that's the right mentality for a cfo. You want to be, you want to have your house in order, you want to have your infrastructure built so that finance is not a hindrance and the finance is actually a help to the rest of the business that the business can build on top of your Your base, then you want to be out in the business helping them think through commercial. Commercial items, right? No. Should we structure a contract this way or do we need to make an investment that way? Or hey, this partnership opportunity is coming through. How should we think about this? Is this better than buying or building? So there are innumerable amounts of questions that I think a CFO or a good finance team can help a business think through or provide advice on. And I think, you know, I think FPA is probably the best training ground for that mindset.

I would agree with you. I know in, you know, one of the roles I have, I think back where we worked on two large contracts, two of our largest customers for renewal and going through, okay, where do we raise price? What do we do if we try this, you know, salespeople coming and going, well, they want to do this. Can you run it and say what this looks like? I can look at it, but it's a bad idea. Like, yeah, we know, but we need the numbers and work through it going, yeah, it just doesn't make sense. And at the end, seeing these contracts have better margins are putting us in a better financial position. You really get those opportunities at FP&A, if you get involved with the business or on product, to really have discussions across all the different businesses and see how that all comes together to different departments. So I'm, I'm totally with you. I think it's a great proving ground for a CFO. And I think, you know, many FPA people are often like mini CFOs or divisional CFOs overseeing parts of the business, working with those leaders. And in a good company, they're seen as kind of that right hand person for sure. They want to be there for the decisions. The worst is to be in that role where they just want you to run the numbers and leave me alone.

Yeah, yeah, that's so that's, that's the worst. I, I know I, I always, I always asked to be in a meeting, right. I think, you know, the worst I could hear was no. And then I always encourage anybody that I've ever hired for FP&A, or that or my leadership now is, you know, your job is not to sit in the back and run numbers. Your job is to go translate numbers, to go communicate to the business and be out in with the business, in the meetings, in the room. It's important to be in the room, support for your career and it's important for your function. So I very much try to impress upon that team that Concept.

That's great. I'm glad you're doing that. I wish everybody in FP and A would do that. I think it's huge and I think we're starting to see more and more of that change. More and more of a recognition that FP&A is front office. It's not a back office role. Yes. Are there times you're going to be in a spreadsheet? Of course. Times you're going to be dealing with numbers. But numbers are just the way we help guide the business. We look at things, we bring that financial lens.

Yeah.

Versus that's what we're doing.

Yeah. I think if you're a leader in any part of a business, like if you have, you know, some analytical horsepower sitting next to you to help you think through various problems like that, that's. Why would you not want that, you know?

Yep. Agreed. So, yeah, we talked a little bit about Zoom info earlier and I know you mentioned you were there for eight years. Maybe if you could share just a little bit more of what that scaling process was like at the different phases. Maybe talk a little bit about that. Sure.

