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Why FP&A Needs a Chief Customer Happiness Officer with Charlie Liu

In this episode of FP&A Tomorrow, host Paul Barnhurst, aka The FP&A Guy, explores the evolving world of financial planning and analysis (FP&A) systems. With guest Charlie Liu, the conversation shifts to the art and science of optimizing financial tools and processes to drive business success. Charlie brings a wealth of experience in FP&A, systems consulting, and fractional CFO services, offering listeners practical advice on navigating challenges in financial operations.

Charlie Liu, founder of Monte Carlo Consulting, has over 15 years of expertise in corporate performance management and FP&A systems. He specializes in helping businesses streamline operations with the right tools, enhance financial visibility, and achieve data-driven decision-making. Charlie’s unique background in consulting, product management, and sales enables him to deliver strategic and technical insights that empower organizations.

Expect to Learn

  • Key traits of successful FP&A systems and how to separate from traditional accounting

  • When and how to implement financial planning tools with key indicators

  • Overcoming challenges in digital transformation and common pitfalls to avoid

  • Leveraging generative AI to revolutionize FP&A processes and reporting

  • Lessons learned from entrepreneurial ventures and adapting FP&A for startups


Here are a few relevant quotes from the episode:

  • "There’s no perfect tool; focus on understanding your needs and defining negotiables versus non-negotiables." - Charlie Liu

  • "Data is the foundation of FP&A. Clean, accurate data is essential for meaningful insights." - Charlie Liu

  • "We’re at a point where AI can handle repetitive tasks, allowing FP&A professionals to focus on strategy." - Charlie Liu

In this insightful episode, Charlie Liu shared his expertise on optimizing FP&A systems and leveraging the power of generative AI. His advice resonates for businesses of all sizes as he emphasized the importance of customer focus, strategic thinking, and adaptability.

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Earn Your CPE Credit

For CPE credit please go to earmarkcpe.com, listen to the episode, download the app, and answer a few questions and earn your CPE certification. To earn education credits for FPAC Certificate, take the quiz on earmark and contact Paul Barnhurst for further details.

In Today’s Episode

[01:57] - Introduction to the Episode and Guest

[03:50] - What Does Great FP&A Look Like?

[09:48] - Lessons from an E-Commerce CFO Role

[17:30] - Why Planning Tools Matter
[23:39] - Key Takeaways from OnPlan Experience

[30:38] - Overcoming Digital Transformation Challenges

[37:56] - Framework for Choosing FP&A Tools

[45:51] - The Future of FP&A with AI

[54:17] - Closing and Final Thoughts



Full Show Transcript

[00:01:57] Host: Paul Barnhurst: Hello everyone. Welcome to FP&A tomorrow, where we delve into the world of financial planning and analysis, examining its current state and future prospects. I'm your host, Paul Barnhurst, aka the FP&A Guy, and I will be guiding you through the evolving landscape of FP&A. Each week we welcome industry thought leaders, practitioners, and experts who share their insights and experiences, helping us navigate today's complexities and tomorrow's uncertainties. This week, I'm thrilled to welcome my friend Charlie, Charlie Liu. Welcome to the show.


[00:02:37] Guest: Charlie Liu: Super excited to be here. Thank you.


[00:02:40] Host: Paul Barnhurst: Yes, we're really excited to have you. So let me give a little bit about his background and then we'll jump into things. So Charlie is the founder of Monte Carlo Consulting, a firm specializing in FP&A systems and fractional CFO services. He has over 15 years of deep experience in the corporate performance management space or, as I like to call it, planning tools. Charlie has built his reputation for helping FP&A leaders across industries and company sizes, find the best tools to optimize their FP&A. His expertise spans consulting, product and sales, giving him a unique ability to bridge both the technical and strategic needs of clients with his data driven background. He brings a fresh perspective to FP&A systems, empowering teams to drive better insights and decisions. Charlie also advises CFOs and startups on everything from pricing strategies to go to market plans for fun. Because he doesn't have enough to do with his full time business he likes more. He's laughing already. All right, first question: what does great FP&A look like to you, Charlie?


[00:03:55] Guest: Charlie Liu: Great FP&A for me, I think the first piece is understanding the goal. What you're here for, right? A lot of it is having a good understanding of the business. The goal is I think the best way to describe it is business partnering. Right. You're not accounting, right? You're working with different department heads. Right. Engineering research sales. Right. You are there to give them the data they need, but also working with them to give them the analysis as well as the budget so that they can do what they need. Right. For me, part of it is being directionally correct so that you can make better decisions. Understanding what happened in the past. Right. Sometimes a lot of businesses, especially the smaller ones, they kind of confuse between finance and accounting, right? Two very different things. Accounting is a system of records. They are figuring out what happened in the past. But FP&A really takes that data, tells you the story so that you can figure out where you're profitable, where you're losing money. In which direction you should go, so that you can better drive the business through a combination of understanding the business holistically, partnering up with different department heads, and leveraging what data that you have. That's the main piece. The automation and everything else, I think, is the second piece that comes after that.


[00:05:10] Host: Paul Barnhurst: I would agree with what you said there. Most important is the business partnering and helping the business leverage up. And it's important to separate. Accounting is backward looking and that's very important. FP&A can't do their job right without good financials. That's where it starts is having a clean understanding of what's happened. But as you said, FP&A is all about the future. It's about where are you going? How are you going to best spend that next dollar. And sometimes that can be difficult to figure out for sure. Right. You started your company, Monte Carlos Consulting has been about a year now. Is that right?


[00:05:45] Guest: Charlie Liu: Yeah, it was a year. Basically three weeks ago.


