From CFO to Fractional Leadership Navigating AI and Financial Growth
Show Notes
Welcome to FP&A Tomorrow, where we discuss financial planning and analysis, examining its current state and future prospects, with your host Paul Barnhurst.
The title sponsor for this week’s episode of FP&A Tomorrow is Abacum, the leading mid-market FP&A solution trusted by hundreds of companies to eliminate the spreadsheet struggle. https://www.abacum.io
In today’s episode with Tom Schultz, Paul had an insightful conversation about the evolving landscape of financial planning and analysis (FP&A) and its implications for fractional CFOs.
Tom Schultz, founder and CFO of NextGen CFO, sheds light on the crucial skills behind successful financial analysis and the evolving role of technology in finance. From his extensive experience, Tom shares invaluable insights into transitioning from traditional FP&A roles to becoming a sought-after fractional CFO.
Key takeaways from this week's episode include: :
Here is a concise summary of the key points from the discussion:
Professionals in financial planning and analysis are tasked with translating real-world events into financial data, forecasting, and modeling these numbers to plan for future outcomes strategically.
The discussion concerns how advancements like AI and prebuilt dashboards might impact the depth of learning traditionally required in FP&A roles. Integrating new technologies poses challenges and opportunities for professionals in the field.
The evolution of a career in finance, emphasizing the shift towards providing strategic fractional CFO consultancy.
With the increasing demand for fractional CFOs, there's a spotlight on the advantageous position of FP&A professionals looking to transition into these roles.
The intent is to offer a comprehensive resource for those interested in the niche, inspired by numerous informal mentorship interactions.
The strategic adoption of technology in financial practices, highlighting the importance of aligning technology use with client needs and exploring the capabilities of generative AI to streamline writing and documentation processes in finance.
Quotes:
Here are a few relevant quotes from the episode about FP&A mastery:
"A great FP&A person in my mind is someone who knows what's behind the numbers."
"It's more in private companies that are slow to hire a professional CFO. I think if you're out there fundraising and I've seen pre-revenue hire a fractional CFO just because they need navigation for investors."
"The young people coming into this profession, I'm concerned that they'll take that stuff for granted and learn down to the root that we learned."
"If you look at the CFO in the finance department, the controller and everyone below them tend to look backward in history. The CFO tends to look forward, so the FP&A person is more forward-looking than anyone else in the finance department."
Join Plan Buddies:
Plan Buddies, where professionals meet excellence. This isn't just any community. It is a community run by and for planning professionals. At Plan Buddies we are all about fostering connections, sharing knowledge, and providing mentorship among FP&A experts. Ready to elevate your career? Visit plan-buddies.com and become a member today. Here's a special treat. Use the promo code “TheFPandAGuy” which is the FP&A Guy for an exclusive 25% discount on your first-year membership.
In today's episode:
[00:49] Introduction.
[02:04] Guest’s background.
[02:41] The Essence of Great FP&A.
[03:31] The Impact of Technology on FP&A.
[04:58] Guest’s Career Journey and Shift to Fractional CFO.
[07:56] Advice for FP&A Professionals.
[15:30] Role of Technology in Modern FP&A.
[32:40] Rapid-fire session.
Follow Tom:
Website - https://www.nextgencfo.com
Follow Paul:
Website - https://www.thefpandaguy.com
LinkedIn - https://www.linkedin.com/in/thefpandaguy
For CPE credit please go to earmarkcpe.com, listen to the episode, download the app, and answer a few questions. For AFP FPAC certification answer the questions and contact Paul Barnhurst for further details.
Full Show Transcript:
Host: Paul Barnhurst:: Abacum is the leading mid-market FP&A solution trusted by hundreds of companies to eliminate the spreadsheet struggle. Visit abacum.io today and multiply the impact of your finance team. Hello, everyone. Welcome to FP&A Tomorrow, where we delve into the world of financial planning and analysis, examining its current state and future prospects. I am your host, Paul Barnhurst, aka the FP&A Guy. I will be guiding you through the evolving landscape of FP&A. Each week, we'll be joined by thought leaders, industry experts, and practitioners who share their insights and experiences, helping us navigate today's complexities and tomorrow's uncertainties. Whether you're a seasoned professional or just starting your journey in FP&A, this show has something for everyone. Before we introduce this week's guest, I want to give a special thanks to our title sponsor for this episode, Abacum, whose support makes this episode possible. Now let's dive into the world of FP&A this week we are thrilled to welcome to the show Tom Schultz. Tom, welcome to the show.
