The Collaborative Finance Function with Zack McCarty, Director of FP&A at Qwick

Zack McCarty: [00:00:00] just starting from the planning perspective, like before in our earlier stages, we were just taking historicals and trying to build trends from there. Not really having like a conversation as much as we should have with everybody about, Hey, what are we gonna do this year?

just even starting there, it implemented like a way more. collaborative and like buy-in for our planning because everybody like had a stake in it.​

Joe: Hello, and welcome to another episode of the Role Forward podcast. My name is Joe Michalowski and this episode is brought to you by Mosaic, a strategic finance platform that transforms the way business gets done. And today my guest is Zach McCarty, [00:01:00] director of FP&A at quick. Zach, thank you so much for joining me today.

Zack McCarty: Thanks very much, Joe. Happy to be here.

Joe: Love it. I am super excited to chat with you. We have a good topic lined up. Before we get going, do you mind giving everyone the quick background about yourself and, and the work you’re doing at Qwick?

Zack McCarty Introduction

Zack McCarty: Yeah, absolutely. so first, a little bit about quick. we are a marketplace for the food and beverage industry. We provide on-demand staffing for restaurants, catering companies, stadiums, really anything doing F&B. basically the magic of the platform is if somebody calls out. Where you need a few extra helping hands, you can hit a button and in an hour or less, somebody shows up to help work.

So that’s the problem that we’re kind of trying to solve. My role at the company currently is director of FP&A. But historically I’ve done a lot of different things. Served as director of marketing for three years, worked in operations. I was very early on at Qwick and. Have just kind of worn all the hats you can think of and, made my way over to finance, after four [00:02:00] years being at the company.

So, gotten to learn a lot of different things, but I really like what I’m doing right now and I’ve really been enjoying kinda developing myself in this finance role.

Joe: That is, I’m always surprised when I, when I ask this first question, and I had no idea that you were leading marketing. So I don’t know if we have time to talk about all that, but we’re gonna have to dive into that off the call ’cause uh, I, I, you know, I work marketing and I cannot imagine suddenly jumping ship to run finance for this company.

So that’s super cool, man. I love the background and actually kind of sets us up. Well it’s probably part of, uh, Why this topic that we’re gonna go through is so important. We’re gonna talk about collaborative finance and why, collaboration is so important to the finance org. And, you know, with your many hats, backgrounds, probably great perspective that you’re gonna bring anyway.

but can you just set the stage by talking a little bit about why you think collaboration is such an important part of like the modern finance org?

The Importance of Collaboration in Finance

Zack McCarty: Yeah, absolutely. I think overwhelmingly what I’ve [00:03:00] found to be valuable with collaboration is it just creates a lot more trust in the company. finances arguably. The most important thing about a company, it’s what allows a company to exist, survive, hire, people, grow. And oftentimes, most people in the company have no idea what finances look like or if the company is doing well or not.

And so I think one of the things that we’ve noticed in trying to develop more collaboration and finances is people trust what’s going on in the business because they have access and they know. How to understand and interpret, you know, a P&L or a balance sheet. and so I think especially in the season of layoffs that a lot of companies have been doing, it probably comes out of nowhere, right?

Because they don’t see the trajectory from the financial lens. They probably have their own metrics that they’re concerned about, and then bam, all of a sudden they’re laying people off. So for [00:04:00] me, I think that if people are on. The same level of understanding of what’s going on. It establishes way more trust.

as well, I think finance, the way that I think about what we do is we’re the messengers. At the end of the day. We take the information that we’re given, package it up, and analyze it and deliver it to people that need to understand it. We don’t actually do a whole lot of the spending. And so when you develop this collaborative relationship with finance, accounting, and the rest of the team, They’re able to be more educated on the impacts of their spending to the finances and therefore make better decisions moving forward.

It’s not a healthy relationship when we’re just, when finance is throwing information and say, Hey, we did this, or We’re gonna go do this. You know, if we can give them a sense of what’s in the plan or what we’re forecasting and educate them on, here’s what we need to do to hit our goals, they can go out and make more informed decisions.

And so I, I think. Those are two things, like from a collaborative standpoint [00:05:00] that we’ve seen almost instantly when we started to implement some of this stuff.

Joe: Yeah, I love that and I, I’m, I’m fortunate that, at Mosaic, you know, a lot of finance or the three founders are all from finance and there’s a lot of finance subject matter expertise here, and that’s been my experience as well, working in. Marketing. I was at agencies before, so coming in-house, there’s a lot of like stereotypical perceptions of like the other departments you’re gonna work with, and that just hasn’t, I haven’t gotten that sort of perception or I haven’t experienced that stereotype of finance.

But nonetheless, I mean, that stereotype is that finance is kind of like the closed off back office function, crunching numbers, making sure that things are in the background, kind of moving in the right direction. not historically known as the forward thinking, like collaborative partner, so, I’m sure nobody would disagree with you and say like, oh, like finance shouldn’t be worried about that.

They should be back there crunching the numbers. So if everybody wants to do it but they can’t, like what are some of the challenges that kind of prevent the average finance org or finance [00:06:00] leader from embracing kind of the things that you, shared just a minute ago?