[00:05:48] Host: Paul Barnhurst: Year? Three weeks ago. Well, congratulations on the one year and I love on LinkedIn. You have a unique title. You call yourself the Global Chief Customer Happiness Officer. How did you come up with that title? Tell us the story behind that.


[00:06:04] Guest: Charlie Liu: I think it's really simple, right? So I love this space, but I have had issues with my roles over the years. Right? Sometimes for growth or profitability, the customer satisfaction of customers gets forgotten, right? For me, I've often found that cause friction in terms of my experience in the past. Right. Let's be honest. Sometimes you're sales, you're going to have to push deals across, right? Just because you're trying to hit those targets. Sure. Services. So certain companies, they're measuring utilization, right. They want to build the clients for every hour here and there. Right. So that never sit well with me. Right? So when I started this journey, to be honest, a year ago, I didn't know this is what I was going to do. Part of it I was like, I love helping people. I love helping businesses. Back then, I wasn't getting paid anyways. I figured, let me just help people for free. I'm not getting paid anyways, right? So surprise, I realized after a certain point people want to pay you right if you're doing good work, right? So for me it was like I realized if I do good work, meaning if I help customers find the best tools, right? Absolutely. That is the focus. Right? So there's no churn, there's no dissatisfaction issues later. If we just give customer what they need on the other side. Right. What is the fractional CFO work or software implementation? Sometimes you make a little bit less, but I find that it often pays dividends and we'll get back later. Right. So that's why I constantly talk to my co-founders on my team. Customer first. Right. How do we have the 100% NPS of ten, the 100% customer satisfaction guaranteed? That is our North Star Cross organization.


[00:07:49] Host: Paul Barnhurst: Love it. And I love how you just sum that up right at the end of the day, if you do everything you can to make sure you're doing what's best for the customer, you're going to end up with happy customers. There's always the risk. You're going to end up one that's not happy. That's just part of life and business. But when you put the customer first, it just makes everything better in my mind versus how do I maximize revenue, right. Or whatever that metric might be?


[00:08:18] Guest: Charlie Liu: I think so, right? I mean, like Jeff Bezos talks about all the time, right? It's like super cliche, but if you do right by the customer, everything will follow along, right?


[00:08:27] Host: Paul Barnhurst: Yeah. And I mean and look at Amazon, they lost money forever. Now look at it.


[00:08:31] Guest: Charlie Liu: Exactly right.


[00:08:33] Host: Paul Barnhurst: He created a frictionless process and made it easy for people to get whatever they wanted online.


[00:08:39] Guest: Charlie Liu: For sure. Right. I want that to be my competitive advantage. I've seen other players using an array of different strategies, right? For me, if we do phenomenal work, they're never going to leave you, right? 


[00:08:51] Host: Paul Barnhurst: Yeah. You get a customer for life if they know they can always rely on you. Every time they need that type of service, they're going to come back to you.


[00:08:58] Guest: Charlie Liu: I love it. For me it's also when I first typically, when I start a project, one of my first questions like do you have something that you have the next day or two? What can I do to make you look good? Because the way I look is consulting. There's kind of three things. You help your customers make more money. You help customers lose money less lose less money, as in cutting costs. And how do I make them look better? Right. Those are all I can do for a services business. There is nothing else, right? 


[00:09:25] Host: Paul Barnhurst: Yeah, I think that's a good summary. It's either help them make more, help them lose less or as you said, you know, help, help make sure they're happy. Right. There's not a lot to it in a services business. I would agree with that. So I want to do a little bit of a detour before in a minute here we're going to start talking about planning tools and some of your experience there, and all you've done in the software space. You spent three years kind of in the middle of your career working as a CFO of an e-commerce company. How'd that come about? Tell us the story there.


[00:09:57] Guest: Charlie Liu: So that happened randomly. What happened was my last year together, I loved the place, loved the company. I learned a ton. Shout out to Alessio that runs the pre-sales department over there. I learned a ton. But the issue was I did my data, my master's in data the same year while I was building demo assets, trying to close deals, traveling around as a pre-sales engineer. Sure. Now I recognize you need to have balance. Back then I was younger. I thought, I can do it all right. What happened was after a year, I think working six, no, easily 80-100 hours between school and work took a huge toll on me. What happened was I basically wanted a sabbatical. I wanted to leave. I went away for a little bit. Right. So I did my time with Tagetik really well. And what happened was a friend of mine, he was starting an e-commerce business, was doing really well. Right? But he was in marketing and product person. He knew how to market and knew B2C, you know, design and create products really well. But he knew nothing about data, right? Nothing about data. Nothing about finance. Nothing about accounting. As a close friend, there's some free work for him. And then basically, I was trying to figure out what I was going to do with my life. And I want to go travel for a bit for everyone out there. I used to be this hippie backpacker, kind of just living out of a van in Australia and Bali 14 years ago.


[00:11:24] Host: Paul Barnhurst: But I think of: when I think of finance, hippies, backpacks.


[00:11:27] Guest: Charlie Liu: Exactly right. So what happened was I wanted to run away from it for a bit. And he offered me a free flight to Asia as long as I do a bit of work. I did not know that was his ticket to get in. So I flew over. Almost immediately I was absorbed into what he was doing right. And I started loving the other side. Right. Because before there was Paul, I was doing finance. I was doing consulting. I was never sitting on the other side. Right. Sure. The operations, the inventory planning. I personally set up a warehouse myself by hand, setting up the shelves three times when I was there. I got absolutely pulled into it. Right. So what was supposed to be a two year sabbatical became, I think, a week of running around, just traveling and then just helping him out afterwards. And that's how I and for startups, a lot of times, the CEO or CFO kind of that title, you kind of just do everything right. Yeah. Both you and I know we're both operators. You just end up doing anything.