Guest: Tom Schultz:: Thank you for having me.
Host: Paul Barnhurst:: Excited to have you. So Tom comes to us from Greensboro, North Carolina. He's currently serving as the founder and CFO of NextGen CFO, fractional CFO services. He earned his MBA from the University of South Carolina, and he also earned a BA in psychology from the University of Michigan. He is also the author of "So You Want To Be A Fractional CFO." We're going to start here. This is a question we ask every guest that we start with. So Tom, in your mind, what does great FP&A look like?
Guest: Tom Schultz:: A great FP&A person in my mind is someone who knows what's behind the numbers. The numbers are on your screen, on your spreadsheet, on whatever. But there's stuff happening behind the scenes that represents numbers from. So what we do is, is a great FP&A person will be able to translate what's happening in the real world into the numbers, then they'll take those numbers and they'll forecast or model them to get their desired outcome or potential outcome.
Host: Paul Barnhurst:: Now, I like that. It's about a lot more than the numbers. I would agree with you and I'm curious, with all the technological changes we've seen over the last year, how do you see FP&A changing over the next few years? What do you think maybe some of those biggest changes are going to be?
Guest: Tom Schultz:: Well, I'm a little bit concerned about that because I think that the prebuilt dashboards and the artificial intelligence, I'm starting to see that stuff that we used to do with a blank spreadsheet is now being done for us. So the young people coming into this profession, I'm concerned that they'll take that stuff for granted and learn down to the root that we learned. So I'm just hopeful and I know it'll be enhanced through all these prebuilt dashboards in the AI. But I'm curious to see how the teaching of this stuff goes and how people turn out.
Host: Paul Barnhurst:: It sounds like excited to see where technology is going to take us, but concerned that it will, I want to say shorten or doesn't give the incentive for the people coming up behind us to learn in-depth like we had to.
Guest: Tom Schultz:: Correct. I still remember when I was a kid, I used a slide rule and I was really young, then I graduated to the HP 12 seat, then I was with spreadsheets and I thought I'd be good with spreadsheets for the rest of my life. It's still progressing.
Host: Paul Barnhurst:: No question about that. Technology is constantly changing. It's pretty amazing to watch. So why don't you go ahead and tell our audience a little bit about yourself and your background?
Guest: Tom Schultz:: I was a CFO for about 15 years back in the early 1990s and I worked for a company, this was my first CFO gig, worked for a company that made pharmaceutical packaging. When I started with the company, we were $10 million in sales and in my 15 years there, I've got the most incredible CFO education because we bought companies, we sold companies, we did joint ventures, did a joint venture in Mexico and one in Poland. So we had the foreign currency expertise or experience. Then I helped the owners sell the company at the end of 15 years. So here I was for about a year, I was doing two jobs. I was a CFO for the company, but I was also the only person in the company that was working the due diligence and working with the potential suitors. Then we got up to closing date and right after closing date, the owner of the company was cashed out and the P Group that bought us brought in a new CEO who was my best friend for about three months and decided that after three months, he had gotten all the knowledge he needed out of me and decided to he wanted his own CFO. That was back in 2006 and that was my launch into fractional CFO work.
Host: Paul Barnhurst:: I got it. So you've been doing fractional CFO work for almost 20 years.
Guest: Tom Schultz:: 18, but who's counting?
Host: Paul Barnhurst:: As I said, almost close enough 18, 20 round, right?
Guest: Tom Schultz:: 45 companies, I worked for, in that time. 45 companies.
Host: Paul Barnhurst:: 45 companies, wow. So tell us, how did you get started in fractional CFO work after you left your last job?
Guest: Tom Schultz:: Well, it was really by accident. The owner of the company, that had just sold and that I had just left, he called me up and said I'm doing some angel investing in this small company, and he wants to do a follow on investment, and I just need someone to go in and look at it and see if it's worth making that follow on investment. So I went in and determined that indeed, the product was good, but the guy had no financial expertise or anything. I mean, he was just spending money. He was coming in, he was depositing it, he was spending it, and he was not really tracking or controlling it. So the investor said, if Invest more money, will you come on board as a fractional CFO? Well, we called them part-time CFOs back then, we didn't call them fractional for a while. So I went in and that was my first part-time CFO gig. I was just a half day a week, and it was just something I was doing to tide me over until I found my full-time job. Then two months later, I got another call.