Zack McCarty: Yeah, I think like, depending on the company size, like this could look a lot different ’cause you know, at a large corporation finance, there’s probably like a large number of people doing very niche things like back office. Makes sense there. In our stage being more of a growth kind of emerging startup.

You know, people are still doing a lot of different things. They’re not wearing 10 hats anymore, but maybe they’re wearing three. And so I think for us it’s a little bit easier to embrace collaboration in finance because of our stage. But, I think historically when you think about finance, like you just think that’s how it’s done.

You think, okay, these people are worried about the numbers. Everyone else is concerned about actually going and growing the business. but. What we’re finding is that it’s hard to actually go and grow the business if you don’t understand the numbers. And so I think first and foremost, just providing the education of what value knowing the finances brings is step one.

I think another reason [00:07:00] is just skill, skill set differences like the, the skill sets of finance and accounting is very specific, whereas people in marketing, people in ops, like they have their own expertise, but it’s more wide ranging, more kind of adaptive and flowing. We’re like, Accounting doesn’t change a whole lot, you know?

So I think we’re concerned about this set of metrics and problems, and the rest of the company may be concerned about kind of more operational, you know, how are we doing day-to-day type metrics. so I think maybe those are some of the challenges. But again, I think it’s a lot easier to be collaborative when you’re a smaller company and you know, What we’re trying to fight is, even though we’re getting larger, like still maintaining that same healthy conversation between finance and, and everybody else, and I’ve only been in finance for about a year and a half at Qwick and you know, we’re, we’re just now kind of implementing this, this culture of having finance be more involved in a lot of things.

And I’ve only seen it do more positive things in the [00:08:00] company, so it’s. It’s never, it’s never gonna end, but we’re, we’re gonna always be working to, amplify that relationship, if that makes sense.

Joe: No, it totally makes sense. And I, I have a, so my wife works at Liberty Mutual, and I have a friend who works in FP&A at Liberty Mutual, so like massive insurance company. you know, she’s basically responsible for communicating with the CFO and building out like the board deck. Like that’s like, that’s it, that’s, it’s, it takes pretty much all of the time at a company Liberty Mutual just to do that.

And there’s a whole separate team to do things that like, you know, at a smaller company, like you say, that. You’re wearing all of those hats at the same time and for good reason, because there’s a lot less, complexity to deal with at a, you know, a hundred person company. But, I liked I like the perspective you bring where you said you’ve been in FP&A or finance for a year and a half.

Because something I I’m curious about is like kind of framing the before and after. So I’m curious if you have like an example of a workflow or a process like before, sort of [00:09:00] the collaborative effort that you’re putting forth versus after, like what are you seeing as the results? What were some of the issues you were seeing before, you took this approach?

Zack McCarty: Yeah, I think, it’s hard to name just one or two because of, of how much difference it, it, it injected into our, our process. So I think even just starting from the planning perspective, like before in our earlier stages, we were just taking historicals and trying to build trends from there. Not really having like a conversation as much as we should have with everybody about, Hey, what are we gonna do this year?

just even starting there, it implemented like a way more. collaborative and like buy-in for our planning because everybody like had a stake in it. And I think we’re, we’re always doing that with like headcount planning, talking to people, Hey, what are you gonna need now? What are you gonna need in the future?

I think another workflow that changed for us was our month end close. Like we do, obviously [00:10:00] everyone does like a forecast variance or a flux analysis, with accounting. Instead of us trying to like, dig through the entirety of the company, go through Slack, go through memos, like we involve other team members in that process and say, Hey, like we saw a 10% shift in marketing, like, can you tell us what happened?

So it just allows that process to like move more quickly versus us having our one little window of finance perspective trying to figure everything out. I think outside of the normal processes like. We’ve been way more involved in establishing things like pricing for our platform. So pricing, we’ve always just done the same thing.

We’ve always had a markup based on the service that we deliver, and that, that’s never changed. But in this kind of shifting economic, environment, we’ve realized like, hey, maybe there’s opportunity to provide some sort of volume discount or have more of a, dynamic pricing [00:11:00] experiment going on. That was a perfect opportunity for finance to come into engineering, to operations, to marketing, and have a discussion about what can we actually charge and still make money on.

And that was something that never happened in the past before. So, that’s a great project. We also were looking at commission structures, and that used to always just be done by sales. Now we’re taking a finance and sales approach, and the results were just better because our expertise is in numbers.

We know all the costs. We know what our bottom line looks like, whereas people in sales may not have as good of an understanding of that. So those are just a few examples.

Joe: No, I, I, that’s also, it’s great and I love that you start with planning, ’cause I, selfishly, like, you know, as we’re recording this, it’s the beginning of July, we’re kind of like heading into the major planning season. And so, when we get a little bit later, I want to get to it, but I wanna walk through like.

Kind of the collaborative planning process and like each department. So I love that we kind of set the stage there. But I’m gonna, dig in a little [00:12:00] bit and, when we get there. But I think where I want to go first is just kind of like high level, putting this, we’ll call it philosophy or culture into place.