[00:12:30] Guest: Charlie Liu: Right. So I built a photography studio. I knew nothing about it. Learned it from scratch. Right. Inventory operations. Fulfillment. I learned all that. And then luckily I had a data and a background around him. Right. And one of the difficult things when I was there is when you're in China. So I built a whole. In China, you don't have access to, say, Western tools because of the Great Firewall. But then your team is in China. Right now I'm trying to figure out how to use Western tools, where I also manage a team over there. It did not work. Right. So I was so grateful that I had my background with Excel, Power Query, power BI, Python. I basically built my own Frankenstein ERP system using those three things. It lasted about nine months before we fully switched to a Chinese ERP system, but that's how I got into it. Right. It was definitely. I did all the finances of the accounting, but it was also as much as an operator and operational person as well. Right. So fulfillment, all that stuff. It was fascinating.


[00:13:33] Host: Paul Barnhurst: A little bit of everything, which is typical. If you're working for a startup, you're doing everything right. Like you're doing today. I'm sure you've done sales, marketing, finance, you name it. Yeah, same thing here. Today I do a little bit of everything. It's how it works when you're either running your own thing or you have a very small team.


[00:13:52] Guest: Charlie Liu: Yeah, it's a crazy different. Paul, what was the hardest thing for you that you had to learn starting this business? The most challenging piece.


[00:14:02] Host: Paul Barnhurst: Probably the hardest thing, at least in those first few months, was recognizing that some days you'd work on a project and not be making anything, but you had to work on the business I had worked for, you know, 20 years where I'd always been billed by the hour, and since I had an hourly wage. And so it was really hard to go, oh, I didn't make anything today, but I'll be okay. Like, I kept wanting to work on billable projects because that was just human nature thinking. I got to bring in the money and it's like, no, you got to work on the business to bring in the money. So that was probably the hardest adjustment for me.


[00:14:34] Guest: Charlie Liu: I can see that, so I do coach a few fractional CFOs these days, and it's the same problem that they're seeing when they get started. And I often tell them to try to find something that's not tied to an outcome, meaning revenue or closing deals. Right. I try to tell them, try to find something that you can measure that's process related. Like for example, we're really trying to get clients. Right. The number of deals, the number of contacts you make, the number of phone calls you make, a lot of things you learn from sales. Just focus on the process to build the business and the output will follow, right? Because even closing sales and deals, you can't control everything. There could be a deal where everything fits and then that person leaves the company. Right. You can't control that. Right.


[00:15:22] Host: Paul Barnhurst: Yeah. You know, that's a great thing. And I think that's true, especially in a business, but almost in any role. Right. We talk back to finance or FP&A, whatever that role may be, the more you can focus on process and doing your part and realizing you can't control the outcome, right? Like, there are going to be months as a finance professional that you're going to have crappy numbers. They're going to be awful. Does that mean you did anything bad? No. It could be economics. It could be business. It could be a number of things. There's times that you may have forecasted wrong, or you have to own some things, but typically its business performance. I still remember there was an analyst at one of the companies I worked at, and he came into my office and he was freaked out. He was just panicking. For the first time ever, the business had a negative EBITDA for the month. And he's like, I don't know what to do. Like, well, first, like make sure all the entries are correct. Make sure these are the real numbers and then put the story together of why it's not your fault you don't do sales. You're not the one doing the expenses. You just need to be able to tell the story of what happened here. And how do we make sure it doesn't happen again? What are the recommendations? Yeah. And got him calmed down and worked through it like you can't control. Sometimes the numbers.


[00:16:37] Guest: Charlie Liu: I love that, right. Part of it is you can't freak out. Sometimes I tell my team and I because we're pretty new. A couple of months ago we weren't doing that great like buffalo in the storm. Right? Just relax. Chill. Walk. Buffalo is one of those animals that walk straight into a storm versus away from it, right? Try to understand what is the situation. Right. That's the first piece. Understand what happened before you can figure out how to move forward. Right. Like you said earlier, for me it is how to move forward to do that first thing to understand why was the EBITDA negative right. What happened? What was the decisions and the strategies or the marketplace that got us to where we are today? Once you have a fairly good understanding, once you have enough data, right. You hear people talk about this a lot in startups. Once you have a data, then we can figure out how to move forward. Right.


[00:17:23] Host: Paul Barnhurst: Totally agree. I mean, it's a process and you have to analyze and figure out how you move, move forward. So I want to shift gears to planning. You've done a lot of implementations. I'm curious, what is it you love about working in the CPM, EPM, FP&A? People are probably like CPM, CPM, what are you talking about? But working in this planning software space, right? What is it that draws you to it?


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[00:18:44] Guest: Charlie Liu: So it's the aha moments. It's a really cool intersection of data accounting business understanding. That's why I always talk about business first, understanding of business first and then storytelling. Meaning how do we get actual insights or output from it. Right. So by combining all those, I had a luxury and was very grateful that I had an experience that allowed me to do this work. But combining those backgrounds, you get these aha moments, right? I'll give you a few examples. One was last year, not necessarily tied to planning. I was working with a gym equipment business, a chain of them. Right. And a little bit smaller. Right. So they don't have all the analytics. And what they realized working with me was they were applying this to these type of discounts across all products. And what I came to show him was applying discounts on core products like we're talking about Jeremy Clements. Right. So your barbells, your kettlebells, they're not going to change your sales volumes, but then your accessories, your supplementary products. That's where they made the biggest improvements on sales. Right. So through the analysis, what we came to realize was they needed to price things differently. So that's what I meant by combining the accounting. So we can see historically they made any difference. The financial data that we showed that the aptitude to actually purchase only made a difference in terms of discounts on more of your secondary products. They never needed to actually discount their primary products. Right. So with that understanding, right, the operators and the founders were then able to build these models with me.