So in the beginning, like I said, I came in as a single employee, employee number, FPA employee number one there. And did that help build out kind of the basics. So help build out the very first dashboards around the sales funnel. Help build out the first customer segmentation, help build out the first retention analyses. And not just like build a dashboard and say, here it is, but go explain it to the business. Go communicate to the business. Go help them optimize for certain areas. Go show them interesting analyses that they hadn't thought about before. And then very quickly, which was a great thing for me, like, not only did the business love that level of insight, but the C suite love that level of insight. So I was getting a message directly from Henry, like, show me this, show me that. Let's talk about this. Come to my office. Come join the. Come join the exact meetings. Be a part of the exact team. Right. Because you're providing all this insight. So that was. That was really awesome for me, really great for my career. But it also meant that it had to come bring in some people underneath me because there was such demand for our services. So I think that's the thing that made me feel really great, like people wanted more analysis. Right. If you're in that spot, then you know you're doing it well. I think so. I know I hired two analysts, one of them directly out of college. That's the guy that works for Me now that runs FPA here. So I literally have, you know, been, he's been with me since the very beginning of his career. It's been great to watch him, to watch him grow. I think the way to talk about this is in the first three or four years, which corresponded with my first cfo, Zoom Info. FPA was really finance for the business, I would say. So we're very involved in the business with the dashboards. Very involved, operationally very involved building funnels and helping people interpret that. Very involved in the business like that. And you know, that, that was great. That was a lot of fun. Then as we changed out CFOs and started thinking about doing bigger things that is potentially going public, our role shifted and it became more about what I call finance for finance. So yes, we still stayed in the business, but we also got really deep into the P and L, really deep into balance sheet, really deep into cash flow forecasting. Right. So things that were a little bit more technical, a bit more financing in nature, but that's what the business needed at the time. And what it meant though, Paul, was I built up a team of people that could do operational in the business and do financial and speak both those languages. And you know, I think those, those are really great skills to have. So we continue building the team. Our method was to hire people right out of college and then train them in kind of the zoom Info way. And we did that super successfully and we built up a really good team that like that won awards, that was respected across the company and you know, was there in all of the aspects of all of the M and A deals we did, the capital raises, the day to day operations and ultimately the ipo. And it's a thing I'm really proud of actually.

Yeah, I can tell that as you've been talking. One thing I've noticed, I could tell you're really proud of is developing people, watching people grow. You tell the story of the guy came out of college, he's with you today. What's your favorite part or maybe a story you can share of just watching people develop? What is it you love about it? What's maybe a favorite experience you've had as you've helped develop people over your career?

Yeah, I mean my favorite experiences are watching like people on my team win awards that I did not make them for. I didn't vote for anything, but it literally came from the business. So, you know, I've had multiple members of my team as you go win the CEO award, which comes directly from the CEO and his directs and you know, they get to vote on that made me happy. But one other cool experience I had was I hired a person as an analyst. He was like my second hire at Zoom Info. And he ultimately got asked by the COO and President of business to go be his chief of staff and go run, go create his analytics department on the go to market side. So it's basically not just was I developing people or we developing people inside of fpa, but we had alumni essentially out of FP and a into the business and that just helped us become a better global team. Right. Because we had those levels of communication because they knew how we thought, we knew how they thought. And we were always tight like this with, with that group of people which was so helpful as we were, you know, growing in modeling and doing all sorts of things that were required to get where we needed to be. So I think that's a good story. It's something I'm proud of is not just do we develop them in fpa, but we were able to spin people out and have them go start other teams and be well respected across the company. So yeah, you, you know, listen, people development is, is important to me. I like teaching a theme, right, because we had those levels of communication because they knew how we thought, we knew how they thought. And we were always tight like this with, with that group of people which was so helpful as we were, you know, growing in modeling and doing all sorts of things that were required to, to get where we needed to be. So I think that's a good story. It's something I'm proud of is not just think it's fun and it's just, it feels like, it feels like that's like the best reflection of if you. We develop them in fpa. But we were able to spin people out and have them go start other teams and be well respected across, across the company. So yeah, you know, listen, people development is important to me. I like teaching I a good person at what you do. It's like can you get other people to go do it as well too? I think it's fun and it's just, it feels like it, it feels like that's like the best reflection of if you're a good person at what you do. It's like can you get other people to go do it as well too?

Agree. And there's nothing at least to me as satisfying as seeing somebody develop and grow because of the way you've helped them or taught them or being even just a small part of it. Often you'll see people, you know, they'd be successful whether you were there or not, but it's always nice to be able to help them along that journey.

Totally. Yeah. I. I ultimately, I like helping people. I think it's, you know, it's. It's what I like to do. I'm a doer like that, so. Yeah.

Great. Well, thank you for sharing that. I want to switch subjects here a little bit. You know, a subject that comes up a lot in FPA is sales commission. Now, there's the calculation part. There's building the plans. This whole process, it was a CFO and someone who's been in FP and a. I know in prior roles, you've kind of owned sales commissions. How do you think about it and kind of. How do you think about that process as far as alignment across the business?

