Full Transcription

Matt:
Welcome to Making Every Dollar Count, Practical Tips for Cost-Cutting and Budget Management,  brought to you by Decimal with participation from Tam, from Ramp, Logan from Forecastr, and Ashley from LiftBridge. As we start today, we wanted to talk about  financial operations and strategic finance and how businesses can think about cost cutting and budget management.And I think to me as, as we've talked to our customers and businesses in general in today's economy, this is, I think the primary topic in on everybody's mind is, how do I cut costs? How do I survive? How do I make it through, and how do I do it as well as I can? And we have a great guest list today of people who all have strategic experience working in businesses as well as helping them., so before we get started and kind of talk about cost cutting and budget management, I would like to introduce, , the people joining me today, starting with  Tam. Can you tell us a little bit about yourself and Ramp?

Tam:
Yeah. Thanks Matt. Appreciate you having us on here today. , I'm super excited to be here.My name is Tam,  based out of the Seattle area, and I do, as Matt has mentioned, have some experience in the accounting space, working specifically in real estate. , I started my own practice, did that for about a year and I've been in FinTech ever since. And so, learned a lot about how you can use and leverage.Technology and tools to automate some of these really manual processes that you're having to deal with. And also find ways  to save on  things here that are really hard to identify. A little bit about ramp. So ramp itself consolidates your typical finance tech stacks. You might have a few different disparate systems that you're utilizing.We wanna consolidate that into one system, make it easy for you to learn and to use focus on the card spend, bill pay, reimbursements, and also procurement as well. And our system is hyper focused on saving our customers ultimately  time and money at the end of the day. So thanks for having me on.

Matt:
Ah, well thanks for joining us. And next we have Logan from Forecastr.

Logan:
Yeah. Thanks so much, Matt. It's a pleasure to be here and,  yeah, really looking forward to chatting about this. It's definitely top of mind for a lot of folks. So,  I'm Logan, co-founder, chief operating Officer over at Forecaster.My background is in FP&A so specifically for startups. So really kind of seed stage up into series B stage startups.  I was a fractional CFO for a number of years and I built a lot of financial models and spent a lot of time in Excel. And,  I noticed kind of a lot of the issues whenever it came to trying to project cash flows out in the future, specifically around Excel, which is what led me to starting Forecastr. So Forecastr is essentially an online replacement to,  Excel when it comes to budgeting and financial modeling. So, you know, we're business agnostic. We work with a lot of different companies. We have over,  600 clients using us right now. And  we ourselves are at Startup Venture funded, and we are thinking of  managing runway and managing spend as much as, as anybody else.But that's really where, where we shine is helping you understand what your revenue's gonna be out into the future, helping you understand what you're spending money on so that you can appropriately make these types of decisions, try to extend runway and manage cash. So, really excited to be here.Excited to, to jump into the conversation and  and, and share, share some of my experience.

Matt:
Well, we appreciate you being here. And, and last but never least, Ashley.

Ashley:
Thanks Matt. Thanks for having me. So my name is Ashley Vukovits and my experience, so I'm a CPA. My experience is all in the accounting and finance.Companies  during my tenure year last  couple years as a CFO of a public company that went through a pretty large sale.  and then in June of 20 I  formed LiftBridge CXO with a couple of other former CFOs. So we provide fractional CFO  services to small and medium sized companies. A lot in the technology industry, but other industries as well.And  just so excited to be here. This topic is certainly top of mind at all of our clients, so have these conversations  almost daily. So looking forward to  sharing ideas and thoughts with everyone.

Matt:
So, Ashley, as we were kind of preparing for this webinar and, and having these conversations, you mentioned what you just did. you were getting asked about cost cutting and budget management a lot. Before we dive into kind of tactics, let's. Let's outline what exactly we mean when people ask you about cost cutting and budget management.   Talk about some of the key terms and concepts and, and what that, what that means to you.

Ashley:
Yeah. Well, I think you know, the companies we deal with are, are smaller in nature and so they're always looking to, you know, where their interests lie, which could be board of directors, could be investors.  and so in the past there's been a lot of focus on revenue growth  driving the valuations of the companies.And certainly in the last year, plus a lot of that has turned to cost cutting and trying to get to cash flow break even. So really just trying to figure out how do you  extend your cash runway so you're not having to go out and get debt or equity. To fund the business, but really trying to make it self-sustaining.And so, you know, really that's a, that's what a lot of the smaller to medium size companies are trying to do today, which is extend the runway. And, you know, that we're gonna talk about a lot of those  cost cutting measures today. But that can be, you know, anything from people to  you know, different costs that we incur in the businesses.

Matt:
No, I think that makes a lot of sense. And you know, when we talk to companies all the time, we talk about how to run your business on a day-to-day basis. You need both financial operations, the ability to pay your bills, get paid, and track it all. And then you need the strategic side and you need somebody to help you and set that ongoing future facing.Look, Logan, I know that  a lot of what you guys focus on is giving people that ongoing viewpoint and not just a point in time. Hey, here's what you can do today and move on. But really trying to establish that ability to create habits around it. What are you guys seeing today in terms of, of this that maybe even has changed since the pandemic and, and the years before where Cash was?Everybody had cash.  

