Rosemary Linden more than earned her stripes in FP&A over twenty years. Her roles included VP FP&A at Alliant Insurance Services. Director of Global FP&A at WD-40 Company and at Solera.
But after two decades in corporate finance she moved to being a fractional CFO serving small businesses (typical annual revenue of around $10million) managing an assortment of responsibilities.
This episode is for anyone in finance who may be looking to escape the corporate grind and set up as a Fractional CFO.
But Linden warns it is not for everyone.
“One of the first things I’d say to think about is, do you really want to be a fractional CFO? Because that’s different from being a full-time CFO at one particular company and comes with its own challenges.”
In this episode:
- Moving from corporate finance after 20 years to dealing with “astute” small business owners as a fractional CFO in San Diego
- Why FP&A is an ideal training ground to become a CFO
Secrets for telling a good story - Getting to what you want the people in a room to “walk away knowing”
Cash flows at small companies, opportunities and challenges - Dealing with seasonal variances at small businesses
- Advice for starting your own business as a fractional CFO
- Moving to a more analytical mindset
- Difference between, strategic planning and financial planning (Case Study San Diego Civic Youth Ballet)
- My most dangerous deep sea dive, being team Excel and Ruth Bader Ginsburg
Follow Rosemary Linden on LinkedIn
https://www.linkedin.com/in/rosemarylinden/
Paul Barnhurst:
Today. Hello everyone. Welcome to FP&A Today, I am your host, Paul Barnhurst, AKA. The fp NA guy fp NA today is brought to you by Data Reels, the financial planning and analysis platform for Excel users. Every week we welcome a leader from the world of financial planning and analysis. Today we are delighted to welcome to the show, Rosemary Linden. Rosemary, welcome to the show.
Rosemary Linden:
Thanks, Paul. Thanks so much for inviting me.
Paul Barnhurst:
Yeah, really excited to have you. So lemme give a little bit of Rosemary’s background and we’ll give her an opportunity to tell you more about herself later. So she comes to us from Delmar, California. She is fractional CFO and the owner of Momentum CFO. For schooling she majored in economics and French. Interesting combination. We might get into that later <laugh>. She also earned a master’s specializing in financial and tax planning. She also currently serves as an FP&A advisory board member. So keeps herself busy. So we’re gonna start with the first question we ask everybody these days. Tell me about the most challenging, worst budgeting, forecasting exercise you’ve had in your career that you’ve been a part of.
Rosemary Linden:
Oh my gosh, there are so many. How do I pick one? I mean, seriously, when I think about this, I think about how many budgeting and forecasting cycles I’ve been through. So I’m about 25 years into my career. That means, you know, at a minimum, I’ve done this once per year for budgeting, right? But then think about quarterly forecasts. And that was at big companies. So now with my work with smaller companies, I’m handling a bunch of smaller companies at one time. So I get the, um, the fun of getting to do a budget process for multiple clients in one given year. So, gosh, you know, which one was the hardest? Uh, it’s hard to say because there are different challenges with different size companies.
Paul Barnhurst:
I’m sure there is any, maybe any particular one that you learned a lot from that was a challenge that maybe it was a really challenging experience and it was kind of a, there was a key takeaway because of that for you.
Rosemary Linden:
Yeah, I mean, I can give you a couple of examples. I think one of the challenges I had in the corporate world was we often used EPM systems, right? Like Hyperion, um, et cetera. And those systems often require external consultants to support them, right? And if you don’t have that support and you don’t have it in-house, that budget process becomes incredibly painful, right? Because things within it can break down. Maybe people don’t know how to use it. You don’t have the support when you need it to fix things. And we all know that budgeting processes, you know, have a tight timeframe. There’s not a lot of time to lose because your EPM system isn’t working the way you want it to work,
Paul Barnhurst:
Definitely can relate to that one. And it emphasizes, you know, big companies the importance of having the right resources. If you’re gonna use a tool that requires that, you know, when I was at American Express, I felt like we had a whole army to manage that backend. So I know what you’re talking about. And I had more than one conversation with different people of, Hey, we need to fix this, or we need to do that, or this isn’t working, or whatever it might be. And if you don’t have that available and you have a tool that requires it, it becomes really painful. So you really need to think through all those costs when you implement a solution’. Not just the subscription, not just the training. It’s like, okay, you know, depending on the tools, what’s the ongoing cost? And yeah, being really honest about it, not thinking, oh, we’ll just be able to do this. ’cause it rarely best case is rarely what you, where you end up.
Rosemary Linden:
That’s true. You know, I’m having a challenge right now with a newer client of mine, and their fiscal year is a little bit, it’s not calendar year end. So I’m working on a budget right now for them. And one of the biggest challenges I have is that this is a multi-state company with lots of different business entities and their chart of accounts they like to change it a lot. And that’s very difficult, you know, when you’re doing budgeting in Excel for sure, even with a system. So it’s been a real challenge to try to get them to make the chart of accounts consistent across all their entities to stop adding accounts at the last minute. You know, after we’ve developed budgeting templates and we’re like, God, we’ve gotta go back into every p and l now and insert rows for these new accounts that have been added. So, you know, another big learning there, not necessarily for me, but for them, is that you need stability, right? You can’t be changing something as foundational as your general ledger structure while you’re going through a budgeting process.