Yeah. So a little bit of history, when I got to zoom in for, there really was nobody kind of doing the sales comp side. So it kind of fell to me in FP and a. And I knew nothing about sales comp, quite frankly. So I learned. And that learning wasn't just running the model, as they say, but I also helped draft plans. I helped talk about the strategy. I'll think about, what is it that we want to comp on? How much should we comp? And I ran that team off and on. It kind of. It had. It went away. It came back to me for five of the seven or eight years I was there, so was pretty involved in that process. You know, why is it important to be connected? Because sales comp is a massive driver. I mean, conversation obviously is a massive driver of behavior. Right. That's human nature. Sales comp is a mass, therefore, a massive driver of the revenue behavior. And I say revenue behavior specifically because there is revenue you want and there is revenue yes, you'll take, but it is probably like less. Less good revenue in a sense. Right. Hey, did we do a bad deal here? Things like that. So it's important to be aligned because you want to make sure that the incentives are correct for what the rest of the business is trying to do. You want to make sure, obviously, that those incentives fit in the plans. And also, I think, as most people are aware, sales comp can be pretty variable because it's really hard to model. And so you want to make sure that if, you know, you get a great revenue performance, did that really blow a hole in your. In your budget? Like, hopefully not right on the expense side, but you don't want to create a plan like that. So I think the alignment is important for all those reasons, but mainly because the incentives are so strong and so important and you want to, you want to know what the people who are driving revenue are incented to do. And that way you can kind of trace it through and make sure the rest of the business is prepared to support that.

I fully agree. Having been in a similar situation to you and having written sales plans and I really like how Guy put it by name of Jaren Paul. He owns, he owns Spiff, which was just bought by Salesforce.

Yeah.

And he said the way to think of it is your commission plan is the game plan for your sales team. You know, you think of a football team or whatever, they have that game plan and they're going to follow that game plan and they're going to figure out how to exploit it. Just like sports team, you figure out how to exploit the defense or the offense.

Yep.

You got to make sure you design it in such a way that they're exploiting it in a way that benefits the business versus just benefits them. Because there's nothing wrong with them taking advantage of the plan. If you designed it poorly, that's on the business. And I've seen that where like why are we paying these type of money? This makes no sense here. And you go have to go in and correct it. And that's never a fun conversation with salespeople because it's always they view it as you're taking money away from me. Never a fun conversation with salespeople because it's always they view it as you're taking money away from me. Regardless of what you do with the plan.

Yeah, the salespeople, I mean, I love them. I was out with them last night. They're a ton of fun. They are certainly different minded than your average finance person. I think we'll just say.

Yeah, I, I would agree with that. I don't know if you know who Steve, Steve Young is. The football player. Yeah, I heard him speak and I love the way he put it. He's like, your wide receivers are your salespeople. You know, think of. Regardless of what you do with the plan.

Yeah, the salespeople.

I mean, Deion Sanders or not. Yes. Jerry Rice or Carol Owens or whoever, Michael Irvin, they're flashy, they, they want to be loved. He's like, think of your finance people as your offensive line. Like they're kind of in the trenches doing the dirty work. He was talking to a bunch of CFOs and it was Just kind of an interesting analogy. He's like your quarterback's your CEO. And I kind of laugh because I could definitely think of some salespeople. I mean, they're fabulous, you need them, right? But I can see that personality kind of fitting for a number as people I've worked with.

That's good.

Yeah, it was a fun one. Thank you for that. On sales commissions, I want to ask you a question about forecasting. Obviously huge part of FP&A. Do you have maybe a cadence, a timing you like to do or process? Are you a big continuous forecasting R and O, you know, monthly, quarterly, what have you found generally works for you when you think of that part of the business, that process. Hey there, it's your host, the FP and A Guy. And today I'm thrilled to talk to you about Plan Buddies, one of my passions. It's where professionals meet excellence. This isn't just any community. It is a community ran by and for planning professionals. At Plan Buddies, we're all about fostering connections, sharing knowledge and providing mentorship among our members. Ready to elevate your career? Visit plan-beddies.com and become a member today. And here's a special treat. Use the promo code, the FPND a n d a guy, the FP and a guy for an exclusive 25 discount on your first year membership.