I guess the main question is like, what tips do you have for people or for people in finance to be more transparent? But the main idea here is like, How do you go about making this shift? And you know, we can get into the specifics after.

How Finance Can Be More Transparent

Zack McCarty: Yeah, I would like to claim that it was like a epiphany that I had that was like, we need to be more collaborative. But really it came from our team in saying, Hey, things are changing rapidly and like we wanna understand why. Like we, we hear that. You know, you’re a venture-backed company, like money is such a, valuable asset, and it doesn’t last forever.

And so when things start to change and be different, people want to know like, where is the money going? What’s happening? And it made us realize, like, okay, without this level of education, people just think that we’re, you know, [00:13:00] Setting money on fire or throwing crazy parties and like, none of that’s true, but people maybe don’t realize like how much money headcount costs or how much money like offices cost.

And so it really was had dawned on us like, Hey, we can all be on the same page and speaking the same language if we just give people the information that they’re asking for. And so from there, We started to share finances and then we realized, okay, you can’t just like send the P&L in Slack because people don’t know how to read a P&L.

Like they don’t. We’ve got, probably 89 different GL accounts, like, and that’s nothing compared to others. And so for us, we said, okay, how do we dilute this information down to keep it financial, but in a language that a marketing professional or a salesperson can understand and actually take insight from?

So I think as far as tips go, I would start with just data and throw it at people and let them tell you, Hey, this doesn’t make sense, this does make [00:14:00] sense. Let them ask questions and you can start to form in your head what is the best way to present this information to where it’s gonna tell them a story.

‘Cause our brains work very differently on the finance side than someone on the ops side. And I think instead of trying to guess what they think they’re gonna want, let them tell you so. And then from there, just be willing to educate, be willing to answer questions. Open up a dialogue because you’re not gonna get it right the first time.

And there’s going to be a continued practice of hearing the same questions and answering them, what does gross profit mean? What goes into our take rate? You know, those are languages or those are words that we use every day that these people are never using. And so I think, uh, start with the data. Be willing to educate them.

And just be consistent. You know, don’t just have one meeting where we go over the finances, like make it a monthly thing or a quarterly thing. You know, that’s one thing that we loved a lot about Mosaics kind of sharing capability, is like, we spun up these [00:15:00] dashboards and now every people are using them on a daily basis, you know, and they, they’re making requests to add new charts and things like that.

And with features like Metric Builder, like we can get really, really nitty gritty on. How do we portray this information for them? So I think, uh, it’s one way that Mosaic has really helped us, achieve this goal of financial collaboration because we can actually give them the information in the format.

We can give them the numbers that they want and it makes sense.

Joe: first of all, thank you for the, the product plug. much appreciated at Spoiler. Similar for everyone. Uh, Zach, Qwick, Fantastic Mosaic customers, so we appreciate the business, but also like, just logistically, so love that you’re sharing and that that’s, you know, we have a case study with you all because we’re so proud of like the, the collaborative work that you all are doing in the platform.

it’s kind of one of the core pillars of what the founders like want to achieve when they built the product. I’m curious, like a follow up question there is just the logistics of kind of sharing that out. So they have access to [00:16:00] these dashboards, but like, do you have like a monthly. Cadence of meeting with each department, and like I said, we’ll get into the details in a little bit for like planning specifically, but I’m curious like what the package looks like around having that dashboard.

When are they coming to talk to you? Is it all ad hoc, like just curious, logistic wise?

Zack McCarty: Yeah, I, I think that we’re still painting that picture and figuring out what cadence makes the most sense. I think that, Stage one was just getting the information out there and educating people on what it means. I think stage two, and I’m sure we’ll get to this a little bit more later, but it’s okay, how do we hold people accountable to the goals that we’re planning together?

what does that cadence look like for a conversation around, Hey, here’s what you said your goal was. Here’s where you came in at. How should we adjust? What can we put in the plan? And so I think, right now we’re sharing everything. The dashboards are real time, so they can go in there whenever they want.

but then we have kind of a more formal package that we share out [00:17:00] once a month. And then every time that we do a board meeting, we, have all hands and we do, we simulate the board meeting as a company. And so one of our objectives is to basically get all of the materials for the board meeting into Mosaic so that we spend a lot of time like copying, pasting, formatting, and.

Essentially it’s like a lot of work that we do over and over and over again. So we’re trying to get to a point where we can just create the board deck in the mosaic, share it out. They can check whenever they want, but then so can our team and our team can see like, here’s what the board is concerned about.

Here’s what they’re looking at all the time. And so, I think we’re still learning what the process looks like. We haven’t like, Really systematized it yet, but I think coming into this planning session is gonna be, or for next year, it’s gonna be kind of step one of saying, okay, here is what we’re gonna do formally moving forward.

We’re [00:18:00] gonna meet once a quarter, we’re gonna, look at historicals. We’re gonna make action plans and we’re gonna go from there.

