This week on the Expert Voices podcast, Randy Wootton, CEO of Maxio, speaks with Josh Aharonoff, CEO of Mighty Digits and Your CFO Guy, and the Founder of Modelwiz. With a diverse background that includes a start at the Big Four accounting firm KPMG, experience as a startup founder, and strategic finance roles, Josh has carved out a niche as a fractional CFO. Josh emphasizes the importance of having a robust financial model, detailing the four stages of building one. He also highlights the critical differences between traditional accounting roles and the value-add of a fractional CFO, especially for seed and Series A companies. Randy and Josh discuss actionable takeaways that underscore the essence of financial rigor and strategic planning for burgeoning SaaS companies.

Quotes

• “I think the key to having a month-end close completed in a short timeframe is first, real-time classification, categorization, reconciliations, not waiting until the next month when all the data is available to be able to do all of that.” -Josh Aharonoff [14:13]

• “The financial model should serve as a centralized hub for all the information related to what's happening in the business historically, as well as what you think is going to happen in the future.” -Josh Aharonoff [19:27]

Expert Takeaways

• The Importance of a Robust Financial Model: The four stages of creating a vital financial model, including revenue build, P&L layering, balance sheet integration, and the final stage connecting the chart of accounts to accounting software.
• Differentiating a Fractional CFO: Unlike traditional accountants, a fractional CFO offers nuanced, strategic financial guidance tailored to the specific growth needs of startups.
• Financial Operations and Month-End Close: Critical best practices for financial operations, emphasizing real-time classification, standard operating procedures, and efficient month-end close activities.
• Leveraging Excel for Financial Planning: Modelwiz, an Excel plugin that automates complex financial modeling processes, highlighting the ongoing relevance and power of Excel in financial operations.
• Engaging Content for Finance Professionals: With Your CFO Guy, Josh has built a significant following by providing daily newsletters on various finance topics, showcasing the value of consistency and engaging content.

Timestamps

(00:40) From Big Four Accounting to Startup Founder

(04:14) Lessons Learned from Entrepreneurial Failures and Consulting Success

(13:30) Automating Financial Forecasting with Model Wiz and Excel Integration

(23:19) Four Stages of Building a Financial Model

(32:44) The Importance of Budget Versus Actuals in Financial Reporting

(44:25) The Importance of Gross Margin in SaaS Companies

(45:40) Negotiation Strategies and Influencer Insights in SaaS Tech

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