[00:20:27] Guest: Charlie Liu: Right. What business could look like? Right. If we never discounted our primary products, but our secondary products and allow them to actually discount their supplement products heavier so they can increase sales even more. Right. So part of it is data analytics. Part is planning. Right. So that we can actually help them increase their sales, decrease their losses, potential losses on the cutting margins on their barbells, kettlebells, but increase profitability and sales overall. Right. That's an example. Another one for me is being a data guy and being lazy. I love helping clients get lazier. Right. So for example, a project earlier this year I was helping a client that had multitude of different systems and they had to do different reporting, right? Alvarez gap. And they used to take days just compiling the reports, the templates for reverse versus gap. If we have to add numbers back in, if we have to allocate things. It was a multi-day process. And often that's a lot of manual copy and pasting. A lot of times you have to do manual data entry, right. What happened was for me, by the end of it, it was minutes to run the report. Right. That is immediate cost saving media, because it's also the work that no one wants to do, right? It's not the fun stuff, right? So those aha moments, the controllers smile when when I saw her like how much easier it was to run these reports afterwards. That's why I do them right. That's why it goes back to the question, right? Chief global. Chief customer. Happiness officer. Right. Those are the reasons why I do it, right.


[00:22:08] Host: Paul Barnhurst: So those moments when you see somebody saving hours or improving their business, as you call them, the aha moments.


[00:22:15] Guest: Charlie Liu: Yes.


[00:22:16] Host: Paul Barnhurst: I love when I see those when I get a note from someone, hey, you helped me with this. Or you go through training. Eyes get big when they realize, oh, if I learned that I can save, like six hours of time. Yeah, you can, you could, you could automate that. And they get really excited because we've all been there with manual processes.


[00:22:32] Guest: Charlie Liu: And yeah, for sure, especially with your training around like Power Query power BI. Right. Talking about systems. Right. For me, I think it's really important for folks to start thinking like almost programmers. Your formulas in Excel are kind of like your code, right? Right. That's how I look at it, right? You can improve efficiency automation significantly. You don't have to be a proper back end developer, right. Your code is typically your Excel formulas or Power Query. These are off the shelf tools, right?


[00:23:07] Host: Paul Barnhurst: No, I mean, the reality is spreadsheets and particularly Excel, but Google Sheets and others, it's the original low code, no code tool. Yes, you are coding, but it's not like you need to learn a formal programming language. Nobody needs to learn. Object oriented programming or whatever language it may be. But you do have to. Learn a language, but it's very simple. So I am 100% with you. It really is the first. Kind of low code. No code automation tool. All right. You worked for OnPlan for several years. Unfortunately, they didn't survive. I know they ended up closing shop. What did you learn from that experience? What were some of the takeaways from working for a planning software that didn't survive?


[00:23:56] Guest: Charlie Liu: I'm really grateful I had the experience to work at OnPlan. Right. So that was another opportunity where I was number two, right. So the first knowledge hire, and especially working in a tech VC backed company, it was eye opening. There's a few areas that I learned that I take to my business today. I think one is just velocity. Right. Challenging your preexisting beliefs on how long things take to do right. And it's something I challenged my team all the time, right. Often things do not require months to prepare. Of course, there's definitely tasks that do. But it's important to start, I think, to start executing immediately and make some mistakes. If you take the comparison, if you have the way two months, do your data, do your research. I personally think for a startup, especially in my skill, it's better to start now and made a ton of mistakes by the two month mark. But you're much more comfortable, right? So that's one piece. Another tool I think is prioritization. Being a sea based company, you don't have all the resources in the world. And I mean time, I mean money, I mean people. So you have to be very, very good with prioritizing your tasks and how you invest your resources. Again, that could be a headcount. That could be money. That could be time. Right. And it's not all cases, but I think for the vast majority of your decisions, they need to be tied to metrics.


[00:25:22] Guest: Charlie Liu: That's important for the business, right? And for most decisions, I think this framework I learned back at OnPlan while doing product management was like, what are the benefits if we invest in it? What are the negatives if we do nothing right. And just let it be. And sometimes not doing anything is a decision that's okay with it, right? So really prioritization because if everything is important, nothing is important. Right. And my final one is praying is not a strategy. Praying sales will come. Praying that your prices will go up. Praying you have the capacity. None of this. It's not a strategy. And we saw this firsthand. Really bad on planet. We had a fairly large, proportionally large team in Ukraine. Right? So when the war started, that took a hit. That hit us really hard, right? One piece is you can just believe that. You can wait it out. Right? Back then, we did not make that decision. I'm glad we didn't. Right. We did whatever we could have to help the team, right? We even tried to help move. Helping, moving some of them. Right. But it also forced us to make a decision to start building teams elsewhere. Right. Trying to mitigate our risks. Right. Those are the things I really learned. Those are fond memories of me being on plan. But those were the areas I take to heart today.


[00:26:52] Host: Paul Barnhurst: Thank you for sharing. I appreciate that, and I love the prayer is not a strategy, right? Hope you want to have hope. You all want to be an optimist, but you have to roll up your sleeves and go to work. Now, anyone who's religious, one of my favorite quotes is pray as if everything depends upon God and then work if everything depends upon you.


[00:27:10] Guest: Charlie Liu: I love that.


[00:27:11] Host: Paul Barnhurst: Right, you have to do the work.


[00:27:13] Guest: Charlie Liu: I love that. I have one called. It's in Latin. It's Amor fati. Just like love. Fate, right? Things will happen. But you have to. You have to make it happen. Right. You got to work for it. Right. Things are bad. Things will happen. Good things will happen. You got to have faith. Right. You got to have hope. But you have to put in the work. Right.