Guest: Tom Schultz:: This was someone who knew someone that I knew and he said, I heard you're doing this part-time CFO thing. Would you be willing to come in and talk to me? So I went in and talked to him, and that became a one-day-a-week. That was a general contractor, which I had no experience working within the construction business. But I became a general contractor CFO one day a week. So I was quickly becoming more discriminating in what I was looking for as a full-time job. Two months after that, I got a freelance job working for a PE-backed company that was rolling up companies and just needed help in general. That filled up my days so that by the time I got to first anniversary of leaving my prior job, I sent out an email to all my network of people that I knew that were looking for a job for me. I said I'm not looking for a job anymore. I'm looking for this part-time CFO work. So that launch, it was an accident, but it worked out great.
Host: Paul Barnhurst:: I was going to say it sounds like the happy accident that worked out well. Well, that's great. So by the end of that first year, you had, what, three, four, five clients this sounds like, and kind of the way you went?
Guest: Tom Schultz:: I had three clients, one of which was three days a week assignment.
Host: Paul Barnhurst:: Exciting. So I know as you got into this, at some point, you decided to write a book about fractional CFO services, "So You Want To Be A Fractional CFO." Kind of what prompted you to write that book?
Guest: Tom Schultz:: Well, really goes back to that first year or two when I was being a part-time CFO. I looked on the internet. It was 15 years ago, what, 18 years ago. So it was not as robust of information on the internet back then. I talked to lots of people and there was not much there to give me guidance or help me. I was wishing there was, but there wasn't. So I thought for years about writing a book, just put it on my bucket list hey, I'd like to write a book, and it's out there on my bucket list while I was going through my career working with multiple fractional CFO companies. But what was happening all along is that I would get phone calls from people saying, hey, I know so and so. He's interested in becoming a fractional CFO. Could you talk to him about what it's like? Invariably, it was someone who had just lost their job. They didn't want to leave the area. They were a CFO. So I would talk with him and I would tell them exactly what it was like, and we would do that over lunch, over coffee. I sat back at about nine. Let's see. So it's 2022 of June. I said I'm kind of tired of all these. I added up to about 50 or 60 of these lunches or coffees, just talking to people and telling them what it was like and having to repeat the same thing over and over again. I said, now's the time. I need to write that book so that when someone asks me, what is it like to be a CFO, I can hand in my book and say, all right, read the book. Then if you still have questions, we can talk after. So that was kind of the seeds of that.
Host: Paul Barnhurst:: A great way to be able to avoid having lunch every week and be able to tell people "Look, here's your resource. Come back if you have questions." So next question I have for you is I'm curious about your take, do you think FP&A professionals are well-positioned to be fractional CFOs?
Guest: Tom Schultz:: Well, I didn't bring this up in my background, but I started as an FP&A person. I got my MBA from South Carolina, University of South Carolina, and went to work for a company called NCR. I don't know if they're still around. They made the National Cash Register, stood for, and we were making computers, actually, many computers and manufacturing facility that was supporting close to $1 billion worth of revenue. I slotted into the accounting department and they made me the standard cost analyst is what my first job was. Then I moved over to be a pricing analyst. Through all of that, I was basically doing what FP&A is today, I believe. So that was my beginning. Then I moved from there to be a controller for a women's clothing retail chain. That was my first controller job, and I was doing FP&A work while I was there. So yeah, I kind of parlayed the FP&A into a controller and then eventually into a CFO. I think that FP&A is a great foundation for doing that. If you.
Host: Paul Barnhurst:: Think FP&A professionals are in a good position to be a CFO.
Guest: Tom Schultz:: Well, think about it. FP&A guy. They're going to do cash flow projections. They're new forecasts, they're going to do models of things, financial models, and all of that is future looking. If you look at the CFO in the finance department, the controller and everyone below them tend to look backward in history. The CFO tends to look forward. So the FP&A person really is more forward-looking than anyone else in the finance department, I think. So that's a great foundation.
Host: Paul Barnhurst:: I would agree with you, I do. FP&A is definitely forward-looking, right? It's all about how you get to best spend that next dollar versus what happened historically, like accounting or others. What other skills do you think are needed? You know, obviously, an FP&A professional gets a lot of budget forecasts, a lot of analysis, a lot of those kind of how do you best spend the next dollars, or are there other skills or other things beyond just FP&A that you think an FP&A professional needs, as they're looking to be a fractional CFO?
