Reminds me of the guy that said he was going to open a dog training school called Harvard so all their MBAs would forever have to say “no… the one for humans”

On the a16z piece on the rise of the engineering / builder CFO. There are some great ideas there. But some points are viewed through a stunningly narrow lens. I find that a little unambitious given the size of the opportunity in front of us. First, two things they definitely get right: 1) AI’s ability to make sense of messy data is a HUGE inflection moment for finance. Every bit of finance transformation advice always starts with “sort out your data”. Any idea how fucking hard that is? Teams have been grinding away on transformation and data hygiene projects for years. They often move slower than the businesses they’re supposed to support. AI unlocks the potential to destroy the biggest barrier to modernization of the CFO’s office. 2) Finance engineering is real, and should be thoughts of as a new core capability any ambitious finance team needs. The days of the systems accountants being the most tech-savvy people in the finance team, are thankfully ending. Real builders at the intersection of finance and engineering are worth their weight in gold and about to get more valuable. This is exciting, especially for smart young ambitious pros. Beyond that, much of the rest of the piece only makes sense through a software industry lens. It has the energy of tech people talking to other tech people about tech companies who sell to other tech companies. (Note - for the record, I’ve worked with some of the a16z portfolio companies mentioned in the piece, who definitely have the capability and appetite to serve outside tech.) For example, the piece talks about finance going from 5% of company headcount as standard, to 2%. In my last role, we had 1.5% of headcount in finance. We weren't especially efficient, it's just a function of the headcount dynamic for the industry I was in. So, unfortunately this falls into the trap that so much commentary on finance from the software industry does. It forgets that most companies are not tech companies. And therefore, most CFOs are not tech CFOs. Software finance is characterized by being scalable with a supersonically simple P&L structure (which goes to the finance capability you need.) I think it was Ben Horowitz himself who said that the biggest difference with hardware is "you need a much better CFO than in software." Yeah ... that’s because the economics of a hardware business looks more like conventional manufacturing than it does software. Now some of this has changed lately of course, as software consumes more AI, it takes on more of AI’s economics too; token costs, compute versus human decisions, usage-based pricing. More complicated margins and planning dynamics than before. But take a petrochemicals manufacturer, as example. They are dealing with feedstock prices, energy costs, production yields, plant utilization and selling prices moving together, by the day. And always has done. Now imagine doing that across a few hundred or a few thousand SKUs. Think about the dimensional complexity that brings. That makes the story much harder to find, to tell, and then ultimately to fund. Imagine what they could do with better tooling. So when the piece says (for example) finance can look forward to a "bigger mandate”, including pricing, capital allocation and people-versus-software decisions ... I’m a bit stunned. Any half-capable CFO I know would either be in the room when decisions of that financial magnitude were made. Or beating down the door to get in. And then there’s the framing of successive CFO eras: accounting, fundraising, FP&A / business planning, and now building. They acknowledge that the dimensions of a great CFO have endured. But the framing still jars. These aren’t things that most businesses have had the luxury of choosing between. I worked for CFOs twenty years ago who were incredible at controls, fundraising and business planning all at the same time. So, when I read things like that, I don’t see an evolution… it feels more like catching up?! Now … where plenty of finance teams outside tech ARE lagging is in the software available to them. Take that multisite petrochemicals business. Give it four different legacy ERP systems and years of workarounds holding everything together. The finance team is still delivering what the business needs despite poor, inflexible software. Impossible implementation conditions. So it's much slower and more manual than they need and would like. This is where AI’s ability to work with messy data gets really exciting. Helping bridge those systems and workarounds could finally let teams make progress on problems that have defeated successive generations of transformation programs. There is a world of businesses out there hostage to the legacy ERP industrial complex. I hope the investors and builders powering the next generation of CFO Tech have those businesses front of mind. Because the TAM is far bigger than the one on their doorstep.

Pretty cool… thank you for reading ❤️

Let's talk about the much fabled zero-day / continuous close for finance teams. Today, a three-day month-end close is absolutely world class. In a complex organization, getting there can take years of transformation work, flawless systems and processes, not to mention phenomenal talent and discipline. And even then... Three days is still a long lag for numbers on something that’s already happened. So two things can be true at once: 1. Closing the books quickly is incredibly difficult to do well. 2. No matter how fast we do it, it is still unacceptably slow. Why? Strip accounting right back and every core transaction cycle starts with an economic event. Finance’s job is turning that event into something accountable and reportable. - First comes the core transaction record: who, what, how much, and when? - Then comes attribution and timing: which entity, cost center, project, or product? CapEx or OpEx? Which period? What was it actually for? - And finally comes repair and reporting: accruals, reclasses, allocations, reconciliations, true-ups, manual journals, and mappings into management reporting. The further the transaction travels without carrying the right accounting and metadata with it, the more work explodes around it. Which leads to... the Cone of Accounting Bullshit. A single economic event can be estimated, accrued, reversed, coded, reclassified, allocated, and remapped half a dozen times before it becomes useful information. Meanwhile, if we’d captured the accounting, timing, and metadata properly at source, we could have got it right once and left the bloody thing alone. The zero-day close will belong to those who invest in upstream technology and process innovation that starves the cone of accounting bullshit of the oxygen it needs to grow. I wrote more about this here: cfosecrets.io/p/is-double-en…

It’s a lot harder to do reliably than the Twitter threads and LinkedIn posts would have you believe. For smaller single person workflows it’s easy enough (which most of that content is built on) For anything with any workflow complexity it’s more about buying the right AI native tools designed to manage and put guardrails around the quirks of the process. @Meet_campfire as an ERP and @tryramp for spend management will get you a lot of the way there for most companies. Once you have accounting working well then you can start bolting on other functionality on top, but start at the core.