Logan:
Yeah. It's been, it is been a pretty major shift. And I'll, I'll touch on a little bit of what Ashley talked about, which is that, you know, ordinarily if you're running short on cash or something like that, the default was to go out and raise more money. If you're, if you're a venture bats company, I mean, you're kind of on that hamster wheel up, raising, burning, raising, burning, trying to get to that next milestone and then just growing the company and over time, potentially either becoming profitable or being acquired.So what we're finding right now is we are in an incredibly challenging market for fundraising, right? Like I've been told by several people that they believe that this is the worst fundraising environment since the early two thousands. And I was too young at that point to, to validate or invalidate that.But what I can tell you with complete certainty is that it is very, very challenging out there. Forecastr is actually in the middle of raising around right now, we're one of the lucky ones that, that are seeing some success in doing so, but a lot of our clients aren't. So whenever you find yourself in a situation like this where if you were making plans for your company, maybe back at the, you know, end of 2022, early 2023 times have changed.You know, the tides are turning a bit. So those companies that are going out and they were originally planning on raising, you know, 10, 15, 20 million, now they're gonna have to tamper that back significantly. But that cash, that runway has gotta come from somewhere, right? If, if you can't execute on a round, or perhaps you're gonna overly dilute yourself because the markets are so challenged, really your only other lever, if you can't just magically grow revenue is cutting costs.Right. So, you know, one of the things that you touched on that was just. Creating a really good cadence around looking at finance, paying attention to finance. Now, a lot of that is where accounting is so important, and this is why Decimal is, you know, somebody that we recommend people use all the time is it's really important to understand where you are today and getting an understanding of how much money you're burning, how much money you're making, things like that. But in challenging and turbulent markets like this, it's, it's very important as well to understand where you're going and, you know, if you cut certain costs, what downstream impacts does that have into your business? So  we talk about things a lot because we work with startups in terms of runway. So just making sure what we're coaching folks in either if you have a path to profitability, try to get there.And that's gonna be done largely, I think in this mar in this market through cost management. If you really don't have a path to profitability, your best bet is to, again, use cost management to try to extend your runway as far as you possibly can. And we're all gonna really hope that you can extend it far enough out to where by the time you come out the other end of this, you're gonna be able to raise money, you're gonna be able to kind of make it through. but that's kind of the frame that, that we're, we're seeing people think about this through.

Matt:
Well, Logan, I really appreciate you making me feel old  with the early two thousands reference, but  I think you bring up some good points and, you know,  one thing that stood out to me that you were saying is what we talk about a lot is in order for your, your budgeting in order to look forward, you need good data in.And the key to having good data in is to have the right tools and processes in place. To make that easy to do, or at least easier to do. And Tam, that's, that's where RAMP and a lot of the really great technology on the market today  really excels at is, is that tooling. Will you talk about some of the things that you all see at RAMP or that you see in general with your experience in the market related to how important it's to put the right pieces in place so that you can actually do the go, go forward look.

Tam:
Yeah, that's a really great question there. And I think it all really starts with  because there's so many options out there, there's a ton of different softwares and systems that you can choose. You know, make sure that you don't have  systems that don't talk to each other  that just causes, you know, more, more learning, more change management.Everyone has to, you know, know where to go at what times. And so having a consolidated solution like RAMP is something that can really help  optimize and streamline your processes, but also modern technology these days, you can leverage it really to automate  any and all of the highly manual processes, processes, data collection, receipt management, and collection.It's so important  to, you know, be able to apply rules, for example, on credit cards that are  typically  you don't have any control over, you know, how your employees are spending on the cards. You don't have any oversight and invisibility into how  you're spending they're spending on those cards.And so  with modern solutions like, like RAMP for example, you have the ability to control whether or not the cards are even the expenses are even to go able to go through in the first place, right?  so I think control, and I think we're gonna be able to touch on this a little bit later as well, but  controlling expenses upfront as opposed to on the backend is gonna save not only  your employees a lot of time from having to manually figure out where to categorize expenses.For example,  chart of accounts. That's the foundation of an accounting system. It's really important and very crucial that you're working with an experienced firm like Decimal to get that set up because that's the building block for all the other systems you're building into. And if you have a bloated and overcomplicated chart of accounts, for example, it's gonna make it very hard for your employees to know where to categorize their expenses. and so starting there and then building up selecting tools that allow you to automatically code to expenses is gonna help streamline that process.

Ashley:
And yeah, Matt, I was just gonna add, if, if we come into a new client and they have Ramp or they have Forecastr, we're like, we're high fiving each other because we know that, like you said, the data coming in, or in Matt's case, like the, the projections going out, like it's all, they're, they're  they're light years a ahead of  clients where we go in, it's all either Excel based or it's Google based.And  you know, the chart of accounts is a mess. And so a lot of times the first thing we have to do is help clean up the data because  you know, like you said, Tam  if the data's not clean, it's not going to the proper chart of accounts. The data, you're looking ats meaningless. Like you have to have good data before you start analyzing where you're spending money and where you might be able to cut costs.  So I just think it's really important to make, like you said, to make sure that the data coming in is accurate and it's  in buckets that we can look at and easily discuss with department heads where they're spending money and where they might be able to make some cuts.