[00:27:32] Host: Paul Barnhurst: Yep. And the other one I really like when it comes to strategy. And I think this is especially true, in FP&A, is we're helping the business figure things out. I had a boss who told me once he goes, strategy is about closing doors. And I've realized that as a business owner, you're gonna have more opportunities than you know what to do with in most cases. Should I go in this direction, that direction? Should I start implementing this tool or that tool? And part of strategy is knowing when to say no and focusing on what's important versus trying to be all things to all people. Right. No business that doesn't work, especially in the early days.


[00:28:07] Guest: Charlie Liu: I agree that I think I saw that exact quote from Julio a couple of weeks ago. I firmly believe that. So I had a problem, especially when I started this business. You can't, you don't have the stability. You're trying to do everything right. So I was doing advisory, I was doing coaching, I was doing modeling. I even did data entry to try to survive, right? At some point, I realized we have something good. We have an inkling what this business is going to be. And it was time. And I'm really glad I brought in Peter, my co-founder, because he was really good at closing doors. He made me sit down and list out everything we've done since we started, and then just start crossing things that we don't do, and that is not part of our business for the foreseeable future. Right. Focus is really critical.


[00:28:50] Host: Paul Barnhurst: Yeah, and having the right founder is huge. I mean, you need that optimist. Visionary and you need the operator in a business. And when you have those two so much more productive, you have just the operator, you got a problem. Or if you have just the visionary, there's a reason most successful businesses have co-founders, not a founder. Now, there are exceptions. There's always exceptions. But. Right. Most big businesses tended to have co-founders. There was a team so they could balance each other out.


[00:29:19] Guest: Charlie Liu: I completely agree with it. Have you heard of something called the EOS Entrepreneur Operating system?


[00:29:24] Host: Paul Barnhurst: I haven't.


[00:29:25] Guest: Charlie Liu: It's a very unique framework. They have a few books about it, right? So typically a lot of businesses think there's a person for marketing and sales, there's a person for product and there's a person for finance or whatever. Right. But their framework is exactly what you describe you. It's not a sales or marketing because those can even be hired and trained and built later. Right. But when you're starting off, you need a visionary, right? That's basically going all over the places. Right? I want to go here. I want to create this partnership. I want to sell this. Right. But nothing gets done. Right. You need someone that can pull that person back, right? Like you said, the operator. Right. So I really like that framework. It's how we're trying to run it today. They have another one where sorry, not iOS. There's another framework for professional services. This one is kind of your strategic kind of over the place. One's an operator and one that really defines the product offerings, trying to take it to the next level, because an operator that connects everything to your accounting, to your finance, doing HR, doing your strategic meetings, they're not going to have the dedication to really refine the offering for your clients. Right.


[00:30:37] Host: Paul Barnhurst: Got it. All right. We're going to jump a little bit more into transformations. Or I might call this the FP&A episode for entrepreneurs. Right. But great conversation. I think all this relates, but I want to ask you a question. We've been hearing the term digital transformation. It feels like for 20 years and many digital transformations fail. Why do you think that is? Why do you think so many companies struggle with that, with that process of trying to transform Form themselves, and I use that word kind of loosely, but I think that is.


[00:31:11] Guest: Charlie Liu: I mean, that's a big part of what I do. My big part is to try to make sure the business don't fail when they go through this process. Right. I think there's two sides. One is pre-investment, one is post-investment. Right. I think a lot of companies, CFOs, finance leaders, they don't do enough preparation or homework before they start this process. They know there's a pain point that triggered them to decide, okay, we need to go find a tool. We need to go through this process, this transformation process. Right. But they haven't documented enough what they're really trying to do. Right. And that's why I help a lot of businesses like why are we here. Right. What is the definition of success? This is something I learned from a mental health coach. And what are your non-negotiables and what are your negotiables? There is no perfect tool like, you know this better than me, right? I learned from you that there's 150 tools out there. There's a tool. There's a time and place for all of these tools, right? But none of them is perfect for everyone, right? So you got to make sure you know exactly what you're trying to solve. And what are the nice to haves, right? Once you have that, then we can start figuring out what are the areas you have to see during a sales cycle, what are the things you have to learn, or what are the things you have to research internally? You also have to get in alignment of buying across the board.


[00:32:30] Guest: Charlie Liu: I've seen a ton of times where the analyst might have wanted, but the senior executives did not, or vice versa. Right? And that can lead to disaster, right? So I think part of it is that doing your homework and priming yourself properly so you can make decision on this investment and embrace it. The second part is after you implement, there's also different reasons after you purchase during the onboarding there's a number of different issues as well, right? A lot of companies don't realize everything is driven off data, right. If you're accounting, data isn't the greatest if you're. We're starting to see our data is not great as that is a part of the process. You have to clean that data up, right? A lot of customers come talk to me. They think I'm going to solve everything for them, and I'll be honest and I'll tell them I can't. Right? These are certain things we can fix, but you also have to fix these other issues to really get value out of this process. Right? You might have to do some clean up of your accounting, your charter account. You might have to invest some resources in terms of cleaning up and changing how you set up your CRM system.


[00:33:34] Guest: Charlie Liu: Right. And then another piece I see is I see this across the board, both companies and other implementation shops. There's just not enough great documentation. No one wants to do them. No one wants to read them. And what happens is people leave. Churn is going to happen on both sides, right? Right. And if you don't have great documentation, you don't have longevity. And the beautiful part about 2024, I find, is it removes the barrier to documentation. What used to be really painful about it is the actual process of documenting it, but also the process of getting the stuff out. No one wants to read a guide, but with ChatGPT and AI and all these LLM models these days, there is no better place, right? They can help you write documentation and they can help you get the answers you need, right? Those are kind of the areas I see in the benefits and things we try to strive to improve. Right. We're not doing it today, but we're doing a little bit of today. But part of it is we definitely want to get better. Next year is how do we leverage these LLM models and how do we give clients great documentation training so that even if the whole team switches right, someone can still carry and adopt and maintain these processes later, right.