Guest: Tom Schultz:: Well, until about five years ago the only people coming into the profession, the vast majority were CFOs, skilled CFO people. So, I mean, ideally, if a person could go on and be controller and then launch to a CFO from there, that would be ideal. But over the last five years, the demand has grown. So much for fractional CFOs that a lot of people outside of just CFOs are moving into it. In fact, I've had phone calls over the last few months just from my book, from people that say "I want to be in fractional CFO" A lot of them are FP&A people. It's like, I want to make the jump from FP&A to fractional CFO. What I generally counsel them is there are gaps they need to fill in. So I coach them that it could be somewhere online. There's some good online coursework on how to be a CFO. It's geared toward people who are controllers maybe now and want to be a CFO. There are some good LinkedIn sites and to try and increase the knowledge level that a CFO would use. But it depends on the client. If the client say $5 million company the CFO has to be a well-rounded person, understand everything from accounting to working with banks to working with insurance to probably some HR and payroll things. For an FP&A person to walk in on day one and say and counter that it might be a little uncomfortable for them at first. So I would also coach them to go find an existing fractional CFO firm that has analysts in their group. So some of them have controllers and financial analysts, and you could get on board with them to start. Then you could work your way up and have them mentor develop you into that fractional. So that's another way.
Host: Paul Barnhurst:: I think that's really good advice, a lot of times to start by working for a firm. I know I did a little bit of work for one that does a lot of fractional CFO accounting, a lot of different fractional work, and having that mentorship and that experience where you go from FP&A to being someone who works with a firm to do fractional CFO work, well, they fill in those gaps is a good way to go versus jumping out on your own, either not being able to fulfill the clients needs or struggling to get up to speed and maybe not meeting all those requirements just because you don't have the experience, that's a good point. So the next question I have for you, in your book, you tell a story about meeting John Smith and counseling him about fractional CFO work. Can you tell us that story?
Guest: Tom Schultz:: Well, John Smith was actually a composite of all 50 people I met with. So it wasn't a real individual. But generally speaking, I would sit down with someone and they would tell me their story of, well, I want to be a fractional CFO, and here's my background, but there are a lot of things that they need to take into consideration. First and foremost "Do you have the financial wherewithal to become a fractional CFO?" Because in our business, it's very rare for someone to be hired out as a fractional CFO to a firm and get a salary. Usually, you get a percentage of what you bring in from your client's work. So when you start out, you're not going to be necessarily given a full client load, or you might have to go out yourself and earn your own clients. So you need a counsel and you need six months of living expenses to be able to ride that out until you can fill up your book of business.
Host: Paul Barnhurst:: That makes sense.
Guest: Tom Schultz:: I talked with John Smith throughout the whole book. So I did a lot of aspects. That was my theme, weaving through the book of meeting with John Smith and talking to him on all the various aspects. We talked about the fractional CFO being a trusted advisor to the owner of the company or CEO. We talked about going in and cleaning up messes. The interesting thing is that even though I'm a CFO, sometimes I walk in, and if there's no controller there. I've got to roll up my shirt sleeves and pull out, put on my accounting hat, and do some accounting and controller work.
Host: Paul Barnhurst:: Now, a word from our sponsor. The FP&A process is broken. You know it is and I know it is. Putting together management reports takes forever. There is a growing demand for operational insights and running scenarios or preparing budgets will inevitably break your spreadsheets. It doesn't have to be this way. Abacum is the leading mid-market FP&A solution, empowering hundreds of finance teams to eliminate their spreadsheet struggle with automated reporting and forecasting. With Abacum, finance teams can see every financial and operational KPI in real time, forecast revenue more accurately, build headcount plans, budget their spend more effectively, and run any scenario with just one click. Abacum is the most scalable FP&A solution for finance teams. If you want to double your output half your reporting time, forecast your performance and become a strategic partner to your business. Visit abacum.io today. I'm curious how often, when you get into a new company, is the accounting a mess and the fractional CFO space? I've heard that's often a challenge. So what does it typically look like when you get in there?