Paul Barnhurst:
I mean, it’s a good lesson in general. You need account hygiene and you need some stability. It’s one thing if you’re occasionally adding a new, like, there might be one or two you have to add during planning, but you all kind of agreed to it. It’s another if you’re, they’re adding ’em and you find out about it as you’re trying to do the process.
Rosemary Linden:
Right? Right.
Paul Barnhurst:
So I’ve been there where you’re like, oh, new account didn’t know about that. Let’s, let’s fix this report.
Rosemary Linden:
Exactly.
Paul Barnhurst:
Never fun. So why don’t you tell us a little bit about yourself, your background, how you ended up, you know, being a fractional CFO today, kind of that career journey?
Rosemary Linden:
Yeah. Um, well, like you said, I got my degree in economics. Um, that was back on the East coast when I lived in Virginia. And after I graduated, I moved up to the, the DC area and I worked for Arthur Anderson, which back in the day was a big five accounting firm. The travel there, you know, living out of a suitcase for six months of the year did not really agree with me. And so I left and I got my first FP&A job. Um, I then kind of stayed in the corporate world for almost 20 years working for a number of different large, mostly public companies. So leading the FP&A teams of businesses like Quest Diagnostics or WD 40 Company here in in San Diego. Um, the corporate world is hard. I think a lot of people know that. And, um, I really didn’t have the kind of work life balance that I wanted.
I felt like my whole life was centered around work. Um, and I saw a need in the small business community. So here in San Diego, there are a ton of small businesses, and I’ve noticed that, you know, many business owners are very astute people. You know, take a, take a doctor of a medical practice, for instance, that is a well-trained, intelligent person, but they don’t necessarily have a finance or a business background. And so that is why, you know, being a fractional CFO in this area is really great. Um, so after about 20 years in corporate finance, I decided to start my own business and I started after seeing that need. And I’ve been at this for, gosh, almost eight years now. And it’s been a really rewarding journey.
Paul Barnhurst:
I bet it sounds like a lot of fun, and I know it’s always a challenge owning your own thing, but it also comes with a lot of reward and benefit for sure. You mentioned, you know, you lived out of a suitcase for a while with that first job and realized being on the road all the time was not the career you wanted. And so you switched into your first FP&A role and it basically stayed in fp and a, you know, till you became a fractional CFO, which involves more than just that Mm-Hmm. <affirmative>. But what, what kept you over all those years, kept you interested in FP&A, what kind of kept you working in that field versus, you know, maybe going in a different direction?
Rosemary Linden:
Yeah, you know, I didn’t actually choose FP&A, it’s weird. I didn’t have this grand plan of, look, I’m gonna be an analyst and I’m gonna move up the corporate ladder. I just found the financial analyst role that I moved into was interesting. Right? So I started off actually at MCI WorldCom, which later got acquired by Verizon. So <crosstalk>,
Paul Barnhurst:
Arthur Anderson, WorldCom. Is there any
Rosemary Linden:
Anyone in there? No, Enron wasn’t in there, but that’s usually my joke too, of like, I could’ve just had the trifecta of bad, you know, accounting scandal companies, but <laugh>, we’ve
Paul Barnhurst:
Also been at Sora, but we won’t talk about that.
Rosemary Linden:
Oh, that’s a whole nother topic. Yes, we, we can get to that. So there were a few things. I mean, it’s, it’s a very interesting field to be in. And I think one of the benefits that I can bring to my clients now is that I’ve worked at so many different types of companies, and that’s really what kept it interesting. I’ve worked at, you know, large corporations, public corporations, privately held corporations, all sorts of industries. Now with my work, I deal with lots of different forms of business structure as well. So I think just working for a number of different places with this huge variety in my work was really interesting. And FP&A is interesting in general, right? You know, partnering with people throughout the business. It’s not just sit behind a desk and crunch the numbers. It’s really be an advisor, go out into the business and collaborate with others, influence others. And that’s exciting work to me.
Paul Barnhurst:
I agree with you. I love the business partnering, the working with the business. I think that’s the, it’s my favorite part by far of fp and a. So how did you know, working in FP&A for all, for all those different companies prepare you to be a fractional CFO?
Rosemary Linden:
Yeah, I think FP&A is a fabulous training ground to become a fractional CFO. And it’s interesting because I think earlier in my career, I often saw that the path to CFO was through accounting. And I think in the last 10 years or so, I’ve kind of seen a shift there where often the path to CFO is now through FP&A, and that makes a lot of sense to me because you have to be very analytical. You have to problem solve, you have to dive deep into what we were just talking about, which is being a business partner, um, collaborating with others, influencing others. You need to learn to be adaptable and agile and be able to react to different circumstances quickly. And you, you are responsible for things like planning processes that a CFO would be involved in too, whether that’s budgeting, forecasting, or really high level strategic planning.
Those are all skills that you pick up in FP&A. Um, you have to learn to communicate to groups of people with varying levels of financial knowledge and be able to distill complex information into meaningful insight that people can then use to make optimal financial decisions. And, you know, think about that, of course, that’s what A CFO does. A CFO is also externally focused versus purely internally focused, right? So you may be communicating with investors, you’re doing earnings calls, et cetera. And at least in my experience, that was part of what FP&A did too. You know, my team used to prepare the earnings call scripts for WD 40 company. So there are a lot of skills and just, um, exposures that you get in FP&A that I think really prepare you well for a CFO position.