Joe: I love that we get to have this conversation like, as you’re kind of learning all of this, I think it’s a, it brings a great perspective, especially since, you know, the takeaway for from this episode should be like, Hey, like, you know, if you don’t feel like you’re one of these collaborative finance orgs, like, here’s

kind of your, your stage one of, of how to go make it happen. I have, two follow up questions that I want to do before we get into like the deep dive into that planning session, that you were talking about. And the first is just that as you’re kind of going through this, is there anything you learned about putting this culture in place that surprised you, through the process since you’re so early?

yeah. Just curious if there’s any big surprises.

Zack McCarty: Yeah, I think, couple things. The biggest thing that surprised me was how. Basic financial information can lead to valuable change in the company. So a specific example of this is we have a referral program, [00:19:00] as most marketplaces do, and it’s our, one of our largest acquisition channels. so we have two-sided marketplace supply demand.

This is for the supply. We get a majority of our people from referrals. And during Covid we jacked up the referral to like a hundred dollars, to work a first shift. And we just saw first shifts go through the roof, but over time we saw this dramatic drop off where people had figured out, I just gotta work one shift and then I can get the hundred bucks and basically get outta here.

And we realized that what started as a great acquisition channel from a numbers perspective, from a financial perspective, It was not doing so well. And so when we started to create these dashboards, we created, a marketing and operations dashboard strictly around like, what we’re spending on referrals, but also some unit economics around like, what does our gross profit per shift, what does our gross profit per, worker, we call ’em, [00:20:00] freelancers.

And immediately when this was shared, Light bulbs went off saying, Hey, we should probably change, the referral program a bit. A hundred dollars is a lot for one shift. We are doing a lot more analysis, but in the interim we said, let’s just change this before we learn more to be, let’s get them into four shifts before they get that hundred dollars.

And so right away we just saved 25% on referrals by making it deeper down the conversion funnel. Versus just giving out that first shift. I think another thing is just around like commissions and how those are paid out. Like when we actually shared the numbers and compared them to, you know, net revenue and things like that, people are like, whoa, like this could probably use some adjustments.

So even without high level analysis and like digging deep, just giving people a bit of information around. How much money do we earn on a shift? Like that’s something that I can bet you a lot of people don’t even [00:21:00] know at their company from like the base product or base transaction level because they’re not in the finance conversation.

And so just these little nuggets can like help people in other departments think differently about things that have existed, for a while.

Joe: I love that it’s, uh, you know, we talk about this and part of my job is to try to get into like the deep, like nitty gritty of these things and get like the kind of advanced use cases. But, you know, I think it’s important to remember that it’s not. Just about kind of getting to that third level of value, like just taking one step, can do a lot for any company, not just in this conversation, but in like any conversation where you’re starting zero, like just taking that first step gets you, quite far.

So that was really cool. Those two examples are really great.

Zack McCarty: Yeah, I mean, when you start from nothing and then you get something, I think it can go a long way. And I think there are basic conversations that any employee at a company should be able to answer about the company they’re working at. what are your profit margins? You know, how much money do you guys earn on a bottom [00:22:00] line?

You know, things like that. if you’re sitting at your company and you’re like, I have no idea. Like what we’re doing, I don’t know. I might say something and say, Hey, like this could be helpful for you. And so, that’s where we started was helping people answer if they were to sit down at dinner and people said, how’s quick doing?

They could speak intelligently about it.

Joe: That leads nicely. So I, I say I had two follow up questions. That was the one. The second one is, I wanna know like the other perspective a little bit, and I, I’m curious what you’ve heard from, as far as feedback goes from leaders around the company. Like, do you get people telling you that they can sit around the dinner table to sort of explain, I’m curious if anyone has come to you and, and talked about what value this has brought to them.

Zack McCarty: Yeah, I mean there’s, there’s been an overwhelming amount of gratitude for. Even just starting this conversation because at the end of the day, we have a lot of people at Quick that really care about quick and the success of it, and it’s hard to know how we are truly doing without seeing the [00:23:00] finances. So we’ve gotten a lot of high praise, I think, it’s not necessarily negative feedback, but things that we’re also learning is like a hundred percent transparency may not always make sense.

there are certain things that, you know, just by. Sending it out there with, without any context given, could cause for alarm. an example of that is like our AR balance. So like we pay our freelancers immediately when they clock out of a shift and then it takes, some clients are on instant, like credit card are bigger clients, they’re on net 30 or net 60 terms.

So we pay the money right away and then wait for that to come via check later on. So when we’re doing, you know, the size of revenue that we’re doing, it also means that the, the AR is quite high and people that have no grasp of like what AR is and what it should be, they’ll see this big number and they’re like, what are we doing?

Why are we not collecting our money? You know, and it causes for panic. And so there’s definitely [00:24:00] certain areas where we can add more context or think more strategically about how we share this, because, like you don’t wanna share salaries, right? For with everyone. Some companies may disagree, but you just have to think more carefully about that kind of stuff.

But as far as feedback goes, I think a lot of the feedback has been, this is amazing. Can I also see this? And so we’re, we’re getting into that kind of second level of deeper analytics and, analysis for people because they’re now understanding the fundamentals and now they want to go deeper. And so that’s something that we’re excited about cause we love, we nerd out to that kind of stuff.