Logan:
Yeah, and I'll, I'll triple, I'll triple tap that as well.I mean, like the, the, the reality of it is  accounting. So what, you know, Decimal does is the past of finance and then we really are the future of finance. So kind of like looking at what's gonna happen. And Ashley, I think that's the world that we both, we both live in a lot and you're kind of in both worlds as kind of the more strategic, you know, person on the call, but it's really, really challenging to forecast whenever you don't have ultimate clarity on what you've been doing.So the first plates that we look, whenever we look at what are your expenses gonna be out into the future, if they're bucketed correctly, the first thing we do is we look at what have you been spending money on? What has it been in the past? And then using that to project going forward, just to get a good understanding.  So if your data's not clear and if you don't have understanding, I mean, I think that's step one whenever you're looking to, to control costs, is understand what are your costs and, and get really, really good visibility. Really, really get clear there. And then once you've got that down, then there's a lot that you can do after that.But then, but it's all gonna start with making sure that your data's in a good spot.

Matt:
You know, something that, that everybody seems to be hitting on is it's not just the right tools in place, it's the right processes to go with those tools and the right kind of infrastructure, which, so we've all been tap dancing around this subject, but I think let's just hit it when business owners do this themselves, and I've done it myself, How fun is that to deal with, because I don't know about you guys, but I've rarely seen an entrepreneur, whether it's in tech or non-tech, that they enjoy this aspect of the business. But those people that take the time, at least at the beginning to understand where they're going, what to set up, what habits and processes to put around it, those are the ones that can set themselves up for success into the future.  

Logan:
Yep. It's a good  so I'll, I'll kind of like touch on that. One of the things that, that I've found specific whenever it comes to finance is that a lot of times founders don't know what they don't know.Right? So they, they, they understand that they need to be paying attention to these things. But they don't even understand where the potholes are. There are things that they, they, they have this feeling that they need to be paying attention to. They have things that, they have a feeling that they, that are very important to the business, but it is so far away from their core competency that they're forced to either try to tackle it themselves, which is unpleasant and they probably don't do a good job  you know, for it. They, they may come out stronger on the other end, but it's, but it's one of those things that I think that there's a reason that people try to get accounting off of their plate as quickly as possible because they recognize that it's not fun, so they don't enjoy doing it, and they also recognize that they're not great at it. So it's something that they try to get off their plate. And then it's kind of the same thing with just financial operations in general. Whenever they start to look at forecasting and things like that. I think it's very important that founders kind of come to that moment and understand that this is something that is very, very important and something that they need to pay attention to, whether it's them paying attention to it or whether it's somebody else. Of course we recommend that they, they take it off of their plate because it's something that I think is best done by, by a specialist. But I think that  that's just like one thing that we've, we've come to understand, especially in this market, is founders. A lot of times they kind of come to that moment where they're like, you know, I really need to pay attention to this. but, you know, it's, it's not their core competencies. So  it's, it's best handled by, by  other folks. I think.

Tam:
Really well said there, Logan.  you know, it's really just. Do I, should I or outsource my accounting function? Or should I, should I, is it worth the investment in time to learn how to do this myself? And am I gonna be able to do it at a level that is, that I'm confident in? And am I gonna be able to submit my books to my accountant or my CPA and then know that I'm not spending a ton of money to have them fix up my mistakes? Also, am I taking advantage of all the, of all the tax deductible items? Am I, you know, working with a professional to, you know, build a tax strategy that actually saves me money over time? I think that's one of the biggest things that accounting firms can do for their clients is advice, get their books done throughout the year so that it's not a rat race at the end of the year trying to collect all the documentation that keeps you in compliance and out of trouble. And I'm sure Ashley can speak to this as well.

Ashley:
Well, yeah, you guys did a great job. The only thing I was gonna add is, you know, sometimes we get in there and yeah, it's the founder and sometimes they'll have a bookkeeper. I mean, we love it when they have Decimal, but they're, they end up spending so much time on this. And I, you know, we always tell them that that's not where you should be spending your time. Like, you should be driving product development. You should definitely be driving sales, your marketing plans. I mean, there's so many other strategic things that they should be doing, and the earlier they can realize that and get good systems and people in place  just the, the more you know, the, the more they can focus on it and really drive the things in the business that they should be focusing on.