Paul Barnhurst:
I would agree. We’re definitely seeing the switch and had on on an earlier episode, Jack McCulloch, who runs the CFO Leadership council’s, written a book about CFO and a few years back he predicted that, you know, most CFOs would come from FP&A in the future. And he goes, I was a little early on that, I think by about 2026, that’s where we’ll be now. This is, I think last year when I had ’em on. And so we’re, we’re clearly seeing that trend because of the strategic nature . And the fact that finance is much more viewed as a strategic partner than just a regulatory or compliance function that, hey, make sure the books are done right. Keep me outta jail. You know, that old view of just make sure we everything is processed correctly too. No, you’re a critical part of how do I make sure I’m growing? How do I think about strategy? How do I ensure my investments are really the right decision?
Rosemary Linden:
Right. And even capital allocation, you know, that goes along with that. These are all things that you have to think about in FP&A and you have to think of as a CFO too. I mean, part of what I love about my work, again, is that it’s so varied. I mean, one day I could be helping a client convert a 401k plan the next day I could be helping a client prepare his business for sale. The next day I could be doing something traditional like budgeting and forecasting or data warehousing, business intelligence, creating dashboards, et cetera. These are all really interesting things.
Paul Barnhurst:
Yeah, it definitely has a lot of variety. And it even more so when you’re working with different companies all the time. Mm-hmm. <affirmative> what kind of tasks you’re getting. One thing you mentioned I’d like to just kind of get your thoughts on is you had talked about, you know, one of the things we have to be good at in fp and a is distilling complex information down to a story that we can tell. But in a way we can help make decisions and get it across. You know, any advice you can offer to the people who are listening. How do you do that? How do you think about distilling that in a way that really helps the business understand? Because I think that’s one of the areas we most struggle with, especially early on in FP&A, is how do you tell that story? How do you make it, you know, visual and really work for the business, getting caught up in telling it from a finance lens, which is not what the business wants.
Rosemary Linden:
I mean, I think you have to think about the impact on the business overall and take, you know, a large quantity of information and ask questions like why, you know, not just what happened, but why did it happen? And use that information to craft a story. And you can strip craft a story in a narrative, right? You know, typically with management reporting and analysis, you’re gonna do variance analysis every month. You’re going to, um, set forth a narrative about what happened. But you also do that visually, you know, with executive dashboards, charts and Excel, et cetera, to be able to really get that information across to someone who doesn’t necessarily have that finance background, doesn’t necessarily wanna pour through financial statements. But I think it’s important to just take a step back and like, you know, consume all of that information that’s in front of you.
And then think about how to pare it down and what is most important, you know, what do you want the people in the room of that meeting to walk away knowing and doing? Right? I always talk about how reports are not good at all if no one takes action from them. You know, why are you bothering to prepare reports and analyses if people are just going, oh, yeah, I got this report from Rosemary. Great. Uh, let’s move on to the other thing. Um, but really thinking about what the big picture is and being able to communicate that story to executives and have them leave the room and go, okay, I know what happened and I know what I need to do next.
Paul Barnhurst:
I love that how you talked about the, think about that. Why first, make sure you’re thinking the visual, the narrative, the whole picture when you bring that together. Because it’s easy to get caught up on just focusing on one thing or the other. Often it’s the analysis and then we rush to put the presentation together,
Rosemary Linden:
Right? And, you know, there’s that analysis paralysis that we sometimes suffer from, you know, going too deep in that and getting stuck. Um, but yeah, you still have to kind of take a step back and look at that big picture and, and think about what that story is that you wanna tell. Yeah.
Paul Barnhurst:
I know as a fractional CFO, you work with a lot of small mm-Hmm. Smaller companies, maybe some mid midsize. And, you know, cash flow is critical. That’s a component you’re forecasting all the time. So can you speak to the role, you know, kind of being a fractional CFO around cash flows? I know it’s often very different than large company traditional FP&A roles.
Rosemary Linden:
That’s true. And I’m, I’m curious, I almost have a question for you too. In my experience in the corporate world, I was working for really large companies. And so those companies typically had their own treasury departments. And so, to be really honest with you, I didn’t do a lot of cash flow forecasting when I was in the corporate world. It just, you know, there were other people that did that. Certainly the P&L forecast was something that, that treasury was interested in, but I didn’t really have to do much of it. So, you’re right that it’s a different situation with smaller businesses. And the businesses I typically serve in general, the smallest ones will be about two to 3 million in annual revenue. I would say more typically they’re probably in the $10 million mark, but I, I have some clients right now that are closer to a hundred million.
And so that’s a big span too, right? Their, their needs are different. But what I see most often is that business owners have a bad habit of thinking, okay, I’ve got all this cash in the bank, right? Everything’s fine. I’ve got this big bank balance. But what they forget is that’s a point in time, right? You know, that’s not what their bank balance is gonna look like three months from now, six months from now. So with my clients, I do, to be honest, try to, uh, steer away from ones that are really having cashflow problems, um, that are having trouble paying their bills because, hey, frankly, I wanna get paid too. Right? Um, and I’ve had some problems with that in the past. Um, but cashflow, I always try to maintain a forecast. I mean, fortunately, most of my clients don’t have cashflow issues. What they do typically deal with are seasonal variations.