Guest: Tom Schultz:: Usually, it happens when there's a controller left. The owner of the company tries to find a new controller or accounting manager or lead full charge bookkeeper. It's 2 or 3 months and no one knows what they did. Then I walk in and it's a mess. So they looked to me as a fractional CFO. They say, hey, can you clean up the mess? I can clean up the mess, but you don't want to pay me what I would charge per hour to clean up the mess. I can oversee the process and help you hire the right outside service or professional to bring in to do that. So the mess, I mean, just debits and credits stuff doesn't get posted right. I mean, just things get piled up and then the worst part is when you go into a mess that someone was there and they were posting things wrong. I had one company I went into, they were doing online bill paying through their bank, but they weren't recording the payments into QuickBooks. So they put the invoices in QuickBooks, then they weren't recording the payments, and they didn't do that for about six months. So that was just a mess to reconcile the bank account. So I don't know if you wanted that level of detail.
Host: Paul Barnhurst:: No, that's helpful. Definitely, that can be a mess. That's what I was looking for is just a kind of interesting story there. So I'm curious if you were to offer any other advice beyond kind of what you've mentioned for our audience, which is mostly FP&A professionals on becoming a fractional CFO, what would that be? Any additional advice you'd give them?
Guest: Tom Schultz:: I would advise them to try and work their way up in the company they're in. I don't know what your audience normally is like, but I was an FP&A, then I was a controller, then I was a CFO, and that was a normal progression. But if not, if you want to be a fractional CFO, if that's something, if you read my book and you're excited by the opportunity, I would definitely encourage you to look to the existing established firms and try and get on board with them, and try and work your way up with them. The reality is, the growth is so fast in fractional CFO work that you won't be an analyst for very long, because they will need to develop you quickly to become a fractional CFO and be able to have a mentor to show you through all the ways through that, that's just wonderful.
Host: Paul Barnhurst:: It sounds like kind of two things I see there is, one, work your way up to a CFO, then go out and be a part-time CFO. Two, if you don't want to go that route, try to get an analyst-type role or something where you have a mentor, where you're working with a firm that has others, and you can help build up those gaps in your skills.
Guest: Tom Schultz:: Right. Well, maybe a third one too there. There are fractional CFO firms out there that don't have financial analysts. So you could almost be an FP&A guy, not to steal your name, but you could be an FP&A guy that's selling services to CFO firms or directly to companies that don't need them. That's another alternative.
Host: Paul Barnhurst:: Being the FP&A advisory services, focusing on just that versus the whole fractional CFO. So I'm curious, how often do you see companies come to you that have supposedly had fractional CFO or the FP&A support and all those things they needed before, but are unhappy with the level of service they're getting? Do you see that a lot?
Guest: Tom Schultz:: I get that from time to time. Not a lot. But usually what's happened is I will coach and mentor a CFO to be the appropriate CFO or the FP&A or it's usually a staffing issue. So what happened is I walked into one place where you had an accounting clerical person and a CFO, and what happened was the CFO was doing controller work and book work to augment the clerical person. So the owner called me in and said, I'm not getting anything out of the CFO, he's not doing CFO stuff for me. Well, because he was bogged down in the stuff that was kind of lower level, and we didn't have enough resources at the lower level. So we hired another clerical person, and that was like a super clerical that could also do closing the books at the end of the month. All of a sudden we had a CFO. I've worked alongside and mentored and you didn't ask this question, but the companies of the size of 5 to 50 million, which is kind of the sandbox I play in, there, usually, isn't a budget for an FP&A person, so a lot of times it's me as the fractional CFO that's doing the FP&A work. Sometimes I get a good enough controller for a bigger company, a $50 million company. We've got a good controller who does FP&A work, but it's, typically, fractional CFOs don't do an FP&A stuff.
Host: Paul Barnhurst:: That's fully my understanding. That's typically what I see. I think that's why a lot of people who are in FP&A consider going this route because there's often a lot of overlap between the two. Speaking of that how big of a role do you play in the budgeting and forecasting process as a fractional CFO? Let's say the company does have a good controller. In that situation, how heavily involved are you still in budgeting and forecasting if they have somebody doing the basic FP&A work?
Guest: Tom Schultz:: I'm in a company, 39 sales, and the controller has always done the budget for years. I am really minimally involved. I'm there for the high-level meetings, but I'm very minimally involved. I've got another $30 million company, I'm willing to, that had never done a budget. So here I am. I'm the budget guy. Just because they didn't have anyone in they had a controller who had never done a budget. So I did the budget and I'm in favor of streamlining. I'm more of a top-down budget guy than a bottoms-up detail. So did that answer that question?