Logan:
Yeah, and I think I 100% agree with that, Ashley, and I'll, I'll add one more thing, which I know the center of today's conversation is around cutting costs. But just to give one another kind of tangible example of, of founders that maybe don't even know what they don't know and, and why experts need to be in the room, is that  I heard this stat that  I think it was like 95% or maybe it was even 99% of founders are  not adhering to the reporting requirements that they have set by their operating agreement or term sheets that they, that they get.Which means that if I'm not giving my investors transparent data into the underlying health of my business, into the finances of the business, if push comes to shove and you get into a very gnarly situation, you can be sued and that could really blow things up for you. And it's just one of, it is just one of those areas that unless you have somebody that lives and breathes this, you're probably never gonna uncover that until it's too late. And there's a, and that's just one specific example.  There's numerous others that we could give. But it's just, it just shows that, you know, this thing is, is this, cost cutting is very, very important in today's climate, but in really all climates, I think it's really, really important just to, just to nail the fundamentals and just make sure that you've got a good handle just around the basic operations, specifically when it comes to finance.

Matt:
So as we, as we get into and talk about very tangible examples of cost cutting, you know what I, I think we can all agree that, that the major basis behind cost cutting is efficiency. And that can be efficiency of dollar and that can be efficiency of time. And one of the things that I think is exceptionally important from the foundation up is putting the right tools in place to make, to limit manual work, to create efficiency of time.And Tam, I'm interested because one of the things that I know that RAMP does really, really well. Well, it can, with the right implementation and the right people helping implement it is, it can really cut down on manual processes and very painful things. Talk about some of the, and this can be in, in some of your, your previous careers as well as today.Some of the manual processes that you think are low hanging fruit for business owners, for co-founders, for CEOs in general  that can lead to cost cutting, kind of very tactical opportunities.

Tam:
I think, you know, the accounting industry and just accounting functions and processes in general have, they've come a long way, but there's still so much more to be done in terms of coding  transactions, the accounting work  collecting receipts.I know that in, in terms of spend management, and I feel like now, Spend management itself is having more of a moment. People are starting to notice because of  the economic environment that we're sitting in today, we gotta save more money. It's harder to earn an extra dollar of revenue than it is to find somewhere to actually cut expense.And that doesn't mean cut everything. It just means how can we get more visibility into what we're spending in the business? How can we control that? Spend simple things like. Uncovering where you might have duplicate subscriptions within your business or redundant subscriptions. Let's say for example, you have  you know, QuickBooks and then you've upgraded your accounting system to a NetSuite or a sage intact, and yet you forgot to cancel your QuickBooks subscription.We see that happen so often, and so having a tool that I, that surfaces that says, Hey, you're actually spending on these two items. Here are the cards that you're spending them on, and here's, here's how much you're losing on a monthly basis because of that. That's pretty incredible cuz these are things that are very, very manual for  you as a business owner, you shouldn't be spending your time going through your accounting yearbooks to find these items and especially as you scale, have more people, more departments, it's gonna be impossible to do and it's really just not time well spent.You should be spending your time elsewhere.  so that's one example. Another is just  you know, automating the, the actual process of the accounting. So building in accounting rules to the cards that you're issuing your, you know, your employees, removing the burden from them to have, to actually code those transactions themselves.Because number one, do they know where to code those transactions? Nine times outta 10? Probably not. They're gonna code us the wrong transaction, and then who's cleaning that up? It's gonna be the accounting firm, right? And so we're just  removing those kinda low value added items in all this time that really doesn't do anything for anybody. And then moving and shipping that to something as more value added.

Matt:
So growing up, my dad had a small, small business, and every year he would show up in February to his accounting firm with a box full of receipts. I'm taking it. That's a bad idea.

Tam:
Yes, absolutely. And I think  there, there's so many ways now to collect receipts and you don't have to have the box of receipts entering that in manually.I think my, my very first job in accounting was actually in accounts payable, and that's how I had to do the invoices. I would get a stack of invoices, literally this big, take them home. Probably shouldn't disclose that, but entering all the information into the AP system, and it would take me hours to do that.And so adopting an AP solution that allows you to, to go ahead and OCR all that information off those bills. In Ramp's case you, you can text your receipt back to the system, it automatically matches that against the transaction. You're not having to wait until the end of the month to match those transactions and receipts together. especially as an employee, sometimes you can lose those receipts and then you're eating the cost yourself. And so we wanna be able to make sure that everyone is benefiting  from the front end that you, the end user, the card holder, their, the, the employee all the way to the backend, the accountants reviewing the transactions  knowing that the transactions have been coded properly and speeding up the month end close process, just making it such a seamless flow.So at year end you're not scrambling trying to get everything together for taxes.  

Matt:
I was just gonna say, after hearing about that stack of invoices, I now know why you're in FinTech.

Tam:
Yes, absolutely.

Ashley:
I was just gonna say  yeah, expense reporting is definitely something we see that's manual at a lot of smaller companies. Tam talked about like all the benefits of automating that process with which I agree to, but like going back to the cost cutting, it's also like having those properly coded and identified is also  Good as you're looking for costs, you can cut because I mean, we've seen it where, you know, there's just one credit card that everything goes on.And so trying to evaluate then, are there costs there that we can cut that, you know, we can kind of tighten our belts a little bit. You know, we're, we're in a time where that's necessary, so do we need to be spending, you know, $500 on a bottle of wine or, or whatever it is. So  not only is it just good business practice to have those processes automated and cut down on the risk of human error.It's also important in this process that we're all going through of evaluating costs and seeing where we might be able to tighten things up.