Joe: I love to hear it and I, I, I want to get to the nerd out part. I, I keep mentioning it. We’re gonna get to the, the planning season stuff, so let’s talk planning season. it’s something that we’ve wanted to create some more content about. Like every year now we kind of hit this time of year.

It’s like, okay, time to start sharing some, some deeper insights about planning. I want to get to like department by department, but since you’re talking about, kind of putting this in place for the first time, I’m curious, just off the top, [00:25:00] What does your sort of planning season look like? What does your timeline look like?

What are you expecting, to do for this process over the next, you know, six months or so?

Collaborative Budgeting and Planning Processes

Zack McCarty: Yeah, so I’ll answer this question with, a little bit of story just because last year was, like, truly our first real planning season. In the past we just had a CFO that kind of threw stuff together, and it’s hard when you’re one person. Last year was, I would say, the beta of our test, of our planning season.

Because I had just come into the role. We didn’t have any type of system like Mosaic to help us think, we were, we were implementing Mosaic and planning at the same time. So, last year we created a spreadsheet called the Brain Dump, and we had every department basically, Put all of their headcount.

They thought they would have any, software tools they would need, any events they were planning on hosting or going to. And we just dumped [00:26:00] everything in the sheet and said, okay, at least we have a parking lot. We’ll figure out how to get this into Mosaic. once we have it implemented this year, you know, we’re nine months, 10 months into, like, into Mosaic and everybody in the company knows about it.

Everybody uses it. So now I think. We’re gonna approach this next step in saying, let’s take a good hard look at what happened last year and where did we miss from what we put in that initial brain dump, and why did we miss really assessing how we can get better at this in the future? And I think in looking at next year, it’s just starting with the conversation, Hey, what plans do you have for next year that is completely different than what we did this year?

‘Cause obviously you gotta start with what we did this year. Or what did we do last year that we’re not gonna do this year? And so I think that’s step one. And step two is always like the first draft, seeing where your bottom line comes out. What are you gonna burn for the year? And saying, [00:27:00] okay, that’s too much.

Or, oh, maybe we should burn a little bit more. that’s a lot of the song and dance that we’ve been doing is like having the conversations, getting everything into one place, seeing what the output is, and then readdressing from there. for us, every department is historically been the same, whereas this year we need to take a little bit different approach, really drill into marketing.

That’s where a lot of the spend goes. I think headcount is the biggest opportunity for us to improve because last year we just kind of threw everything into the sheet and didn’t follow that at all, you know, because, Different needs arose. You know, leader has moved on. People move and decide they get a better job somewhere else.

Like we really need to laser in kind of what we think we’ll do from a headcount perspective. Cause that’s like the biggest cost driver. I think again, mosaic will be a tool that, that can help us do that with, the fun, the features that it has there. So, this year, I think we’re also going in with the theme of conservatism [00:28:00] is better.

we have in our initial year is just fired off like a rocket ship, like recognized as, you know, a top growing company. Like we went into planning this year saying we’re gonna freaking kill it this year. And I think a lot of companies did that. And a lot of companies quickly realized the growth they had thought they were gonna do just isn’t happening this year.

And so I think. A lesson I learned from the previous year was like, let’s start with conservatism. You know, it’s better to, it’s better to kill your goals and knock ’em outta the park versus come well short. And so I think with that lens of having this past year of, you know, a little bit of obstacles to overcome, we’re gonna go in with a much more realistic approach and say, okay.

Let’s put this plan together so that we know we can do this. Because it’s much better to be hitting your plan every month and the board seeing that, investors seeing that than having to answer the question, well, why are we missing, you know?

Joe: Totally. last super [00:29:00] quick, like logistical question. What does your, what does your timeline look like? Like when are you, I mean, it’s July 5th. I don’t know if you’re already in the middle of planning season. I get different answers from different people, so I like to sort of understand roughly like.

When do you start and maybe like some stages and like where do you plan to have that draft? Sort of like finalized for the year?

Zack McCarty: Yeah, I think, we’re undergoing a, a little bit of change right now and we’re putting, like, we’re moving banks, for example, so like that’s been a lot of work. We’re basically gonna start probably within the next four weeks because we wanna be done come like middle of Q4 versus being done on January 1st and then having to revise it.

And that was another mistake we made in the previous year was like setting Jan one as a deadline to be done with the plan. Not a good deadline because it’s gonna change like 20 times after other people see it. so yeah, I, I think we’re gonna start really soon [00:30:00] and go into it with enough time to have the conversations we need to have to circulate the different drafts and have people give feedback on them and give us enough time to change it as much as we need to in order to be ready to go by, quarter one.

So, It sounds like it’s a long time, but things change in business really quickly, you know, and I think for us, the longer that we can commit to this process, the more intentional we can be and making sure that we go into next year with a plan that everybody is aligned to, is educated on, is excited about, and that will just make our jobs easier next year on the finance side.