So, for instance, I deal with a lot of medical practices and I’ve got one medical practice that gets a really large bonus, um, each year. And that happens at one time of the year. So throughout the year, the rest of the year, they’re doing well. They’re not, you know, depleting cash necessarily, but we’ve got this big influx at one time of year that we will use to then invest in other things. So we have to plan for that. Um, and with some smaller companies, you know, they just don’t manage their cash well. They haven’t had the discipline in the past of having a cash forecast. And so they’ll say to me, Hey, you know, like I have these seasonal variations. Sometimes I don’t have enough cash. Sometimes I have too much. And that’s when I go back to that importance of the cash flow forecast, right?
You need to know what’s gonna happen 13 weeks from now, six months from now, so that you can plan and say, Hey, it looks like I’m gonna have a deficit in a couple of months. What do I do? And so some of the advice I give clients, there are lots of ways to improve cash flow, but certainly having a line of credit, for instance, before you need it, is very helpful. Because if you need it and you’re going to a bank, they’re gonna say, you know, no way. We’re not giving you a line of credit when you’re, you’re struggling right now. But having things like that available to you, having sufficient cash reserves built up, you know, I talk about emergency funds with smaller businesses, almost like you would talk about them with, um, individuals, right? There’s, it’s important to have a certain number of months of operating expenses kind of stored up, and then also have those backup sources, like lines of credit.
Paul Barnhurst:
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Really good advice there. And much like you, I did very little around cashflow, you know, working for large companies during COVID got into it a little bit for obvious reasons. Yeah. Uh, I was working for a company that, uh, most of its revenue came from automotive transactions. And if nobody’s driving, there’s not a lot of accidents.
There’s not a lot of claims be extremely tight on cash. And so there was quite a bit, you know, we helped with there. And then I dealt with cash a fair amount when I supported a product. American Express Travelers checks. And that was because we invested all that money. So it wasn’t your traditional cash flow, it was more understanding what’s the investments, what do we think the in engagement rate will be? You know, do we have to sell bonds to cover in catchments? You know, when do they expire? All those type of things. ’cause that was pretty much our revenue. Yeah. Our revenue was all that, all the liability money that we invested. That was a really totally different business to model. But those were my experiences with cashflow. ’cause I work for large companies like you, right? If you work for a smaller company, you’re building a three statement model. That’s why I always laugh when people are like, I had someone say, the most important skill you can learn in FP&A is a three statement model. And I respond to with, I’ve never built one in my life. Oh. ’cause they start, they work with all startups.
Rosemary Linden:
Uhhuh, <affirmative>, alright,
Paul Barnhurst:
Startups, you should be doing that. And
Rosemary Linden:
You know what I find too, just working with, with more junior employees, and I also do a lot of mentoring of undergraduate students in finance. And what I find is that everyone understands the P&L right? And then the balance sheet is kind of the next thing that, that analysts typically understand. And I’m not saying that analysts don’t ultimately understand cashflow, but I think the statement of cash flows is probably the, the least intuitive one to understand. Especially when you’re looking like the indirect method that, that most large companies are, are using. It’s just hard to get your head around, okay, well what does that change in AR mean or the change in accounts payable mean, and how does that affect my cash flow? Because in some ways, you know, the way it’s shown on the cash flow statement, it can be confusing. You know, my accounts receivable went up, is that a good or a bad thing? So it’s just, it’s hard for analysts to kind of understand this, I think, when they’re newer. But over time you certainly pick up those skills. And if you’re working for smaller companies, yeah. It’s really crucial.
Paul Barnhurst:
Yeah. I, I agree. It is, it takes a little while to get used to it because it’s, it’s a derived statement. Yeah. You know, it’s not something, it’s not one that you just get the transactions and it’s rolled up and here’s your statement. Mm-Hmm. <affirmative> a lot of times you’re creating it. Yes. And so you gotta, you really, uh, that’s when you show, if you really understand your P&L and your balance sheet is when you can start building a cash flow and getting all the tie out. ’cause you really have to understand the intricacies and okay, what does this line mean? What does it mean to cash? What does this number change mean? Is that an up or a down? And we’ve all been there where you get done and the balance sheet doesn’t balance. Right. Yeah. I’m guessing you’ve had that experience.
Rosemary Linden:
Yeah. Yeah. I mean, with, with smaller companies sometimes, you know, if they’re not on accrual basis, I can also give them just the direct method, which is really easy to understand, right? Here’s your, your income, here’s the money going out, there’s what you’re gonna be left with at the end of the day. So that’s really simple. And business owners that don’t have finance backgrounds certainly understand that better than the more complicated or standard way of doing things.
Paul Barnhurst:
Of course, yeah. If you’re on a cash method, it makes it really like, here’s your burn rate. It’s just, it’s all pretty straightforward. Yeah. No, I’m on a, I’m on a cash method these days. I’m not big enough to deal with the h, accrual. So Yeah. Um, next question here. You know, we, I’ve had a lot of people reach out to me. It’s become much more common for people to wanna kind of be fractional advisory services. Mm-Hmm. <affirmative>, whether you wanna call it fractional fp a Yeah. Fractional CFO. What advice would you offer to those listening who think, you know, one day I’d love to kind of run my own advisory services type business, someone in FP&A, what advice would you give them?