Logan:
Yeah, I, I totally agree with that as well. And I, and I'll say like, there's a lot of just like little low-hanging food, things like that, that you can do. And like Tam Ashley, I think that you all gave like a really good, a really good overview of that.And I, you know, I think a lot of the things that we work on are things that can kind of like help you get more  out of it. I do think whenever you, whenever you holistically get the picture of your financials together, one of the things that  I've noticed, and it's kind of an unfortunate truth whenever it comes to having to do cost cutting, is I think what you'll, what everybody will find is that the vast majority of their expenses are their people. so you're gonna look at it and typically it's over 80% if you're looking at your, especially if you're startups, because typically you're raising money to hire people to build product. So  whatever you're looking at, you know, what are the main levers that I have in order to extend runway? There's all kinds of, you know, quick wins that you can get and absolutely like you need to go through and you need to make sure that you squeeze as much out of that orange as you possibly can.And don't waste money in a market like this. But I think that that'll get you, you know, so far the biggest impact is gonna be coming from looking at headcount and just seeing what happens.  you know, if you, if you make some, some trims if you need to. So one of the things that we like to do, we, we, we encourage clients to do, especially whenever they're kind of coming up on runway and they have to make tough decisions, is go down your payroll census, go down your roster and categorize people as absolutely critical.Business will fail if they leave. Versus would really be painful to leave versus maybe kind of newish. It wouldn't be a huge pain, like not quite ramped up yet. So I think that you can kind of mentally put people in these buckets and then run through that exercise.  if we were to make cuts and we were to, you know  lose some folks that are kind of in that last bucket, what would that do to my runway?Right? Like, like how much more time could I get? At what point do I, do I get to profitability when doing that? And that's where I think financial modeling really comes, comes in handy.  and I, and I'll kind of like call on this notion that, you know, there's a difference between growth and scale, where especially for VC backed companies, growth is more with more so I can just keep raising money and then throwing those dollars at the business and getting more customers and growing revenue and I'll continue to burn money in.So doing. Right, and you will grow in doing that. And if you're, if you're just trying to grow the value of your company, then that's what, that's a good approach to doing that because, you know, startups are traditionally valued off revenue. So if you can grow revenue, that's great, but then there's this notion of scale, which is doing more with less, or at least more with the same amount.And I think that in these challenging markets, that's really what you have to look at is just how do I continue to grow? How do I continue to like, meet the expectations that I have for my company, knowing that in these days costs are gonna be very, very constrained. So every dollar that I spend, it has to be very, very well thought out.And  that's, that's really just, I think, I think it's not a fun exercise to do because we all love our teams, but  the reality of the situation is that, that, that, that is a lot of, of where our costs are.

Matt:
No, I think that's very true. And I, I, you know, one of the things that you hit on that I think  is, is a very important next topic is when you look at cost cutting.There are two aspects of that. The first time that you do it there is the what can I do today and what can I do looking backwards to help me with today? That kind of one-time project-based scenario. And then there's the, all right, now that we've established the right processes and we've understood that good data in equals good data out, how do we put that ongoing process in place for continual planning and tracking? How do we create a plan? How do we create scenarios for plans  that we can help make sure that number one, we are continuing to exist well, and how do we scenario map out contingencies?  Ashley, I know a lot of what you talked to your clients about. Is, is helping establish that. And I know Logan, a lot of what your product really helps with is making sure that there is that model that they can point to.So Ashley, can you talk about some of the strategic sides and then Logan some of the, the needs to have that right model and kind of North Star  as well.

Ashley:
Yeah, so  I think that, you know, everybody's hitting on  the importance and, and where we, you know, I think we'll get a little bit into the tactical side of like, what are some suggestions of where you can cut And I Logan's talked about that, but yeah, being able to look at  models that tell you what your costs are gonna do.So for example, like we've talked about, how do you outsource your accounting? How do you outsource or how do you bring a system in that automates a lot of your backend bill processing expense reporting, and then, You know, bringing in software that can do the modeling for you, but you really need to step back and say, what's my finance, what's my accounting and finance department? And all the processes and systems look like as a whole.  and you can save money by bringing systems in if you do it properly. And, but you do need people, you know, managing the systems, analyzing the data when it comes out  having controls in place.  so, so it's kind of stepping back and saying, what's my overall big picture of my accounting and finance department? How can I put systems in place to help op well to help improve accuracy of data and help optimize the costs of that whole area?  So I think that's one important aspect. And then just having a process or system, both process and system is in place to be able to run scenarios to tell you. As I do these things, what is the outcome going to get me? because the last thing you wanna do, especially if you're in cost cutting mode, is, you know, let's say you decide you're gonna bring a bunch of consultants in to replace  you know, functions that were done by employees, but you end up spending more money on the consultants, then you do the employees and, and maybe, you know, certainly adding some systems and automating some processes in there as well.So it's, it's just really important that as you're going through these   cost cutting processes and thinking about it both today, like Matt said, and looking in the future, that you're able to run scenarios to tell you what, that's what impact that's truly gonna have on your financials. And I'm sure Logan and you have some thoughts on, on how to run those scenarios and the systems involved in doing that.