Yeah, I think, I think I'd like to, you know, tell, tell you in your audience about the time, about my time at Zoom Info and what we did, you know, when we started there, there was, there wasn't really a forecast and ultimately, hey, we're gonna do the quarterly with the board meeting and such. But when we really got humming, Paul, when like we had our, our FPA system implemented and it was, it was humming, well, we had a full team and we were going out, we're getting ready to go public when, when everything was working great or let me rephrase, whatever. We had everything ramped how I wanted it to be at ZoomInfo. We did a full three statement reforecast every month and we did a bottoms up so head by head. And we did it not just for the next quarter or for the rest of the year, but we did it on a rolling 18 month basis basis. So it was like a really good in depth process. And obviously like in month, you know, 15 through 18, you know, you're just kind of making some assumptions. You're not going head by of course, but you've built the infrastructure again to allow your assumptions to be useful. Right. We were super proud of that process and super proud that we had it all in our adaptive insight system. And you could literally push a button and change the new sales today and watch it flow through to unlevered free cash flow 18 months from now. Like we were, we were very proud that we got there. And you know, my boss at the time, Cameron Heiser Henry, everybody used it because you had to always know where the business is going to be for your being raised and your earnings and things like that. So at our, I guess say at our peak, we were doing it kind of monthly like that, at that, at that level of rigor. And that was a really good process. But that was a process it took us years to get to. Right. To build out the planning system, to get there, to build out the people to enable them to go get there, to build out the timing to have it happen in a month and get there. Right. So we're certainly not there at PADDLE yet because we've done a full rebuild of our FPA team. We're still hiring people there in fact, but we're getting actually in our first one right now because we have a board meeting in, in May. So we're doing our first forecast. But ultimately we're going to get to the same level here. We're going to get to a monthly repeatable process that the business and my boss will be able to rely on. Right. This is, this is the direction we're heading. Right. And this is what this means. If we want to invest here or de invest there and move this around, it will have these impacts, I think, I think that is super powerful. So I'm a big believer in frequent forecasts. I'm a big believer in a three statement forecast. I'm a big believer in it needs to always roll out to the future to at least give you an idea of what the world looks like. 18 months. Right. It won't necessarily be right, but at least tells you, you know, if things follow these trends, this is what this looks like. So, so that's where we're going to get you a paddle too, hopefully.

I would love to know what are maybe some key lessons learned or how did you think about that process? Because very few companies, I will say are doing that level of rigor with a full 3 statement monthly. And that requires really having made sure you implemented your system well, you have the tools in place. Because if you're trying to do that in a scaling company in Excel with no tools, you're going to burn out your people. I don't think it's sustainable for the average company. Well, maybe walk through a little bit of how you kind of scaled that and got to that point.

