Points of Interest

• 0:00 – 1:00 – Opening: Marcel introduces the episode’s focus on financial visibility and growth, and welcomes returning guest Jon Morris, CEO of Fiscal Advocate and creator of EngineBI.
• 1:00 – 2:55 – Jon’s Background: Jon shares his journey from founding Rise Interactive to launching Fiscal Advocate, emphasizing the value of financial insights in scaling agencies.
• 3:00 – 4:30 – Overview of Fiscal Advocate & EngineBI: Jon explains the core services of Fiscal Advocate—bookkeeping and FP&A—and how EngineBI enables forward-looking budgeting, forecasting, and business intelligence.
• 4:30 – 6:45 – Clarifying the Relationship Between Fiscal Advocate & Parakeeto: Marcel and Jon outline how their services complement each other—Fiscal Advocate focuses on company-wide financial health, while Parakeeto dives deep into project-level delivery profitability.
• 6:45 – 8:25 – The Profitability Venn Diagram: The duo discusses the intersection of finance and operations in agency profitability, stressing that complete visibility requires both financial structure and operational clarity.
• 8:25 – 12:00 – The Three Key Financial Metrics: Jon presents his core framework: cash relative to monthly overhead, profitability (target 20% EBITDA), and year-over-year revenue growth (target 20%).
• 12:00 – 15:10 – Managing Cash with Discipline: Jon details a best-practice approach to managing cash through segmented bank accounts—operating, accrual, savings, and (if applicable) media accounts—with clear reserve targets.
• 15:10 – 17:20 – Strategic Use of Excess Cash: They explore scenarios where excess cash should be reinvested or removed from the business, with an emphasis on growth-minded planning or lifestyle-business clarity.
• 17:20 – 22:35 – Accrual Accounting & Forecasting Pitfalls: Jon explains how deferred revenue and mismanaged payment terms can create false security in cash flow and emphasizes the need for accrual-based accounting and detailed forecasting.
• 22:35 – 24:45 – Spending Benchmarks by Function: The episode outlines ideal spending allocations—50% on delivery, 30% across admin/ops/marketing, and 5% on R&D—to balance growth and margin targets.
• 24:45 – 27:55 – Growth vs. Profitability Tradeoffs: Jon advocates for disciplined reinvestment of margin into scalable functions rather than focusing solely on profit extraction, aligning with the “Rule of 40” growth philosophy.
• 27:55 – 33:59 – Importance of Gross Margin Visibility: Marcel and Jon stress the necessity of management accounting to accurately track delivery margin, revealing it as the single most powerful lever for scaling profitably.

Show Notes

• Connect with Jon via LinkedIn
• Fiscal Advocate
• E-Book: Decision-Making Science For Agencies
• Email: [email protected]

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