Logan:
No, absolutely. I think that's a really great way to tee that up, Ashley. And, and I'll, I'll note that. Really, the way that we like to think about it as kind of like a holistic kind of finance function is, you know, once you get your data right, what you've talked about and you get everything set up  what you, what you really need to do is put together a budget that gives you some clarity around when your fume data is, if you're, you know, or when you're gonna hit profitability.But you have this framework of, this is what we're planning on spending money on within a given month, and then have that be something that is communicated throughout the entire team. Now, a plan is only valuable if it's a plan that is measured against and adhered to. So just one thing that I, we always recommend for all of our clients is have a dedicated monthly finance meeting with your team. and this is where it's really great to have strategic folks in the room. So Ashley  you know, LiftBridge CXO would be if a company were, were using you all, it'd be great to have you all involved as well, just so that if they have questions or anything like that, they can get a good understanding.But if I have a budget in place and then I'm just blindly spending money, I don't know if I'm going over budget. I don't know if I'm going under budget. I don't know if I'm way off on what I forecasted my cash to be. So I just, you need to make sure that you get a decent understanding of what the future's gonna be, and then you manage towards that.So monthly finance meetings are a great way to do that.  but the other thing that I recommend is giving yourself a, you know, we talked about scenarios. So what we recommend is, is creating another scenario of your financial model, another scenario of your budget, you know, if you will, where it is. It is like one of the worst possible scenarios that you can imagine, right?Where your revenue's not growing, your expenses kind of are what they are, and just getting an understanding of what that could look like. And then just way out in advance, have a game plan for what you're gonna do in that scenario. And in your monthly finance meeting. That's one of the things you need to talk about.Are we trending in this bad scenario or are we trending in this good scenario? If we're trending in this bad scenario, let's start talking about this game plan that we talked about back here. That's probably gonna be layoffs unfortunately, right? I mean, that could be, or perhaps it's getting in debt, right?Or something like that.  but I think it's, it's really important, especially if you're an unprofitable company that has an end date, right?  You have a fume date  to just really get ultimate clarity around when that's gonna be, and then tracking towards it. And if it's, if it's understood, and if you're on track and you have a plan, then it may not be a problem.But if you're way off base and you are not paying attention to it, you know, one of the worst things you can do is look up one day and realize you've got two months of runway left. That happens all the time. That happens all the time. And it's  an unforced error. So that's the biggest recommendation.Like  if the only thing you get from this conversation is just pay attention in markets like these, like in a very clear way  that's the best advice that, that I could give.

Tam:
And then I just kind of wanted actually to touch on, Ashley, you mentioned, you know, the importance of systems setting up your systems properly using the right tools as well. I think one of the things, especially as a company, you're, you're starting out, you're, it's, it's so overwhelming because there's so many different things out there.So  you know, make sure that you're doing your due diligence, you know, figuring out, you know, which softwares would be good for you to adopt because the, the implementation process, the change management process, it's very time consuming. It's an a huge investment of time. So you wanna make sure you're selecting the right systems from the start.  Can that system grow with you as you scale, as you bring on more employees? What is going to be cost down the road when you have a hundred users as opposed to, you know, 50?  so understanding whether or not systems can grow with you, because you're gonna have things for CRM, sales, finance, and accounting bill pay.So it's very, very easy to start accumulating all these different tools that you're using and then to have to cut them and, and then move from one system to another. Again, you're going through that change management process. So something to be very mindful of.  another is, you know, in the, in the vein of cost cutting, how much are you paying compared to other similar businesses who are using the same software.You go to a software vendor's website and you say, Hey, reach out to us for enterprise pricing. And then you talk to them, they send you a price and you have really no idea how much you're paying, whether you're overpaying, you're paying on average, or you're getting a good deal.  and so, Outsourcing kind of that element of procurement to a company or a software or a tool that knows how to do that well and can cross reference, you know, the contracts that you're getting with these, these softwares against thousands of other businesses in the same area is gonna be so huge.And I think this, I'm excited because this is a very  timely moment for us. Cause we just released an announcement around  leveraging AI for our contract and vendor management piece in ramp. And so if you do upload your contract, you're able to see  are you overpaying for something? How much could you be negotiating down with this particular vendor?And so this is a, a very easy way to go ahead and leverage the data that you already have access to, to, to actually negotiate down prices on contracts.