Yeah. So I think you, you raised the tooling and the tooling is important. So let me go back to zoom info time. We had adaptive insights. It, you know, it took us, it took us a while we to build it out. We actually, we were able to build most of it. Definitely the P and L, we were able to build the balance sheet. When it came to cash flow statement, we had to go outside and get some real like specific consulting help to get that, to get that humming. But, but when we did they, we made sure they all linked together. Right. Which sounds obvious, but everything links together and we really focused on what were the important drivers that we could change in the model. And we did it so that you could change your driver here and literally cash would change over here. That was a game changer for us. Not just having it up, but then enabling FP and a team on how to go model inside of it. Right. Enable, literally enable them to write the formulas and know what could change or what couldn't change as we, as we continue added metrics that could totally evolve the business. So I do think step number one is having the right tooling. That and set number two is knowing what's important, knowing what's not important. Right. So you're going to go talk to your business. Your business is not thinking 18 months ahead. Your business is not always thinking about the forecast. So it's being able to have the conversation when you're going over their actuals to kind of say, like, hey, so where are your hiring plans going to be the next few months? Okay, well, I don't know, I. Maybe I'm going to move this back or not. And being able to kind of interpret that to say, fine, they don't really know if they're going to hire this person. So let me put it in the appropriate place, kind of in the timescale. Right. And if I think that like looks funny, then let me do something, let me kind of apply. FPNA is having the right tooling that able to do that. And set number two is knowing what's important, knowing what's not important. Right. So you're going to go talk to your business. Your business is not thinking 18 months ahead. Your business is not always thinking about the forecast. So it's being able to have the conversation when you're going over their actuals to kind of say like, hey, so where are your hiring plans going to be in the next few months. Okay, well, I don't know. I. Maybe I'm going to move this back or not. And being able to kind of interpret that to say, fine, they don't really know if they're going to hire this person. So let me put it in the appropriate place, kind of in the time judgment to make things look less funny because they're really not trying to make the business look funny. They just don't know quite how to think about it like that. So having a team that has the experience or the knowledge or the ability to kind of know what looks funny and what doesn't in the forecast and know kind of how to interpret the feedback back from the business is also really important. That comes with experience, that comes with time, that comes with, with learning. And then the third, I'll just, I'll just scale, right? And if I think that like looks funny, then let me do something. Let me kind of apply FP and a judgment to make things look less funny because they're really not trying to make the business look funny. They just don't know quite how to think about it like that. So having a team that has the experience or the knowledge or the ability to kind of know what looks funny and what doesn't in the forecast and know kind of how to interpret the feedback back from the business is also really important. That comes with experience, that comes with time, that comes with, with learning. And then the third, I'll just, I'll just circle back on the. It's hard in the beginning. It's a lot in the beginning. But if you build the infrastructure and process and rigor around it, then it's. You're doing the same thing every month. You're rinsing and repeating and you're just rolling forward, right? And so once you kind of understand that and once you get the infrastructure built around it, literally to make things easier to load or literally to know how to take the feedback from hr, the feedback from the business, right? Then just circle back on the. It's hard in the beginning. It's a lot in the beginning. But if you build the infrastructure and process and rigor around it, then it's. You're doing the same thing every month. You're rinsing and repeating and you're just rolling forward, right? And so once you kind of understand that and once you get the infrastructure built around it, literally to make things easier to load or literally to know how to take the feedback from hr, the feedback from the business, right, Then. Then it becomes much Easier. And you're spending your time not dealing with the complexities of the actual numbers, but you're spending your time thinking about, like, does this make sense? Does this feel right? Is what they told me correct? Is this really what I think is going to happen in the business, or should I put, you know, some judgment on it?

Yeah. As I listen to that, I couldn't help but think one of the ways I kind of boil this down. What you're talking about is, you know, you got to have the right people and the people with the experience that they can use that judgment. Not somebody who, you know, they listen to everything, just has no idea what to do. They need someone they can go talk to if they're in that situation. So you can have that judgment, have those right people. Then you mentioned the process, just the operational. Getting that down and then bringing in the technology to enable you to make it a repeatable process that doesn't take forever.

Yeah, it's a very classic finance people process technology. Yeah, totally. Yep. Yeah.

It's amazing how often that's the answer, even though we sometimes don't want to hear it. But next question I have for you is I'd love to learn what's one lesson over your career that you learned that's been the most helpful for you, the most beneficial during your career?