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[00:36:04] Host: Paul Barnhurst: Yeah, and I hear you. Great documentation is huge. I really like how you said spending more time up front in that pre-sales process, really understanding what you're wanting to accomplish and being realistic. And that's where you, as professional services help, have to help them realize, like you said, hey, these are some things you're going to have to fix. I can't fix these for you. The tool is not a magic bullet. It's not going to change your life. I always like to say it's really more about making yourself more effective when you have the right people, the right processes. You bring in technology, thoughtful technology. That's when the magic happens because it allows everybody to be more efficient. A great example is generative AI, right? If you're using generative AI, you can be more efficient, you can get more done, but you have to think about how you're going to use it. And you might have to do some work up front, like companies can't use generative AI and get good results on crappy data.


[00:37:00] Guest: Charlie Liu: Absolutely. 


[00:37:01] Host: Paul Barnhurst: A lof of that's true with the bringing in a planning tool. If your chart of accounts is a mess, you're planning, still going to be a real challenge. Just because you moved it from Excel to a tool doesn't mean you've fixed that problem. You're still going to have it.


[00:37:16] Guest: Charlie Liu: I completely agree with it. Things are just much easier if you fix it upstream, right? This is why sometimes I have those difficult conversations that I wasn't allowed to have back when I was on a sales team for some of these vendors, right. I will look at the data and tell them we're going to have to fix the chart account, or else we're just migrating this awful mess into another tool, right? For certain projects we have, we're okay with it, right? Part of our process before we even touch the tool is we'll review your data, figure out a process. What do we have to clean? If it's a charter account restructure. Right. I'll work with you as part of our professional services offering so that you are set up properly once we start a tool. Right?


[00:37:56] Host: Paul Barnhurst: Totally agree. So where do you start when you're advising customers to come to you and they're like, hey, I want to implement a planning tool. I need to make my life easier. What's the process you take them through? Is there a framework you use or how do you get started with them?


[00:38:09] Guest: Charlie Liu: There is a structure and framework of questions I go through, but I often say I put on with my fractional CFO hat on, right. I really want to understand your business, which is why for a lot of my own customers, I'll put in days before I even recommended tool for them. Right. Really figure out their business, their pain point. Sometimes they don't need a tool. I'll tell them, like you don't need a tool, right? It's a process situation. You're not going to fix this by bringing a tool in. There's a client right now, for example, I've spent probably close to a week with them at this point. We've finally agreed that they just need to upgrade their ERP system. An FPGA system is not going to fix the issue they have. We can probably do it, but it's not going to be a great experience. They're not going to be able to maintain it. No one's going to have a great time When I told him, I told him you should upgrade instead of 60 something odd. Quickbooks instances, QuickBooks desktop instances. Let's get you onto sage or something else, right? Or campfire, one of these tools that's going to help you manage that, or even if you're big enough. And then we'll apply that planning reporting layer around it. Right. It's not meant to solve your accounting issue.


[00:39:18] Guest: Charlie Liu: Right. But in terms of framework, what I often ask is my first question is what is this externally or internally motivated? Externally as in you have to produce reports for IRS reporting, regulatory reporting for your VCs, your boards. Right. It's our internal management. Right. It's to get forecast DVA so that you can better manage the company. So that's my first question right. And based on that right then we can start defining your criteria of success, your definition of success. Right. And that's where I really start questioning what is really important, what is not right. And if armed with that knowledge plus my understanding. Of their business, their data, that's when I can start putting together a checklist. They should check or a checklist. They should look for doing demos on a sales cycle in terms of looking for these tools. Right. And that's what I keep saying, that customer happiness officer. That's just really important. Just typically when I was working as a part of these vendors, we didn't have the luxury to spend that much time to really understand and prospect. Right. Because Caac is insane. If you listen to what I'm talking about, the Caac, it's just not realistic for a larger business. But for us, we're really grateful that I can do that today.


[00:40:33] Host: Paul Barnhurst: Yeah, I know, I appreciate you sharing that. Well, next question I want to ask everybody has to try to figure out when do they implement a planning tool. Any advice there? Is there a size you typically think of complexity. What's that sign that hey, maybe we need to look at a different way of doing things. Maybe we need to consider bringing in a planning software. Where do you think that point is for most businesses? Obviously there's no perfect answer here for sure.


[00:41:03] Guest: Charlie Liu: No, absolutely. It depends on the circumstance. I look at it as two categories. I think for the smaller, sophisticated, less sophisticated businesses. So I'm talking about your startups, your mom and pop your seed companies. I don't think they need to invest in a bigger tool. What they need to have is enough data so they know how their business is doing, and then they're able to build some sort of plan budget forecast. So they are directionally correct. I think that's the key here. Don't invest too much time or resources building a very accurate system because you're small. You should put all your time into product sales, right? Not investing in FP&A. Right. So in that scenario. It really depends if the founders or if you have someone that has some decent enough experience to be able to build a back of the napkin kind of model. I don't think you need a tool. On the flip of the coin, you also have founders that are purely sales, purely engineers. They don't have that background. It's not enough for you to go hire someone. I don't think that needs enough for you to go hire someone. In those cases, there's a bunch of tools that ranges from 50 to $300 a month. I think those are really helpful. It gets you directionally correct. You know how your business is performing on a departmental basis. You can kind of see your profitability so you're not ignoring your numbers. So that's how I see the first category, the larger ones.