Matt:
When I think one of the things that, number one, that is an awesome update.  number two is I think you've hit on two topics that I think are really important when  when thinking about cost cutting and in even initial setup.Number one is the democratization of information. The ability to go out and find better information is becoming easier and easier, and taking the time to go out and actually seek out that information  is important.  the other thing is, is as we talk about, we have, we have a lot of great advisors and a lot of great software and a lot of great tools represented here today. one of the things that we run into, and I'm sure you guys do too, is seeking out the right advice from the right people. I was talking to a business the other day and they were asking why their  financial operations system was so off. And I said, well, who advised you on setting it up? And they said, my lawyer. And I said, well, I went to law school. I can tell you that was a terrible idea.  and it's one of the things that Decimal talks a lot  about is the difference between people that have run businesses and people that have only advised businesses. And as you kind of talk about and think about where to seek the right types of advice, there's also that democratization of information has also created a lot of noise.How would you all look at, let, let's get tactical on seeking out advice for help. Cause we already said entrepreneurs, this is not their core competency accounting.  where do you tend to find is a good place to find advice  related to cost cutting, setting up, picking the right tools  anything along those lines that we're kind of hitting today?

Ashley:
Well, I think  I mean I guess I'll just plug LiftBridge a little bit, but, but firms like us  you know, getting a good strategic finance advice in there, whether it's time to hire your own CFO or you just  feel like, you know, a lot of times when we go into a company and they say, oh, I have a bookkeeper and I have a tax accountant, and I'm like, well, great, cuz we don't do either of those things.So  you know, so finding the, when it's the time to bring those advisors in and then, you know, we see, we see a lot of different things that our clients, whether it's processes that aren't working, it's, it's  you know, back office accounting that's bad.  or  you know, it's, it's bad spreadsheets. I mean, we, we see it all and we see a lot of vendors too. and we have, you know, kind of, we have our own internal list of those that. That our clients have been successful with, and maybe those that haven't, they haven't been successful with. So I think bringing in that strategic level of finance when it's the right time and, and early is, is good.  the longer you wait, just the more messy it gets.So bringing in  strategic finance early to be able to help you understand  you know, where you have improvements you can make, and then where those, those  whether it's individual or companies have seen  success with other companies either with systems or, you know, what processes or people.

Logan:
Yeah.I'll, I'll double tap on that. I mean, I think that that's, that's really where fractional CFOs, if you're like a, you know, a startup  that's where really startup CFOs shine. So like LiftBridge would be a great, a great resource there. I mean, I think. CFOs fractional CFOs really shine whenever there's points of friction in the business.And that could be good friction or bad friction. If everything's going great and all your systems are set up and everything's amazing  really all a fractional CFO has to do is just like give you a quick variance report and then maybe, maybe give you some tips. But that's really not why you're, you're paying them, you're paying them for all of the strategy you're paying them to really help you get to that point.So whenever you're in turbulent markets that require cost cutting whenever you need to negotiate, you know, debt whenever you're making your way through a transaction, right? Like all of these things, these are all where, you know, fractional CFOs can, can jump in and, and really help you think critically  about this type of stuff.So that would be my number one is just like, find somebody that this is what they do. This is the world they live, and they work with a multitude of clients that are facing the same challenges that you're facing and they're able to navigate them through to onto success. So that would be my first one.But then my second one would be assigning, assigning responsibility. And this is, I think where like ramp would really come, come in. Well, where, you know, you can set a budget by department and you could see what that budget, if that budget were to play out, you were to adhere to that budget, you can forecast what your cash is going to be.So now it's your job to stick to that budget. So you know, you can put that onto the owners of those departments and say, look, this is what you, this is what you need to spend. This is the amount that we're approving. If you can, if you can stick to this, great, and this is where we're gonna be. Now it is up to you to find out how to make the most out of this budget.And I think if you assign responsibility to it and you give them a con, you give them their constraints and you say, we need to hit these targets and this is the budget you've got and it's completely up to you in, in how we optimize that. I think that you're gonna see a lot of efficiencies gained from that as well.

Tam:
Yeah, that's huge. I mean, I've worked with so many accounting firms across the last, you know, five years or so that I've been in this industry. And  you know, folks like Ashley and LifeBridge, they've, they've seen it all. They worked with clients and businesses just like you. They know what works, what processes, what tools, what systems for, I mean, it's not a one size fits all.And so I think you really gotta leverage these experts to, to help guide you, to advise you. And, and the way that the  the accounting industry has, has evolved over time is that it's really not, About compliance anymore. It's not just about keeping you out of jail. It's way more than that. It it, you know, we're leaning into the advisory aspect and wanna be able to help you determine  you know, should, can you hire another employee?You know, what's your next step? And, and tools like Forecastr are all built around kind of that premise as well, right? How can, can we help even, you know, the accountant accountants  better leverage the data, visualize that data to also  inform the decisions that you're making as a business as well.So super important.  so yeah, that's kind of my thought on that.

Matt:
You know, one of the big changes that I've noticed over the last decade or so being in the, you know, kinda small business tech world, is that on the operational side of things, it has become as much of a technology job as it has become an accounting world.And  and I think that, so as we, as we start to wrap up, and, and I'd love to get everybody's kind of final thoughts. One of the things that stands out to me is when you put technology put together, well first, the efficiencies that that creates gives you the opportunity to save on costs so that you can spend where it's most strategic to help you grow and survive. but as we kind of wrap up and as we think about where, where things are and where things are going, or could be going  as a general economy, I think this topic is gonna be very top of mind for people for probably quite a while.  I would love to get final thoughts and we'll start with Tam, then Logan, and then after. as businesses are thinking of cost cutting and budgeting  what are some of your final thoughts that can help them take the next steps in thinking about the best ways to go about it?