Host: Paul Barnhurst:: That's helpful. So I'm curious, from your perspective, what's the hardest part of getting a company to do a budget for the first time?
Guest: Tom Schultz:: The hardest part is, first of all, convincing the owner that they need to do a budget or the advantage of doing a budget. But once that's over, then you've got to convince the senior leaders, the managers, whoever's got their piece of the budget starting with the sales folks, oh, we always do a sales budget, but they never share it with the company. So then you've got to go down and manufacturing operation, you've got a plant manager who's got a budget, materials and things like that. So they've never done it before. So the hardest part is just introducing it to them. The way I do that is, I produce historical data. So I'm saying, I want to I want a material percentage out of you for the sales that we're going to project. So the material percentage has been 50% two years ago, 49% last year and now, showing them the trend of the costs and all the expenses as well.
Host: Paul Barnhurst:: Make sense. So I'm curious from your perspective, where you sit, what is the key to being a great business partner for finance to be a great business partner with the business. What's required?
Guest: Tom Schultz:: What is required? You have to be part of the business. So I'm here only one day a week with a client. The senior leaders as well as the owner come to me with financial questions. So they do that. I'm a trusted advisor, not only to the owner but to the other senior leaders. I get them their answers. I'm kind of the liaison down to the controller and the historical financial reports. But I also am always looking forward. So the looking forward part, looking out the front windshield of the car, that's what I do. I'm usually ahead of everyone, frankly. I'm looking for one year, two years, or three years down the road and trying to model that in the financial projections. That allows me to go back and say to the other managers, hey, what do we have to do in order to get there? There are some really good discussions that come out of that.
Host: Paul Barnhurst:: I got it, thanks. That's really helpful. So next question I have for you is, why do you think many companies are so late in hiring fractional CFOs and these advisory services? From your experience, what do you think the main reason is that they often delay longer than they probably should?
Guest: Tom Schultz:: It used to be that they just didn't know about them. Now it's becoming less and less the case. Now I think there are a lot of people who own a company. Now we could be in the $2 million to $50 million sales range, so owners of companies, especially, privately held ones, it's their money, and the business profit is their money. So they feel like they've got a controller and that's good enough. They don't really know what they don't know, what they're missing. So usually it takes a point of pain, what I call it, "A mess that needs to be cleaned up, a bank that's turning the screws on them." Or it could be they're sitting in the country club after a round of golf and their golfing partner, who's their next-door neighbor, says, "No, I hired this fractional CFO, and we've just gone gangbusters what he's been able to bring to the table." So it's slowly but surely happening. It's more in private companies that are slow to hire a professional CFO. I think if you're out there fundraising and I've seen pre-revenue hire a fractional CFO just because they need navigation navigation for investors.
Host: Paul Barnhurst:: Sure. When you're raising funds I would imagine if you don't have any of that experience you're going to want support there, obviously. But as you said, private companies that haven't raised any funds, family-owned or whatever. It's like, well, that's all my money. I'm doing good enough. I have a controller. Why would I spend another couple of hundred thousand a year, whatever it costs for a fractional 50,000, whatever the number may be, What am I going to get for it? That makes a lot of sense to me.
Guest: Tom Schultz:: When I come into these companies, if there's not been a CFO before, usually, the owner of the company is the one wearing the CFO hat, and they're not doing it very well but won't admit it.
Host: Paul Barnhurst:: That's not surprising. A lot of times CEOs will try to wear that hat. The first budget might be done by the CEO. But if they have no finance background, they're going to be missing on a lot of things.
Host: Paul Barnhurst:: Hey, there. It's your host, the FP&A Guy, and today I'm thrilled to talk to you about Plan Buddies, where professionals meet excellence. This isn't just any community. It is a community run by and for planning professionals. At Plan Buddies were all about fostering connections, sharing knowledge, and providing mentorship among FP&A experts. Ready to elevate your career? Visit plan-buddies.com and become a member today. Here's a special treat. Use the promo code “TheFP&AGuy”, that is the FP&A Guy for an exclusive 25% discount on your first-year membership.