[00:42:29] Guest: Charlie Liu: Right. The tools I work with. Now the question for that is the way I look at it is do you have to budget to spend on. I usually say 40 to 50,000 on a tool. Right. That's typically a company that's doing 30 to 50 million or above. And I think that's usually when it starts to make sense. You have to budget, so that means you have the time and the resources to do a project like this. You're also big enough where these kind of insights, these tools are. The ROI is high enough, right? And that's where I think of it, because there is a breakdown of the tooling and professional services. Right? I'm definitely a little bit biased because I run a PR firm in this space, but I do think FP&A is just so free. If you're coming from Excel, right. Which is the most free tool out there, right. If you don't have a good guidance, a good design on how to implement these tools, oftentimes you can have a bad time, right? So that's how I kind of break it down. You're either big enough that you have a budget for this, or small enough that you just need something directionally correct. In those cases, if you know how to build a decent back of the napkin calculation model, you don't need a tool. But if you don't, it's really important that you have that visibility. And it's probably cheaper to get a tool than to get an actual hire, right?


[00:43:42] Host: Paul Barnhurst: Got it. Thank you. I appreciate you sharing that and totally agree. It's very different for a startup or a fractional CFO looking for a tool to manage multiple companies. Or as you said, the 30, 50 million or 100 million or whatever. I had a friend that, you know, it contributed to him leaving. It wasn't the only reason, but he worked at a company that was a billion plus, and it was all in Excel. It was just a nightmare. Right. That's big.


[00:44:09] Guest: Charlie Liu: I can't imagine.


[00:44:10] Host: Paul Barnhurst: Global multi entity billion plus business. And I know of a few that have done that and. Sure. Can you do it. Yes. You can do almost any size of business in Excel with enough discipline. Should you is the question with just Excel without the database or something around it? I would argue no. You're just asking for pain. But you know, everybody has to choose what works for them.


[00:44:35] Guest: Charlie Liu: Yeah, absolutely. Right. You can get pretty far. And it is a problem that you can throw enough manpower at it to throw enough heads to solve. But it comes to a point, especially for a larger business, to question not just the cost. Right? Because I've, I have advised international corporations where they have resources in South America, India, the Philippines, where they're telling me I can get a resource for 25 K that is cheaper than a tool. Right. So I agree. I tell them I agree it's monetary wise, it's a cheaper investment. But I asked them what about the accuracy and the time. Right. If it takes you a week and a half to get a report, that's a week and a half that delay that you have in terms, of course, correcting or managing the current month. Right. It's not just a monetary investment. Right. I see companies that take three weeks to get their reports out. Well, this month is done right. If you don't know how you're doing, you have three months in. Right.


[00:45:33] Host: Paul Barnhurst: Yeah. If you basically don't know how you're doing till the next month is pretty much over, it's really hard to course correct. So there is definitely a time component beyond just the dollars you spend. Totally agree. Want to talk future a little bit? We're FP&A tomorrow after all. How do you see planning software changing going forward with generative AI and everything going on? Where do you think we're headed?


[00:46:00] Guest: Charlie Liu: We're really excited. I'm really excited for it. I use ChatGPT on a daily basis, right. So even today I see finance being different. A couple of years ago I had to write a ton of VBA Python, write SQL Power Query for everyone out there. You don't have to do that anymore, right? You can get power, you can chat GPT or any of these other tools to do most of the heavy lifting for you, right? So the way that I see in the future is I think things are going to change drastically. I think for a vendor out there, you have to really embrace AI. There's three sides, three aspects. I think that's going to play the biggest influence one is data. Data cleansing and mapping. I've always believed half of the value that these tools offer is just creating a really strong data warehouse. I don't like to use that tool because if you compare it to like a product based or engineer based data warehouse, they're much more sophisticated, much more complicated, right? So for me, it's a data warehouse lite for a finance person. Right. So but you're still talking about three, five, 15 different systems that you can connect to.


[00:47:11] Guest: Charlie Liu: And I think AI is going to make a big difference in terms of helping you clean that data, map the data so that you have one source of truth, right. That you can act quickly, rely on, get the information that you need. The second piece is, I think, the modeling and the report. I think a couple of years from now, it's you don't you should not be really building these reports, these models yourself, right. These models should definitely be strong enough that you should really be business first. This is why I often tell FP&A folks really focus on understanding the business, right? The economics around that. And then you can build a good model afterwards. But the fun thing, I think what's going to happen is that building the model that's largely going to disappear, right. You should just be able to interface with the system, tell it how the business works, tell the strategies you want to implement next year. And I think these tools should be able to build the models for you, right.


[00:48:11] Host: Paul Barnhurst: Be exciting to see how they do that. You know, lots of different opinions. On one of my shows, Financial Modelers Corner, I asked, you know, will AI build the model for us? And most people say, yes, and you still need the human judgment. So no doubt it will help us. It'll be really interesting to watch how much it does versus what we have to do in the sense of that human judgment or, you know, some technical. But I agree with you. It's going to change. It is changing and it will continue to change the way we work.


[00:48:39] Guest: Charlie Liu: I think the judgment of design is never good. I'll give you an example. So I haven't built like for everyone out there, the models you've gotten from me, I haven't built the formulas from those in a while. But however, I'm the one that's talking to you. Understanding your business, your strategy, your drivers. What happens is I boil that down to a design, and then I have a team that can do it right. The way I see it in a couple years, that first part, that's not going anywhere, right. But that building, that model, the formulas, I think that's what's going to be replaced fairly quickly. I'm really excited for that because there's just so much faster, so much more accurate. Right.


[00:49:15] Host: Paul Barnhurst: Makes sense. All right. We're going to move on to some of our standard sections. I have a couple for questions we'd like to ask all our guests and then some more personal get to know you. So number one, what is the number one technical skill FP&A professionals should master?