Joe: Love it. all right. I have said it multiple times, but we are, we are gonna get into sort of department by department you mentioned, I assumed, I, I just kind of wrote down sales, marketing, R&D, G&A is like the, the major buckets, but we can walk through it however makes sense to like quick’s business structure.

And you said [00:31:00] marketing, you know, is the biggest one, is the example. So why don’t we start there. Let’s talk about like collaborative planning process with marketing at Qwick to nail like your 2023 planning season.

Zack McCarty: Yeah, so with marketing, there’s like a few different buckets that are all their own individual forecast because of how large they are. first of which is, so we have, like I said, a two-sided marketplace. So we have to onboard the people to work the shifts. And we also have to onboard businesses that need staff.

And without the two together, we don’t have a business. So we have separate GL accounts for advertising to freelancers and advertising to businesses, freelancers we need a lot more of. So that is typically a larger expense, and we do that by posting to job boards. So indeed, Craigslist, you know, what have you.

That job board account is one of our largest expenses across the entire company. And there’s a specific,[00:32:00] full-time person that that’s their job is managing those job boards. They’re our relationship with the third party vendors. And so we sit down with that person individually and talk about how are we approaching,freelancers a cquisition next year.

You know, in the past it’s been. Onboard them like crazy. In, in other stages it’s been more dynamic, like wait for the demand and then hire. So it’ll be more of a strategic conversation around, you know, is it set it and forget it? Is it, allocated differently by quarter? Because we are very seasonal.

Like our, our summer months are slower, our q4 is massive. So seasonality is a big thing we think about, and that’s just one expense bucket. The next one is like our branding accounts. So like our events, we have an events team and we go to a lot of, conventions and things like that. So it’s basically figuring out what is the calendar of events for the year.

Where are we gonna be super involved in? Where are we just gonna be participants? [00:33:00] What organizations do we have to join in order to be at these events? who’s gonna be there? What’s the kind of per diem for their food and stuff like that. We’re kind of developing those principles for the first time, and so the events is another huge bucket.

And then everything else, oh, our referrals as well. We have an entirely different person based on the referral program and kind of what we’re gonna do there. And so, that’s a bit of marketing. And then with every department we have a separate conversation about headcount. You know, who are you gonna need, why do you need them, stuff like that.

oh, as, as well as tools. So last year, like we bought Salesforce, so we needed to sit down with sales. And say, Hey, like, what are the tools you’re gonna buy? Salesforce? Great. That’s like a bunch of money. Let’s get that in the plan. so that’s marketing. I think for sales, it’s, again, tools. People, they don’t really, uh, they use some software like a ZoomInfo, for example.

Really it’s commissions. That’s like the longer conversation of how do we [00:34:00] project based on our revenue forecast, what our commissions are gonna be, and we do everything on a city by city basis. We’re in 23 markets. So also figuring out how do you budget bias on a city level to get that level of granularity.

Joe: Wow.

Zack McCarty: On the engineering side, we look at our hosting expenses. That’s kind of the big bucket for them. And we’re not engineers, so we don’t know how AWS scales and doesn’t scale. So we have to have someone tell us like, are we good? Are we gonna stay flat with our hosting expenses? Do we expect them to go up?

Kind of what, what does that look like? And so what our plan really is now that, mosaic has like different tabs for top line is basically creating a different brain dump from earlier, but getting it all in Mosaic so that we can like very easily reference it where we need to. Have kind of really granular department forecasts.

And then once we have all that [00:35:00] information gathered for each department, we will make a dashboard, Hey, here’s the plan that you said you were gonna do. And so they can visually see everything that from the conversation that we had. And so that is gonna be a little bit of our approach for this year, and I think it’ll teach us.

A lot about what to do next year, ’cause this is really, like I said, our, our first year where we formally kind of approach it. Their other departments are mostly just, headcount tools, stuff like that. We do have a separate, we have part-time employees that work kind of on their own schedule.

They help us do, we do orientation or like a video interview with every freelancer. So we have young people that can commit a few hours a week to do that. We have to think about that a little bit separately too. but that’s, that’s kind of our planning as we know it today.

Joe: Okay. I have a lot of follow up questions. This is all great by the way. Uh, so appreciate kind of the overview of how you like, speak to each of [00:36:00] these departments. we have a, a lot of content in Mosaic about sort of like top line planning ’cause obviously it’s, it’s like the most flexible part of. you know, what most SaaS businesses will do, and we’re getting more content about headcount planning, but I find it has the most sort of like abstract nature to it.

Like the answer is really like, well, we talked to ’em about who they need and like why they need them. But I’m curious if you can, maybe pick a department, where maybe those conversations are more challenging. I think for a lot of people it would be marketing because it’s like, It’s not like sales where it’s like direct headcount, like to sales capacity.