Rosemary Linden:
One of the first things I’d say to think about is, do you really want to be a fractional CFO? Right? Because that’s different than being a full-time CFO at one particular company and being a fractional CFO comes with its own challenges. You are dealing with, you know, multiple different companies, often different industries, different forms of business structure. Again, and it’s a lot to wrap your head around. I mean, I think we both know that to be really effective in FP&A, you need to understand the business, right? You can’t walk in on day one and make some huge impact. Right? Um, so I think understanding the differences between what the, the work is like for a fractional CFO versus a CFO of a single company is something to think about because it is a lot to, to keep track of and you need to be very organized, you know, have good note taking systems, et cetera, so that you know what’s going on with each of your clients at all times.
Paul Barnhurst:
That’s really good advice. And I love that you started with, you need to know if that’s what you wanna do. Yes. It’s what I tell accountants, like, I wanna get into FP&A, are you doing that? ’cause you really want to get closer to the business and that’s what you enjoy. Or you just think it’s a natural progression in your career and you’re not gonna like it. Right? So that’s kinda, you know, starting with, you need to make sure you understand the differences. ’cause some personalities accounting Mm-hmm. <affirmative> is what works for them and it doesn’t make sense for them to go into fp and a, just like some personalities could be a great CFO and might be a terrible fractional CFO or vice versa.
Rosemary Linden:
Absolutely. And you know, another thing that I would say, and this may be a little bit controversial, is that you need some
Paul Barnhurst:
I like controversial bring it.
Rosemary Linden:
Yeah. <laugh>, you need some good solid experience. You know, I mentioned that I spent almost 20 years in corporate before I retired, so to speak, from that world, and started working with smaller businesses. What I’m about to say is a little bit controversial, which I think is that you need to have at least 10 years of experience to be calling yourself a fractional CFO. And I think probably even more, you also need to have more than accounting background. It’s not that accounting isn’t extremely important, but there is a bit of a different skill skillset between accounting and finance. So I see a lot of people calling themselves fractional CFOs when they don’t have any financial background whatsoever. And it’s a common thing where a prospective client will come to me and say, I have a CFO, but they’re not telling me about, you know, my profitability of my customers, my lines of business, this, that, and the other thing.
They’re just, you know, giving me a financial statement at the end of the month. Well, yes. You know, that’s not a surprise to me. That sounds more like a bookkeeper, right? They’re recording transactions every month, they’re giving you some reports at the end of the month, but they’re not doing financial modeling, they’re not forecasting, they’re not helping you make optimal business decisions. So get that finance experience going from accounting to a CFO, you know, without the financial experience is, is a little harder to make that move. What do you think about my at least 10 years? You know, <laugh>,
Paul Barnhurst:
I definitely think you need some solid experience. I think some could be good with less than 10, but you need years. Yeah. And you need some finance experience, not just accounting. You know, I often have similar conversations to you where I’m talking about it. I go, if all you’re getting is reports and bookkeeping, if you’re not getting some strategic, some advice and you’re paying for advisory services, you’re overpaying.
Rosemary Linden:
Right?
Paul Barnhurst:
Because you’re paying, you’re, what you’re getting is bookkeeping services. Mm-Hmm. <affirmative>. So if they’re not giving you that, you need to rethink your strategy, maybe who you’re using. I’m a hundred percent with you. And I think there’s been a, with this substantial increase in people entering this space, there’s a lot that’s now sell themselves as fractional that I don’t think they’re really able to give the advice and services people need. So you need to make sure whether it’s 10 years, eight years, 12 years, you need whatever that number might be, you need solid experience.. And you need more than just accounting to, to make that transition.
Rosemary Linden:
Again, FP&A we talked about this more at the beginning of this podcast. It’s so, it’s such a great training ground because you again, are working with so many people throughout the business. You’re looking not only internally but externally as well. Um, you are learning so much about other parts of the business. I mean, you’ve seen in some cases that when a company doesn’t have a COO, sometimes the CFO will oversee departments like IT and HR and I, I get that because like a lot of my work with small companies, it really crosses over into the HR realm sometimes, you know, compliance issues and making sure they don’t get sued by employees for not following, you know, late labor and wage and hour rules, et cetera. Um, but FP&A is great to, to really pick up these skills and the ability to influence and work with other people to then go down the path of CFO.
And in my career, I mean, I started from financial analyst and then I kind of climbed to the, the FP&A ladder until I was VP of a billion dollar company and working crazy hours while I went and got my master’s degree way late in my career. And it near killed me, but it gave me the, the nice push I needed to say, okay, I really don’t want this life anymore. You know, I, I want more variety, I want more freedom, I want more flexibility. And frankly, I also wanna be able to choose who I work with. Right. You know, in, in the corporate world, you’ve gotta do a lot of things that you might not wanna do or things that you don’t think are right. And when you’re a fractional CFO and you’re in charge, and hopefully your clients are taking your advice, it’s really great to be able to see a more immediate impact of your work together than when you’re at a big corporation where your work is impactful, but it just takes longer to turn that ship. Right. You don’t necessarily see the impact immediately or more immediately like you do with a smaller company.
Paul Barnhurst:
Yeah, no question. There’s a difference in agility, right? Those big companies move slowly, some move faster than others, but they all move slow compared to a small company, they’re much more agile. Yeah. Able to move easier. So I wanna ask you a question, and I kind of wanna get a little specific here. Often I ask people, Hey, what’s the key skill for FP&A? But what do you see as the key skill fp and a needs to be better at decision making, you know, to help the business make better decisions. What do you think are the most important things for FP&A to really help the business make better decisions?