Oh, man. If you can try to make in certainly like a business perspective, if you could try to make something easier for somebody else, like, that's always going to go a really long way for you. It may sound trite, right. But, like, we all have so much to do. We're all inundated with work, with messages, with deadlines. There's always something coming else. It never gets more simple. It never gets easier. So anything you can do, particularly when you're junior, to not add to that, but to subtract from that from somebody, from their business partner or from your boss, when you can just make something easier, not force somebody to not, not have it, not force somebody to make a decision if they don't have to. Because you've already brought them an easy way to look at it. You've brought them the answer and you just need to sign off. Right. I feel like that goes a long, long way. I think whenever you're a junior, I don't think you, you know, you're looking for answers and that's normal and you should. But I don't think you realize, like, how exhausting it is to have to deal with all of this stuff all the time. And in any Real, really anything you can do to kind of just make the burden a little bit easier on anybody around you. Peer below you, above you goes, I think, goes a long, long way and helps people like, oh, that person, that person gets it. But that's the person I want near me because like we can, we can give each other. It's not just a give on my part. Right. Like he can give to me or she can give to me, I can give to him or her and like we can make a partnership as opposed to, I've got to be feeding that person all the time. So I think that the way we.

Manage data is perfect for a world that no longer exists. Over half your team's time is spent cleaning data. Imagine a notebook that does the work for you. Turn dirty data into a powerful asset with analyst intelligence. Join modern FPA teams@ AnalystIntelligence.com today. Totally agree. Having that employee that makes your life easier versus the one you feel like you're constantly having to help bring along.

Yeah.

Huge difference for sure.

Or even the neutral. I mean. Yeah. But yes.

Yeah, yeah. Either of those, those ones that, you know, you can rely on and they're going to make your life easier are golden. You want to stay with those people.

Totally. Yeah.

So we're going to move into what we call a rapid fire section. How this works. Have five or six questions. You get, you know, about 15, 20 seconds, kind of answer each of them and then at the end, if you want to elaborate on something, you can.

Okay.

All right, so here's the first one. What is the number one technical skill that FPA professionals should master?

Spreadsheet mastery, preferably Excel.

All right, what is the number one soft skill that they should master?

Do you want to translate a spreadsheet to actually what's happening in the business so that a non finance person can understand clearly and easily? Be.

I'll tell that story from the spreadsheet. I like that one. What's your favorite thing about Excel?

The flexibility you can just do so.

Much with is pretty amazing. I've seen just about everything. How about your least favorite thing? What's something you don't like about Excel?

It doesn't read my mind. Exactly. And do exactly what I want it to do all the time. You know, it's like, ah, that formula. I just want to do that. But no, I've got to, you know, go code it a little bit, you know, one day.

That is true. Sometimes you have to spend some time figuring it out for sure.

Yeah.

Are you guys currently using an FPA platform.

We are, we're using Reason pigment, so. Yeah.

Great. And how that implementation go for you.

So we are still kind of rebuilding a little bit. When we, when we got, when I came here, we had pigment. We were only using it for the actuals. It wasn't really built out for the forecast yet. So we are in the process of building it out for the forecast and going forward. But we are, we are optimistic.

Great. I hope that all goes well for you. And then are you currently on your own using Generative AI?

We're not. I think about it a lot. I'm still looking for quite the use case inside of finance, but I am optimistic about that as well.

Great. We'll have to check back at some point and learn how both those went. I'll be curious to hear what use cases you find and how the rest of the implementation goes for you.

Thank you. Yeah.

All right, so this next section we have is our get to know you section. Okay. Get to know a little bit about you. So the first one, tell me about a favorite hobby or passion that you have.

Yeah, I think my favorite thing to do is to go travel. I'm very fortunate. I've been able to travel many, many, many different places and, and I, I make sure to go do that.

So travel, favorite location that you've been to.

My favorite trip I've ever been on was to South Africa which was just incredibly beautiful and in safari was amazing.

So yeah, yeah, my sister did that and she told me all about it. She loved doing the safari. That'd be a fun one for sure.

Yeah.

What is one book that you've read that you could recommend to our audience?