Tam:
What haven't we already covered today? I think there's, there's been a lot of great conversations so far about, you know, the use of tools, systems  you know, forecasting for the future. You always gotta have a plan in place and budget and, and be able to stick to it. Otherwise, you know, you can't really compare how you're performing against how you are anticipating. and, you know, maintaining runaway is so important, of course.   I think for me personally, it's, it's about. Placing more controls, but still allowing the flexibility and agility for your business to operate  with, without, you know, exposing yourself to unnecessary risk, to fraud, to, you know  I think with, with tools like, like ramp, you know, being able to put controls on the cards up front prevents spend, spend before it even happens.So anything that is out of policy, you're able to capture upfront, those transactions get automatically declined.  being able to see, you know, again, duplicate spending and SaaS subscriptions  being able to issue.  cards and, you know, access reimbursements and things like that at scale. So just  from a tools perspective, you know, finding something that really works for you  and a, a software vendor that can also be a partner in your business, because we're not just a tool that you can leverage.We are also a strategic partner in many cases. So finding the right partner is crucial and that, and that goes not only for software, but also for your  accountant that you decide to, to outsource to, if that's, if that's a method that you're using.

Logan:
Yeah. I'll jump in here and give kind of my, my final thought. So I think my final thoughts are kind of marrying up two things that were, I've just been talked about, which is that, you know, the financial operations becoming a, you know, kind of software oriented job. And you know, we already talked about how for most of us, the vast majority of our expenses are our people, right?So one of the, one of the thought exercises I think is really important to go through is just audit your team and just really critically think through, are there things that are being done by humans that could be done by software, or perhaps that should be done by software. I think that if you really think critically and you go down and you, and you spend the time, I think that you will find that there is some, there is a lot of gains to be made because ultimately that's why software is there.Anything can be done by hand, right? Like anybody can go and hire people to do any tasks. The purpose of software is so that that's not, you don't have to do that and it's significantly cheaper. It's gonna save you a lot of time. So just think critically, figure out if there's anything there and if there's not, the next step before, you know, making any major moves is figuring out should you outsource, right?Like if you have an in per, if you have an in-house accounting team, perhaps you can outsource, maybe your quality will not suffer. Perhaps it may even get better, right? Something like that. So, so just like really think through and just understand like, do I need dedicated full-time people to do certain tasks and can I get efficiency gains by using a software or outsourcing?I think that's where you're gonna get the most, I think, bang for your buck whenever you're looking at, whenever you're looking at cost cutting.

Ashley:
Yeah, those are great. I  I kind of have a list of some of our top.  top things we see at our clients and, and Tam and Logan both, both hit on some of those. I guess a couple of other, just like more tactical tips that I would give is just, if you're really looking to extend runway, take a look at your  payment terms with your vendor contracts.Sometimes you can extend those, sometimes you can extend those for free just by asking. Other times you might get charged a fee to do that, but honestly, if you're looking at extending runway, it might be in your best interest to pay  a fee to, you know, be able to pay quarterly or annually. That might make sense for you at this point in time. trim the fat. I think I, I touched on it a little bit  in looking at your employee expense reimbursements, but, you know, make sure that travel and entertainment, you're really spending money either to retain employees, which is important or. And or you are spending money to drive revenue. So are you going to the right  are you going to the right conferences? you know, are you really getting leads out of the money that you're spending? So that's really important. I mean, rent is a big thing these days. Like do you have an office building sitting there that people aren't using? You know, to really reevaluate what your  in-person and virtual policy is are.And if you've got extra space, you know  deal with that. Either, you know, look at some co-working space or, or downsize your, your existing space. And then I, I touched on this, but you know, all of this talking about cost cutting. When you do have a strategy together and you, you know who your key employees are that you wanna retain, make sure you're doing things to retain them  you know, you, you can't cut so many costs that. you're, you have turnover because that costs money too, to train people and to, to hire people. There's a lot of costs associated with that. So when you get your list of key employees, make sure you're doing things  like four  plans and  benefits and, and holidays and things like that to retain employees and really make your company a best place just to work.That's, you know, that's a big deal for companies today. So  so yeah, I think those are just some tactical things, but I think  important as well.

Matt:
Well, I think this is awesome. Really great advice and, and I think we, we could all sum this up into one general statement, which is don't do nothing. I think every business today should absolutely do something and should look into their company and what's going on, and how they can become leaner and more efficient and, So thank you all for taking the time today. thank you all for dealing with the fact that it sounds like I'm in New York City, but it's actually Indianapolis.  I really appreciate  the time and the advice and, and I hope that we, we can help people and continue to work together. So thank you all. ​