Host: Paul Barnhurst:: So this next section is what I call our kind of rapid-fire section. There are a number of questions I'm going to ask here. You get up to 30s to answer these. So some will only take you a couple of seconds, some you may want to go a little longer, but the first one is do you prefer to use Google Sheets or Excel?
Guest: Tom Schultz:: Excel.
Host: Paul Barnhurst:: All right.
Guest: Tom Schultz:: Actually, I grew up on Lotus 1-2-3, then they dragged me over to Excel. Just because Lotus 1-2-3 went away. Actually, I have yet to have a client who uses Google Sheets.
Host: Paul Barnhurst:: What are the industries you're mostly supporting? I'm curious because I would have expected a few.
Guest: Tom Schultz:: Manufacturing, distribution. Usually, they're established firms. They've been around for a while. I don't usually get involved with early-stage and pre-revenue stage companies.
Host: Paul Barnhurst:: Now I'm curious, do you use any kind of planning platform or do you use Excel for your own planning for your company?
Guest: Tom Schultz:: I use Excel primarily, but my real answer to that is, depends on what the client is using or what the client owns. They've all got their own ERP software. If there's something they've already got, then we'll try and expand the use of that. I've got one client right now, we have great Microsoft Dynamics and we're using Power BI. So that's our platform, I guess. but I've got other company clients that we don't have anything really. So it becomes by default spreadsheets, Excel.
Host: Paul Barnhurst:: I know, totally understand. So it sounds like in the manufacturing industry there are probably a lot of different ERPs you see from Microsoft Dynamics, NetSuite, Sage, QuickBooks, I'm guessing on some of the smaller ones.
Guest: Tom Schultz:: QuickBooks are smaller ones.
Host: Paul Barnhurst:: Any other big ones you see or those kinds of the most common ones you see?
Guest: Tom Schultz:: They're a little all over the map. I'm in a manufacturing company, they've got an informer system that's called M3. Who's that? Ever heard of that? But they got hundreds of clients. Then I've got a forklift company that has their own system that no one's ever heard of, but it's designed specifically for forklift companies. So what you said, literally. But the interesting thing is, you might find this interesting, I ran into a guy who's a CFO at a $100 million company, and they're still on QuickBooks desktop. It's like, What does that still? Have you not outgrown it yet?
Host: Paul Barnhurst:: You would think they have outgrown it. But I've heard of a few that size. It's always surprising to me when they get that big and they're still using it because definitely it's not designed for a mid-market company.
Guest: Tom Schultz:: Nope.
Host: Paul Barnhurst:: I use QuickBooks, but I'm a business of one.
Guest: Tom Schultz:: In fact, I do too for my one-person business.
Host: Paul Barnhurst:: I'm curious, with your firm and yourself, are you using generative AI today?
Guest: Tom Schultz:: We are not. Actually, we've got 16 CFOs in our group, and everyone's kind of moving at their own speed. No one's doing it collectively. Me, I use ChatGPT, the free one. You download 3.5 and I'm using it more for writing than anything. But in one company, we've used doing Job Descriptions, really streamlined that process for doing job descriptions. But I mean, everywhere I'm looking, I need to get up to speed on that.
Host: Paul Barnhurst:: It's definitely coming. I think writing is a great place to first use it, whether it be emails, job descriptions, or proposals. It's great at summarizing stuff. Hey, give it this email and rewrite it. Review it for me, then you tweak it a little bit. I like to think of it as a tool that can help get me part of the way there and then finish it. But can be very helpful in that area. So I'm excited to see where it comes. So if I asked you to list one technical skill that you think is most important for FP&A professionals to master, what would it be?
Guest: Tom Schultz:: I guess, it would be the spreadsheets.
Host: Paul Barnhurst:: Not surprised. I think a lot of people would say that. Learn the spreadsheet. What would the soft skill be? The one kind of soft or human skill that people need to master?
Guest: Tom Schultz:: I would say, listening and talking with people. I'm someone who just sits in their office and deals with the numbers. It's okay, I guess, but if you can walk out and go out into the operation, whatever it is, go talk to a salesman, go talk to whatever, you're going to learn so much more about the business and what's behind the numbers.
Host: Paul Barnhurst:: Well, I agree. I couldn't agree more. Being a great communicator and spending time with the business is just huge. This next section is called “The Get to Know You” section. Okay, so this is where we want to get to know a little bit about you. Tell us about a favorite hobby or passion that you have.
