This week on the Expert Voices podcast, Randy Wootton, CEO of Maxio, speaks with Dawoud Nasraty, Director of Consulting at Armanino. After serving as an accountant at a Big Six firm, Dawood's career trajectory includes roles for a European telecommunications company in Afghanistan and as a CFO. Dawoud and Randy talk about the intricate world of data and decision-making, the technological advancements shaping accounting practices, and lay out the essential lessons and best practices drawn from Dawood's extensive stint as both a consultant and an in-house financial controller. They also discuss the necessity of solid infrastructural investment and why startups often fail without robust financial systems. 

Quotes

• “Sound metrics built on sound data. And a lot of companies that get started, not all, but a lot of them, in the beginning, don't pay as much attention to the back office, the finance, and accounting. So it's important, like finance and accounting takes like second or third place, but it's important to establish a solid foundation in that area sooner than later, not too early, but not too late. So the CFO, the CFO needs to encourage investment in the finance function at different stages in the company's life cycle.” -Dawoud Nasraty [18:18]
• “Someone once said to me that the number one deal killer in M&A is accounting issues and that's because companies haven't done the work, hiring professional consultants, advisors, fractional CFOs to come in and help put the systems in place so the data works and so that they can represent the reports.” -Randy Wootton [11:41]

Expert Takeaways 

•  Establishing strong finance and accounting foundations early is critical for startups to manage reporting and withstand investor scrutiny effectively.
• A coordinated system of record is essential for assembling a 'single source of truth' that facilitates accurate decision-making.
• Overlooking the importance of meticulous financial management and data integrity can lead companies toward a wind-down state.
• Implementing effective technologies can change the game for SaaS companies in aligning with sales teams and managing cash flows.
• Learning from failures and 'worst practices' informs better approaches and readiness for future business challenges.

Timestamps

(00:39) Dawoud’s background

(06:10) Working with a startup company and setting up accounting systems

(12:29) Good data and its role in statistics, finance, and economics

(18:08) Sound metrics are built on sound data

(24:21) The challenge of transitioning from spreadsheets to a solid tech platform

(29:08) The impact of revenue recognition on business metrics

(31:11) The need for a thoughtful approach to data management

Links

MAXIO

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Maxio Institute Report

Randy Wootton LinkedIn

Dawoud Nasraty LinkedIn