Rosemary Linden:
I think certainly having that analytical mindset of digging into the why of things rather than the what of things. Still being able to distill information and communicate that at a high level to the people that need to know it without getting too into the weeds, um, are some things that help.
Paul Barnhurst:
I like that. I often use the framework and you say the what and the why. I like to go, okay, you need to do the what? The so what? Why does it matter Now? What, what do we do about that? You gotta go beyond the surface. If you’re just giving descriptive statistics, AI’s gonna take over your job.
Rosemary Linden:
Absolutely. Because I
Paul Barnhurst:
Data AI and it will gimme all this descriptive information. Yes. You need to be intelligent and go deep enough and think well enough to how do I communicate the, the, the story behind this, the what do we do about it? The, the insights that drive change.
Rosemary Linden:
Yes. And you know, the other thing that FP&A professionals do a lot is financial modeling. And why do we do that? Because we’re often trying to determine an outcome or we’re trying to answer some kind of question that’s then going to inform the decisions that we make. Um, so the financial and modeling or even, you know, what if scenarios or sensitivity analysis, what if, what if the price of oil goes up for WD 40 company? And that’s a, that’s a major input into the product. These are things that we’ve gotta think about.
Paul Barnhurst:
Yeah. What if, uh, oil was all sudden a hundred dollars a barrel? Imagine that. Right?
Rosemary Linden:
It, it actually was when I worked at WD 40 company about 10 years ago. And yeah, that was that, that generated a lot of conversation, a lot of modeling, a lot of, what do we do, et cetera. A lot of price increases. You name it, <laugh>.
Paul Barnhurst:
Yeah. No, it’s just like when covid happened and other things, you’re, you’re running all kinds of analysis because Right. You know, volatility on uncertainty, you want answers. Sure. And so you’re trying to make estimates and that’s where having that judgment and that ability to help guide is so critical.
Rosemary Linden:
Another thing is just sometimes being comfortable with ambiguity. And accounting, you are so precise. And not that you don’t want your numbers, especially with reports and finance to be precise and correct, but finance deals a lot more with ambiguity. We’re making assumptions in financial models. You know, we’re doing the best we can. They’re based on as good of information as we have. But at the end of the day, a lot of these are still assumptions. And you have to be comfortable that sometimes there is not gonna be a black and white answer. It’s gonna be gray and it’s gonna be shades of gray.
Paul Barnhurst:
A hundred percent agree. Rarely is there a 100% home run path where it’s like, just do this and we’ll all be rich. Right. Nice. But rarely ever is that the case. Exactly. And, and so kind of speaking to that, I think something that we’ve definitely seen over the last decade is fp and a being. What being more and more strategic, you know, and we often talk about strategic planning, which I know you’ve been involved in and financial planning. So how do you separate two? What’s the difference from your perspective of, you know, strategic planning and financial planning?
Rosemary Linden:
I can give you an a real life example too. Um, I serve as board chair for the San Diego Civic Youth Ballet here in, in southern California. And we recently, about a year ago, I led a strategic planning process. Um, and it was kind of a, a three year strategic plan. And so there, there are a few key differences I think between a financial plan and a strategic plan. One of them is the time horizon, right? You know, sometimes a financial plan is just for a year or two. A strategic plan can be three years, five years, I mean sometimes even longer. Um, but to be honest, like if we’re talking about a financial plan, I would say that like forecasting past three years out, you’re really not gonna have good information. Like, don’t try to do a five year financial plan. Everything’s gonna change by then.
Um, but you know, one difference is just that time horizon. Often financial plans are shorter than strategic plans. So plan I’m talking about here is a three-year plan. Um, there’s also a difference in just kind of the scope. Um, a financial plan is really devoted to the financials. Now granted, it is about, you know, especially with the budget, it’s about resource allocation of how do you support the business in achieving its goals. But with a strategic plan, it’s much broader than just finance. So to use an example with the ballet, you know, what we ultimately wanna be able to do is expand the number of students that we can serve. And so we’ve formed a strategic plan that has pillars such as investing in people to support this expansion. And it’s got a whole bunch of tactics within it. Um, so those are two key differences. Um, the third I would say is often who participates in this process. So strategic plan is often driven from the top. You know, I would say the executive leadership throughout the company is driving that FP&A is certainly supporting it. And they can certainly do a great job, um, after the plan is implemented in making sure there are KPIs reporting on the progress of that plan. But it is, it is a little bit different. You know, financial planning and strategic planning. There are some key differences.
Paul Barnhurst:
No, I think that’s really good, uh, explanation there. And like you said, the executives, the senior leadership should be setting that strategic plan. Mm-Hmm. <affirmative> CFOs are a big part of that. You know, CEOs, FP&A provide support in various areas, often running numbers analysis. And then I think the biggest area where FP&A can really help is ensuring as the planning process go, is going on, is making sure it ties back to the strategy. Yes.
Rosemary Linden:
You
Paul Barnhurst:
Need to know what that strategy is. ’cause sometimes you just put the numbers down in a budget and somebody’s wanting to do something that really doesn’t align with the strategy at all. And if you’re not questioning that, you’re generally gonna end up with a real problem when it’s all said and done.