But I’m curious like if you can dig a little deeper on what that conversation about headcount looks like and how in finance you decide like, or if you push back on like whether or not those people are necessary and how it fits in

Zack McCarty: Yeah, I think historically finance, at least at Qwick, we have never pushed back, and I think it’s a lesson that we’ve learned is that. We actually do have a [00:37:00] voice, and now that people have the data that we have, then they can understand like maybe why we might push back in the future. only because I, I, I think, you know, we need to, and I tell people like, if you saw somebody bullying someone on the street, like you’d be in the wrong for, you know, saying, not saying anything.

 not the best example, but anyways, I think. Let’s take engineering for example. That is a department that really just depends on what the goals are. So last year we really said, okay, we really want to move to like a cloud data platform. We didn’t have like data analysts or data engineers or data anything on the team.

And so we had to really explore. Okay, tell us what that looks like from a team perspective. When I think about the people team, or recruiting like. We need to kind of develop analysis around what a capacity for a recruiter truly looks like and understand, okay, [00:38:00] because all the other departments said they were gonna need this, many people, we’re gonna need this many recruiters to, to reach that because we know, I don’t know, a capacity is 50 hires for per recruiter or something like that.

That’s probably too much, but you get what I’m putting down. I think, um, for marketing, it really also depends on. You know, what new initiatives are we starting this year? Like last year we started to invest a lot more in pr. We formerly had third party kinda external partners in pr. We brought it in-house and hired people there.

So I think it’s, it’s super qualitative, in how you do it. We don’t have necessarily like a blueprint formula for plug in these inputs and it spits out your headcount. But I think where we can push back is. You know, where do we asking the question, where do we need people and where do we need like automation or additional software?

Or can we take somebody from another team that maybe doesn’t feel challenged [00:39:00] enough and really give them an opportunity to grow their experience doing this thing? I think right now, especially in this. Shift from growth to profitability being a priority of a lot of companies. Like that’s kind of the, the, the frame of mind that we’re using is like, who’s doing, like who can we use in other places to maximize the value they can provide?

so from a headcount perspective, that’s a little bit about, we do, I’ll also say from a top line planning perspective, for us it’s an absolute mess because we. We’re an on demand company in that we don’t have contracts, we don’t have commitments, we have a lot of seasonality. There are macroeconomic things at play, and so that is primarily the most of our time in planning because it, it dictates everything else.

our revenue that we can capture tells us what we can go spend, who we can hire, and it’s not a mess. We’ve got a great process for it, but it’s very [00:40:00] hard being that. We’re not a, you know, recurring like recurring revenue is not even a, a term that we use here, you know, because it’s so up and down and left and right and it’s just, it’s very hard to predict.

Joe: Yeah, the, the process isn’t a mess. Just the, the, the concept of top line at a company like yours is messy, I would probably say is, uh,I’m curious, this is all, this is all awesome. I appreciate the practical sort of breakdown on the headcount front. ’cause you know, selfishly for me, it’s, it’s the hardest one for me without a finance background to understand like how those decisions ultimately get made.

The only other question I have, it’s about the top line planning. Are you guys. Pretty much all because of that sort of like chaos up top, all top down. So like you build that top line forecast first, and then you say like, okay, here’s where we think we’re gonna net out now let’s go have those conversations with department leaders.

Or are you building bottom up? Is it combination of the two? Curious, like what, what you guys are doing there.

Zack McCarty: Yeah. I would say at our company [00:41:00] we are right now very top-down, just because the more revenue that we can earn, the longer we can make our cash last, and that’s really what we’re thinking about right now is getting to a point where we make enough on the bottom to support. What’s going on up top.

and so we put a lot of our resources into that as well. Like a lot of our GL accounts are just a, a function of top line. Like we use Stripe, for example, to pay our people. Like the fees that we incur through Stripe are based on how much revenue we do because that’s how much we pay our, our freelancers.

So, A lot of Mosaic. And that’s what another thing we love Mosaic about is being able to use a percent of account kind of forecasting mechanism has saved us so much time and allows us to not have to manually go through every level of the gl. Like a lot of our stuff is pretty much based on revenue.

but yeah, you know, if we’re gonna go do X amount of revenue this [00:42:00] year and grow 50%, we can do a lot more on the expense side if we’re forecasting. 20% or even 10% year over year growth, like where the team is probably gonna look pretty similar, you know? And so it’s, for us, it really has to start there until we’re profitable consistently all the time.

And then maybe we can do more of a bottoms up approach where we can say, okay, here’s what we’re earning. Even if we stay the same, like, here’s what we can do within that.

Joe: I really, I, I like it because I, I think the perception, if you just look at the definitions of like top down, bottom up, it, it looks like the top down is not a collaborative approach because you’re basically just saying like, here’s where the numbers are. Like, okay, here’s where your numbers net out as a department leader.

And so everything we’re talking about is kind of like, you know, making. That top down approach, a collaborative approach as well, not just, uh, the bottom up one. So I think it’s pretty cool. it’s nice to hear that,

Zack McCarty: I think it’s a starting point, like I think. When you, when you start with top down, it doesn’t have to be, here’s your budget for the [00:43:00] year, but we can say, Hey, here’s top down. Like how do you foresee your department impacting, you know, these GL accounts? Because what we spent last year in our early stages could be completely different from we spent this year.

We could spend way more, we could spend way less. So being so, such a young company that’s shifting with the waves of the economy like. We really just, we have to start with top down, but really it’s, we can do a lot within that based on the constraints that we’re given.