I'm gonna say two. I love books by the way. If I had a different second hobby, you would ask me about it, I'd tell you about reading. But so maybe two. One business one that I, that I liked, I thought was really good was the Hard thing about Hard Things by Ben Horowitz. I thought that was an easy read, but was was really good. And then one I just recommend other people read is this guy Oliver Berkman who wrote this book called 4000 Weeks a few years ago. And 4000 Weeks is about the average human lifespan. He talks about kind of how to think about that, how to optimize that and what should you do to try to get the most out of your life. And I'm not big on self help kind of things. I would describe to self help. It was science based but very insightful, I thought.

Interesting. I'll have to check that one out. I've never heard of that one. You told us the next one, which was your favorite travel destination. You mentioned the. To South Africa, the safari. So this last one here, if you could have dinner with one person in the world today, who are you going to dinner with and why?

One person. I really like science. I really like physics. There's this scientist who I've read a bunch of his books about, you know, time travel and gravity and string theory and black holes. All these things like, blow my mind and the, the level of intelligence people have to be able to think about these things. So this guy's name is Brian Green. I think it'd be super cool to have dinner with Brian Green and Jeff and blow my mind. All things science.

Get to get your science fix in for the evening. That'd be fun. Well, we're going to go ahead and kind of wrap up here. We just have two more questions for you. The first is if you could offer one piece of advice to our audience to be a better FPA business partner, something they could start doing today. What would that be?

It would be think about, know your audience and think about the aspect of the business that you're partnering with. Right. So think about that leader you're presenting to and try to think about the challenges he or she is facing. And then tailor your conversations, tailor your analyses, tailor your numbers, tailor what you're thinking about the business to what, how he or she is thinking about it. Because they're ultimately your customer and it is FPA or even in finance overall, you're in the customer service business. So it would be to remember that. Remember, yes, you're doing numbers, but you are really trying to translate it and be part of the business.

Kya. Know your audience.

There we go.

I like it. If somebody wants to get a hold of you or learn more about you after they listen to this, what's the best way for them to do that?

Yeah, I think, I think I want to love to, love to get in contact with anybody who wants to reach out. But you can hit me up at LinkedIn. It's Philip Watson. Philip with one L. And then also if you'd just like to write me in my paddle email address, it's Philip P H I L I P Watson W A D S oddle dot com.

Well, thank you for sharing that and thanks for joining the show. I really enjoyed chatting with you and excited to release this to the audience.

Cool. Thanks for all. I had a great time. I really appreciate it, man.

Thanks.

Take care.

Better FP and a business partner, something they could start doing today. What would that be?

It would be think about know your audience and think about the aspect of the business that you're partnering with. Right? So think about that leader you're presenting to and try to think about the challenges he or she is facing. And then tailor your conversations, tailor your analyses, tailor your numbers, tailor what you're thinking about the business to what how he or she is thinking about it. Because they're ultimately your customer and it is FPA or even in finance. Overall, you're in the customer service business. So it would be to remember thanks.

For listening to FP&A tomorrow. If you enjoyed the show, please leave us a five star rating and a review on your podcast platform of choice. This allows us to continue to bring you value great guests from around the globe. As a reminder, you can earn CPE credit by going to earmark cpe.com downloading the app, taking a short quiz and getting your cp.

Remember, yes, you're doing numbers, but you are really trying to translate it and be part of the business.

Kya Know your audience.

There we go.

I like it. If somebody wants to get a hold of you or learn more about you after they listen to this, what's the best way for them to do that?

Yeah, I think, I think E certificate.

To earn continuing education credits for the FPAC certification.

Take the I want to love to love to get in contact with anybody who wants to reach out, but you can hit me up at LinkedIn. It's Philip Watson, Philip with one L. And then also if you'd just like to write me in my paddle email address, it's Philip Quiz on Earmark and.

Contact me, the show host for further details.

P-H-I L I P.Watson W A-S O.

Paddle.Com well thank you for sharing that and thanks for joining the show. I really enjoyed chatting with you and excited to release this to the audience.

Cool. Thanks Paul. I had a great time. Really appreciate it man.

Thanks.

Take care.

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