[00:49:31] Guest: Charlie Liu: I think you should definitely try to learn about data. About data a little bit. Try to dabble with SQL and Power Query, things like that. The reason why is he needs some foundation. For example, if we want to leverage ChatGPT or LM models to build a formula for you, you need to at least understand how they work, right? So I think by learning that you're going to get better at prompt engineering, you're going to be able to build models faster. But the other piece I think is because in today's world, we're working with so much data, you need to understand what data sources you're pulling. One of the key parts I do as an architect for a lot of projects is trying to understand going backwards from the client's requirements. What are the actual data sources we need? Right. So understanding that you're going to be able to build better models, better reports, better insights, but also if you understand data and structure and tables, you can start building Excel or Google Sheet models, almost software like you have data storage tabs, you have drivers, you have calculation tabs that allows you to build more scalable solutions that are also simpler and easier to maintain.


[00:50:39] Host: Paul Barnhurst: Got it. All right. What's the number one softer human skill we should master?


[00:50:44] Guest: Charlie Liu: If you asked me a year or two ago, I probably would have said storytelling. I still think it's really important. I think being able to ask questions now, being able to run a discovery session, asking the whys behind things is more important than anything. I'll give an example. A year ago, I was building. I was helping this CFO build a very large real estate model, and I noticed that he was modeling the phone expenses per person. It was pulling teeth trying to convince him. I'm like, why are we doing this? I had to actually go get the data and show him it was a rounding error before he realized you're right. We should not be even modeling this, right? The level of detail, the time that we're putting in just was not worth it. Worth it. Right. So I think it's all about ROI, right? The time put in to get the outputs that we need, but also to build a model that's useful. I often say that I can build you the largest, most accurate model, but if no one's using it, it's not useful, right? So you have to balance between how much work you have to put in versus the usefulness. And I think to do that well, you have to get really good at asking the why's.


[00:51:49] Host: Paul Barnhurst: Got it. So we'll call it asking the why's I like it. We're going to move on to the get to know you section. When you're not working, what's your favorite hobby? Passion. What do you like to do in your free time outside of being a hippie and travel all over the world?


[00:52:04] Guest: Charlie Liu: That is kind of the main thing. Paul.


[00:52:05] Host: Paul Barnhurst: I figured as much.


[00:52:07] Guest: Charlie Liu: I love traveling, I don't know what it's called. I call it deep traveling, so I love going to a new place and spending weeks, if not months in that place. I usually try to avoid places that are a little bit too touristy. I try to pick up a little bit of language and really experience the culture. So right now that's really it, right? For me for the last year, especially, probably the next year or two. It's building the business and then basically the traveling part. Right. So I believe already someone else has already branded himself as the nomadic CFO. Right. So I need to come up with a better term. Right. But for me, it's the traveling, the experiences that come with it. Yeah.


[00:52:48] Host: Paul Barnhurst: Speaking of traveling, if you go anywhere in the world tomorrow, where are you traveling?


[00:52:52] Guest: Charlie Liu: My favorite places on this planet is Greece and Bogota. But I really want to see Argentina and Chile. My dad actually spent a couple of years in the 70s in Buenos Aires, and he tells me how beautiful it is down there and seeing some of the photos down in south Argentina or Chile, it looks like a different planet. I want to go. I want to go there soon.


[00:53:18] Host: Paul Barnhurst: Got it. That'd be fun. Haven't been there. I've been to Greece. Greece is fabulous.


[00:53:22] Guest: Charlie Liu: Greece is fabulous. Absolutely. Love the food and the water. It's beautiful.


[00:53:26] Host: Paul Barnhurst: Love the food. I agree with you. Great place. What is one book? If you could only recommend one book to our audience to read, what book do you recommend?


[00:53:33] Guest: Charlie Liu: So recently I've been fascinated. This is not my all time. This is. Recently. I've been fascinated with a book called The Boutique because I'm building a boutique company, right? I love it, it's so actionable. The author basically took his research from, I can't quote hundreds of companies that boiled down to basically action items. I kid you not, I basically follow that book like a Bible. How do we hire? How do we sell? How do we market? I don't think I'm doing anything extravagant or revolutionary. A lot of times I'm literally just full of focus following that book, I've loved that book. And for anyone out there that's thinking about building a company, I highly recommend that book.


[00:54:17] Host: Paul Barnhurst: All right. So going to wrap up here with the last question. Can you tell our audience what are the services you offer? And if they want to learn more about you, what's the best way for them to do that?


[00:54:28] Guest: Charlie Liu: Yeah. So I think we talked about a couple of times. Right. So we focus FP&A systems or software as well as fractional CFO service for smaller clients. Right. So if you need a model built out, if you need to fundraise we can help with that. So in terms of the FP&A systems right. That's procurement and implementation. We help with both sides right. Be happy to help a lot of our customers as they get to understand their needs. It might not be a tool that I partner with. And that's okay. I'll help you make those decisions and help you better educate you so you can make better decisions, right? The easiest way to find me is probably my LinkedIn, right? So just look me up, Charlie X.W. L you'll be able to find me. And that's the easiest way. I think. The funny thing is now is for a lot of businesses, especially smaller ones, your LinkedIn is actually better than your website.


[00:55:14] Host: Paul Barnhurst: There is some truth to that. As I'm rebuilding my website and I'm like, I get more out of LinkedIn than I do out of my website. I totally get what you're saying. Well, Charlie, thank you so much for joining us. I've had a great time chatting with you and talking a little bit about entrepreneurship, FP&A and planning software. It's been a great time, so thank you for carving out your time to chat.


[00:55:35] Guest: Charlie Liu: Thank you so much bro. I'm grateful. I'm super grateful for having me for being here and it's been a lot of fun. Thank you. All right.


[00:55:42] Host: Paul Barnhurst: Thanks. 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.