Key Takeaways and Career Lessons

Joe: Love it. all right. I unsurprisingly, cause I do this every time I told you that we’d probably go like 45 minutes tops, and I, I was wrong. So I’ve got two, I’ve got two questions for you, to sort of wrap us up here. The, the first one, kind of zooming back out and thinking about your, sort of effort to build a collaborative.

Culture around finance. you said you’re kind of at stage one, so I’m curious, like what, what’s the next thing you’re focused on improving? Maybe, maybe it’s just this planning process we talked about. Cause it’s coming up so [00:44:00] fast, but curious what, what the next step is for you all.

Zack McCarty: Yeah. So I mentioned it earlier a little bit, but one of the things is accountability. In saying, okay, now you have the information, you can track how you’re doing, but we, we need to implement kind of a process for accountability. Not as a bad thing, but just like, Hey, what are we gonna do to correct the action if we’re going way over?

Or, you know, something’s not going, not going well. I think the other thing is building out a absolute kick ass framework for roi. I think when you’re in a startup, you’re just moving so fast and you know, you are more concerned about implementing, growing, and then going on to the next problem. We have a large opportunity in looking back, you know, six months, a year, two years.

At an investment that we made and actually reporting on what we realized from that. And I think a [00:45:00] lot of companies forget to do that step. And so one thing that we want to collaborate with teams on is, is building this framework for, okay, you’re gonna go invest in the sponsorship. Like finance will help you track the expenses, we’ll report out on it, and you can help us with the operational, like, performance of it.

I think that’s, that’s one thing that I’m really passionate about, especially coming from marketing in that. We don’t do that well enough here. So I would say accountability and ROI tracking are, are really kinda the next phases as well as just building a rock solid planning process. One that people know about going into it, they expect it, they think it’s efficient, and it gets us to our result really quickly.

So that’s as I’m thinking about the next year and kind of in my role. What we want to get done. Like those are the three things that if we finish next year and accomplish those three things, I would be like, we killed it.

Joe: Awesome. I love that. I will ask you one last question then I will let [00:46:00] you go. Thank you again for, for taking the time. we ask everyone that comes on. It’s my. Personal favorite question ’cause it zooms us out even further from just finance work. I, I usually learn a lot from it, but it’s very simple.

Just what’s one thing you know now that you wish you knew, when you started your finance career or career in general? Cause you’ve bounced around from, uh, department to department.

Zack McCarty: Yeah, for sure. this one’s kind of funny, but my CFO said it to me a couple months ago and it’s like almost my leading philosophy in finance is that you’re always gonna be wrong, and that’s okay. Like, It is such an impossible job to take every expense account, every person, every transaction, the revenue side, and have your plan be a hundred percent correct.

And I think that’s, that’s what we’re chasing, right? That’s the north star that we hope to achieve, but it’s also not possible to get it a hundred percent right. And so I, I think it’s helped me, be okay when, you know, maybe we missed somewhere, we [00:47:00] were off a little bit here, like we’re a young company, we’re still learning.

but I think knowing that it’s not a failure, it’s just part of the job to be wrong, has relieved some stress. I think for me to, as a startup, I’ve learned that it’s very easy to set goals and metrics based on what you want to do or what you think you should do. And in finance, I’ve learned the importance of setting expectations and goals around.

What we feel very confident that we can do, because when you set out one forecast at this aspirational number that you and your heart believe that you will hit at the end of the year, but don’t necessarily have supporting evidence to that, the company is going to interpret that we are failing if we do not hit that number.

And so I think with whether you’re a C E O C F O CRO, or just a leader in a department, Make responsible financial goals based on what’s happened in the [00:48:00] past and what you think is possible. Don’t just throw out numbers because your team is gonna clinging to that number and if you don’t hit that number, your team is going to, kind of lose steam if you don’t hit that.

So just be intentional, I think with anything that you do. Be super intentional about the goals you set, the things you say because people listen and they will. latch onto the things that you say if you’re a leader. So those are the two things.

Joe: That’s great advice. It’s also, helpful for me as I head into my own planning season is to think about setting my goals. So I appreciate that. Zach, like I said, that was the last question I had for you. wanna say thank you so much for being here, but I’ll, I’ll turn the floor over to you. Where can people go to connect with you?

Uh, if they’d like to. Where can people learn more about quick, The floor is yours, if there’s anything you’d like to promote, now’s the time.

Zack McCarty: Yeah, for sure. I love LinkedIn. I love, uh, kinda bragging about tools that I’m using, books or talking about Mosaic on LinkedIn. So, Definitely look me up there, Zach [00:49:00] McCarty and as well with quick, check out our website. we just recently did kind of a brand new, rebrand, so I’d love to see what people think about it.

And yeah, those are areas that you can find me.

Joe: Awesome. Well, Zach, thanks so much. It was great having you on the podcast. And uh, yeah, hope we can do it again sometime. It was really fun.

Zack McCarty: Awesome, Joe. Thank you so much.

Joe: Thanks man. 

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