Been a while since I reintroduced myself. I write about CFO craft under The Secret CFO pseudonym. Initially, that pseudonym gave me the freedom to talk about the CFO world in a way I never could with my name and company attached... and I guess it just stuck. - Path: Big 4 → FP&A → Controller → Corp Dev → CFO (+ a few detours since) - Experience: 25 years in finance, more than half of those in CFO roles - Scale: Last CFO role as Group CFO in a $4bn revenue business - Specialism: Special situations. High leverage, complex balance sheets, operational turnarounds and refinancings - Transactions: 20+ M&A deals, integrations, exits, and major transformations - Industries: Mature, 'real-world' businesses. Manufacturing, agriculture, hospitality, CPG, retail. Thin margins, operational complexity, high stakes. A couple of years ago, I stepped away from the CFO seat for what I thought would be a year or so break. I had 20 years’ worth of handwritten notebooks full of things I’d learned, mistakes I’d made, frameworks I’d built, and lessons I wished somebody had taught me earlier. So I started writing them up and sharing them through my email newsletter. As Steve Jobs once said, “You can’t connect the dots looking forward. You can only connect them looking backwards.” The more I wrote up, the more I shared. The more I shared, the more my platform grew. And along the way I discovered I really love codifying and then teaching this stuff. I’d always enjoyed developing people in the teams I built. But suddenly, I could do it, at scale, for people I had never even met. I started getting unsolicited emails from people who had landed their first public-company CFO job, completed a PE exit, escaped a boardroom bear trap, or simply made a better capital decision helped by one of the Playbooks I have written. It humbles me every time. And it's addictive... I’ve now written more than 500,000 words about the craft of being a CFO. Some came straight from those old notebooks. Some emerged from trying to make sense of a career’s worth of experience. And plenty has come from what I continue to learn from the incredible finance leaders I talk to everyday. So, that’s why I’m here... To codify the craft of finance leadership. To challenge and improve the fundamental ideas. And to put that context into the hands of the humans and machines building the finance function of the next decade. It's an honor, thanks for following along.

During August, instead of a regular Playbook, I will be running a 4 week breakdown of the finances of Manchester United Football Club. If you familiar with the story, you’ll already know some of the headlines: A balance sheet stacked to the rafters with LBO debt. A 20-year ownership hold. Multiple re-financings. A partial IPO. Complex ownership and board dynamics. A whipsaw cashflow profile. A £2 billion CapEx decision. All starting with a boardroom fallout over a racehorse… But even if you don't like the sport, it is jam packed with lessons throughout for CFOs. Here is what we’ll cover: Week 1 (Saturday) - How it’s financed: Manchester United’s capital structure and how the club has survived its own (ugly) balance sheet and ownership, so far. Week 2 - How it earns: The revenue drivers, cost base, and financial operating model of a top football club. And crucially how on-field and off-field performance correlate Week 3 - How should invest: How to solve a £2 billion CapEx problem and replace a 110-year-old beloved stadium. Week 4 - The Valuation: How you might value Manchester United as an enterprise, and what that could mean for the future the ownership structure. I don't do company breakdowns very often, but if you read my series on the Peloton business a couple of years ago, you'll know that when I do, we go super deep. We're going to fillet this thing up. I've called in my friend Jason Hershman to help offset my hopeless emotional bias on this one. He is a fractional CFO and advisor to some of the world’s leading sports businesses and their investors. This is a series I have wanted to run since the very beginning of this newsletter, and it finally goes live this Saturday! It's yours for free, but only if you are signed up to my newsletter (link in bio)

‘Quietly’ has become the latest AI-slop giveaway. First the em dash. Next the ‘that’s not x , that’s y’ Then ‘and that matters’ And now it’s ‘quietly’

FP&A has no automatic inherent value. FP&A exists to help your business improve its financial performance. That’s it.... Not to produce budgets. Not to produce analysis. Not board reports. Not dashboards. Not bridges. None of those things has any inherent value whatsoever. The value only comes to the extent they have impact on actual business performance. ALL FP&A has to justify its existence through impact on performance. The good news is that this should often be easy to do. Even the most basic FP&A cycle, run well, can unlock tremendous value for a business. I bang the drum on this because almost all the content aimed at CFOs and finance teams pushes you towards a relentless quest for more in FP&A. More dashboards. More forecasting. More visibility. More models. More data. More AI. More software. More seats. More consulting work to implement the software. More project teams to fix the mess the first project team left behind. More. More More. … And yes, we are seeing the same cycle play out right now with AI. This is not a coincidence. “More” is a great message if you sell tools, commuinities, implementation work, or ‘transformation’. What you really need is better, not more. So, how do you build better FP&A? Well … that’s what this month’s series of the Secret CFO’s Playbook is all about: Building FP&A. Here’s what’s in store: Post I. (Starts on Saturday) - A personal horror story of FP&A excess - What FP&A is … really - The 7 parts of the FP&A activity stack - FP&A function vs FP&A work Post II. Breaking Down FP&A Work - Breaking Down The FP&A Activity Stack - The Impact, Value & Purpose of Each - Tangible vs Intangible Outputs of FP&A - How to spot (and kill) FP&A ‘busy work’ Post III. Building The FP&A Team - How FP&A structure changes by maturity stage - When to hire, when to automate, when to leave it alone - Centralized vs embedded FP&A - Business Partnering Reporting Lines (Solid vs Dotted Lines) Post IV. The Future FP&A Function - What AI and automation will do to FP&A in the long-term - Which FP&A work gets killed, industrialized, or elevated - Blurring lines between reporting, FP&A and corp dev - A bold prediction for the future of FP&A You can get it for free straight to your inbox in 4 weekly parts starting this Saturday. Link to sign up is in my profile or in the comments below