Guest: Tom Schultz:: I like bicycling. Cycling long distances on the road. So that's kind of my passion. I used to be a golfer, but I just don't have time for golf anymore. That's a cycle.
Host: Paul Barnhurst:: Cycling. Used to be golf, but cycling mostly. If you could recommend one book to our audience to read, what book would you recommend?
Guest: Tom Schultz:: I would recommend, "Scaling Up" by Verne. I can't remember his last name, but it's talking about taking a small company and growing it up in all the different areas.
Host: Paul Barnhurst:: Perfect. So "Scaling Up". Next question, what is your favorite travel destination?
Guest: Tom Schultz:: Charleston, South Carolina.
Host: Paul Barnhurst:: Why Charleston?
Guest: Tom Schultz:: It's just a beautiful old city. It's got all the old historical stuff. It's just the people there are so laid back and comfortable, of course, there are beaches there. It's just a relaxing place to be. So we've been going there, my wife and since we got to know each other and our daughter went to school and College of Charleston. So that gave us the opportunity to go 4 or 5 times a year to visit her and also go down there.
Host: Paul Barnhurst:: Fun, that's one place I haven't been. I'll have to add that to my bucket list.
Guest: Tom Schultz:: There you go.
Host: Paul Barnhurst:: If you could have dinner with one person alive in the world today, who are you going to dinner with and why?
Guest: Tom Schultz:: One person alive, I didn't come up with this, so I'm going to wing it, I would say Jamie Dimon.
Host: Paul Barnhurst:: Why Jamie Diamond?
Guest: Tom Schultz:: He is a banker, a top of the financial. You know, JPMorgan, and everything I read from him or hear from him just kind of makes sense. He's got that worldview that not a lot of people don't have yet. He seems to make sense and his way of looking at finance.
Host: Paul Barnhurst:: I think he does have a strong worldview. I've read a lot of things from them that I could understand. So he would be an interesting one to have dinner with. I'll have to be the fly on the wall for that dinner. So we're going to head into our w section. I just have two more questions here and then we'll let you go. What advice would you offer to our audience to be a better FP&A business partner? What's that one piece of advice you're going to give them?
Guest: Tom Schultz:: I guess, I've already said it a couple of times, is to get out there and talk to people, walk around. Actually, when I was at my first FP&A job, I got these things. I've seen these atomic fireballs, little candies around candies, and they're very hot in your mouth. I used to grab a handful and walk around and just go up and down and talk to people in the area, and they would be appreciative. It'd be a good pick-me-up to get this hot fireball in their mouth. So it got to be that they would welcome, a big smile on their face when they came by. But every time I went by and I talked to them and usually, I'd ask is, what are you working on now? What are you working on? So it gives you a great perspective on the business, but it also gives you great interpersonal skills.
Host: Paul Barnhurst:: I know, I agree with you. I'm 100% with you, getting out and meeting with the business, talking to people, and spending time with them is the best thing you can do to be a better business partner. It starts with getting to know their business and getting to know them. It's hard to be a business partner if you're behind a spreadsheet all day. So last question before we let you go here. If someone wants to contact you, what is the best way for them to do that?
Guest: Tom Schultz:: Well, the best way, at the current time, is just to go to my LinkedIn profile. I've got Tom Schultz and you can find me in Greensboro, North Carolina, but I'm not sure how many times I'll be there, but you'll see me. My tagline starts with the author of "So You Want To Be A Fractional CFO." So that's where all my content is at the moment. I think down the road, I'm starting to get so many phone calls from people who want to get into this profession that I think I'll probably have something a little more professional. But at this point, if you go to my LinkedIn site, that would be good.
Host: Paul Barnhurst:: Perfect. Well, we'll go ahead and put that. We'll put your LinkedIn profile in the show notes. We'll also put a link to your book. I appreciate you carving out a few minutes for us today, Tom. Thanks for being on the show.
Guest: Tom Schultz:: Thank you for having me.
Host: Paul Barnhurst:: Thanks for listening to FP&A Tomorrow. If you enjoyed the show, please leave us a five-star rating and a review on your podcast platform of choice. This allows us to continue to bring you great guests from around the globe. As a reminder, you can earn CPE credit by going to earmarkcpe.com, downloading the app, taking a short quiz, and getting your CPE certificate to earn continuing education credits for the FPAC certification. Take the quiz on earmark and contact me the show host for further details.