Rosemary Linden:
Absolutely. And I mean, this again goes back to I feel like I’m, I’m talking about this way too much, but influencing, right? Especially in a budget process, you know how this goes. It’s a negotiation sometimes of someone gives you a budget and it’s got all sorts of stuff in it that it doesn’t need to have. And you’re going back to them and saying, no, as you said, this doesn’t align with our strategic goals. Here’s what we need to do to change it. You need to convince that person. I mean, not everyone is going to always, uh, agree with you and sometimes that’s just the way it’s gonna be. But with both a financial plan and a strategic plan, you want buy-in as much as you can. You want the people that are working on it to feel like they have ownership in it versus just, Hey, here’s this plan. Go implement it. Right? So with the ballet, you know, I mentioned that, um, our strategic planning was actually supposed to start before it did, but we lost our executive director and I said, hold on, you know, we’re not gonna do a strategic planning process until we’ve filled this position because I don’t want my new executive director to come in and say, here, go do this. And she has no buy-in to it.
Paul Barnhurst:
Smart decision. I, I agree with that. I’ve seen changes made bunch of changes by interim CEO sometimes totally restructuring the company. It’s like, why don’t you wait a few months and get the person in that has to own all this and make it work, right? Versus changing everything. And then they come in and this isn’t direction we should be going, I think we should be doing this because then you’ve wasted a lot of money and time. So I’m a hundred percent with you that, and I kind of laugh when you said, you know, financial plan, anything beyond three years, you generally, you know, really hard to do. I once worked at a company where we did the current year plus three years at a cost center account level and head count. We had to list every change for people 36 months out when we did the plan. And every month after we would do, we did it eight times a year. Current year plus three out years.
Rosemary Linden:
And how did that accuracy work out for you?
Paul Barnhurst:
You could guess
Rosemary Linden:
<laugh> not so well <laugh>.
Paul Barnhurst:
You could say that. Yeah. Let’s just say, uh, there were some very different numbers from that three years than what really happened a couple years later.
Rosemary Linden:
And then you have to ask yourself, that obviously wasn’t a good use of the team’s time. Right. You know, there are a lot higher value activities that they could be working on than coming up with a plan that’s gonna be absolutely meaningless in a couple of years. And you’re doing it all over again.
Paul Barnhurst:
I push very much for, let’s go to a high level for those out years. Yes,
Rosemary Linden:
Absolutely. Load
Paul Barnhurst:
It, load it separately. I don’t see the value in going this far down ’cause we’re just guessing.
Rosemary Linden:
Mm-Hmm. <affirmative>.
Paul Barnhurst:
So I, I’m with you. So we’re gonna move on to our, what we call our get to know you section.
Rosemary Linden:
Okay. So
Paul Barnhurst:
In this section, you get no more than 30 seconds to answer each question. So it’ll be relatively quick. We have four questions we’ll ask. And so the first one is, what is something interesting about you that you could share with our audience? Something that not many people would know?
Rosemary Linden:
Well, I, I think you can kind of see in my background that I’ve got a globe back there, right? It’s actually made of Legos, Lego, I should say, not plural. Um, so I really like building Lego models. I have all sorts of fun models from the Super Mario Brothers original Nintendo and little TV that goes with it to a typewriter, to this globe in the background. Um, I like, I like doing puzzles, I guess not only in my day job, um, but at home as well. And probably another thing people don’t know about me is that I’m a little bit of a risk taker when it comes to like, scuba diving. I love to go diving with sharks. I, I do some fun risk taking things that are sort of opposite how I have to act in the, in the professional world. Always trying to minimize risks.
Paul Barnhurst:
So fun. So done some scuba diving with sharks. Any, uh, really scary experiences you wanna tell us about?
Rosemary Linden:
Last place I went scuba diving was Ranga, which is in French Polynesia. This was about a year and a half ago. And I was diving in a really strong current. So there’s, there’s a drift to dive, but it is a strong current. And on my last two dives, so the, on the second to last dive, we were separated from the, the dive master because he got blown away by the current on the, on the last dive. This is one of my scariest experiences. I got pulled away from the current, I was separated or by the current, I was separated from the group and I was literally gripping onto coral, which you shouldn’t, shouldn’t really be touching to try to keep myself from just being blown away. Meanwhile, my fin comes off, I lose a fin, and I’m like, oh my gosh. I, I’m by myself now. I’m in a really strong current. I’m barely hanging on, I’m breathing like I’m using a lot of air right now. I’ve lost my fin. Mm-Hmm. <affirmative>. Um, so ultimately the group saw me from far away and I’m holding on and they did ultimately catch up to me. Um, and we did find my fin, but I quite bloodied my hands and had all sorts of cuts from, you know, just trying to hold on. It was a pretty scary experience.
Paul Barnhurst:
<laugh>. That definitely sounds scary. Glad it worked out for the best, obviously. Hopefully that’s a one time event that doesn’t happen again. Yes. So I could do, that’s really scary. And then on the Lego front, you know anyone who’s followed the show back to the beginning and I know you know her. Kathy Svetina, that was her, yeah, yeah. Hobby that she listed and she had in the background a bunch of flowers when we did our episode. Yes. So you’re not the first one to have the Lego.
Rosemary Linden:
It must be a thing with finance people, but yeah, Kathy and I even have some of the same models that we built, including the Flowers <laugh>.
Paul Barnhurst:
Oh, fun. Yeah, I bet that’s a fun connection. So the next question I have for you, if you could meet one person in the world, dead or alive, who are you going to meet and why?
Rosemary Linden:
You know, I really would’ve liked to have met Ruth Bader Bader Ginsburg. Um, she’s just, I guess, a hero of mine. I really admire what she did in terms of gender equality and advancing women’s rights. Um, and of course she became kind of a pop culture icon too. I mean, remember that Notorious RBG <laugh> references and things. Mm-Hmm. Yeah,
Paul Barnhurst:
Definitely a pop culture icon. Be definitely, she stood out as more than just a Supreme Court justice in the way she developed that kind of iconic status.
Rosemary Linden:
Yes. Yes.
Paul Barnhurst:
I agree. She’d be a fun one to have that conversation with. Mm-Hmm.
Rosemary Linden:
<affirmative>.
Paul Barnhurst:
All right. So next one, and we’ll give you a couple different options here. What’s the last thing you, you could Googled, looked up on YouTube or asked generative AI chat, GPT or some other tool as it relates to FP&A finance or even Excel?
Rosemary Linden:
Huh. Um, well I’m glad you said Excel because I’m definitely on Team Excel, forget sheets. Um, <laugh>, what did I last look up on chat? GPT? Honestly, I think it was something that was 401k related about controlled groups because my husband and I each own company, so it wasn’t very exciting stuff. But truthfully, like I, I don’t ask ChatGPT ton of finance questions because I’ve seen it get it wrong too many times. So I use chat GBT more for, you know, generating outlines for blogs or things like that, helping me be more creative than I naturally am. But I don’t, I don’t quite fully trust it yet for, for finance and tax related things.
Paul Barnhurst:
Sure. And I can understand that. And there’s different trainings you wanna make sure I use it. I asked it today for an Excel question. I was writing a formula and I had written it wrong and just threw it into chat GPT and it fixed it for me. You go, here’s your error, here’s what you need to do. And I was good to go.
Rosemary Linden:
That’s great. You know, I haven’t thought of using it that way, but that makes total sense. ’cause sometimes you write like really long nested formulas. I was doing that the other day and I’m just, you know, missing a comma or something somewhere. But yeah, I bet. Yeah,
Paul Barnhurst:
I it out immediately. It’s really good. I’ve used it with indirect. I used it for, it was a, I needed to use an IS number in a search. Ah, because I was dealing with a wild card. I wanted it to be like, and I tried to just put the stars around it, but you can’t do that with a NIF statement. I rarely ever do wild card searches, so I just threw it in the chat. It’s like, here’s what you need to write it as. And I’m gave it to the person I was working with and we went on.
Rosemary Linden:
Nice.
Paul Barnhurst:
So yeah, it’s really nice that way. So last question. I know you’re, uh, I know you’re not Team Sheets, we’ve established that <laugh>, you’re an Excel girl. So what’s your favorite function or feature? Favorite thing about Excel?
Rosemary Linden:
My favorite thing in about Excel in general is its flexibility, right? You, you obviously can use it as a spreadsheet, you can use it as a database and if you’re like me, you get scolded by it in the real world for, for using it as a, a word processor as well because you know, I kind of suck it at words. So if I can use columns in Excel and do some word processing in there, why processing in there? Why not <laugh>, but, but
Paul Barnhurst:
It’s incredibly flexible. I agree.
Rosemary Linden:
It’s, but I mean there are tons of formulas I use complex, not complex, but some of the things I use most often are basic things like lookups, you know, index match sort of things. Um, data validation to control input, especially with small business clients. You know, I want everything to be uh, you know, clean data in there. I wanna control the input to certain lists of values or whatnot. Things like that.
Paul Barnhurst:
Yeah. And the data validation is great for that. I think every finance professional has used a lookup, right? Yes. If you have it, you haven’t been in finance long enough. Nope. <laugh>, you gotta go back for a few more years. Alright, so we’re coming up at the very end. We just have two questions left for you. The first is, what advice would you offer to someone starting a career in FP&A today?
Rosemary Linden:
I think reach out to people like you on LinkedIn, search for groups on LinkedIn that are about FP&A really try to educate yourself. Um, you mentioned briefly that I serve on the Advisory Council for the Association for Financial Professionals. I’m on their FP&A advisory council and they produce so many great materials that are really geared towards younger professionals and how to advance their career or how to come out of accounting and go into FP&A So look for resources like, like AFP or, um, for keeping up your training. I really like the Corporate Finance Institute has some great courses that are really geared towards fp and a as well. But ask questions, you know, fi find a mentor if you can. Um, I mentor a lot of undergraduate and sometimes graduate students from a local university. And just being able to, for them to be able to speak with me and me be able to talk to them about having 25 years or so experience in this field is really helpful to them because they may decide, hey, this isn’t actually what I wanna pursue, or no, it, it really, really is.
And I need to, to go hard at meeting the right people and developing the right skills and getting the right experience to be successful in that career.
Paul Barnhurst:
You know, really good advice. You know, there’s a lot of organizations you can follow. Having a mentor, all those things will really help you, you know, being curious and, and learning. So that’s great. So last question. If someone wants to learn more about you or possibly get in touch with you, what’s the best way for them to do that?
Rosemary Linden:
Two ways. Um, go on LinkedIn. I’m on that a lot. Find me Rosemary Linden or just go to momentum cfo.com. Send me a message and I’ll get right back to you.
Paul Barnhurst:
All right, great. Well thank you so much for joining us today, Rosemary, really appreciate it. And I’m excited for our audience to get to listen to this episode.
Rosemary Linden:
Thanks so much. I really have enjoyed being on the podcast with you today.