“You’re Spending Too Much Time on Planning!” — The Seven Maxims of Annual Planning With Mercury’s Daniel Kang

14 snips

Sep 23, 2024

Daniel Kang, VP of finance at Mercury, explores the art of annual planning. He argues that if planning feels like a finance task, it’s bound to fail. Kang emphasizes collaboration across all departments and offers strategies to streamline the process. He highlights the pitfalls of over-planning and false productivity, suggesting that companies often waste time chasing big ideas instead of addressing core issues. He also discusses how planning should evolve as companies grow, ensuring goals remain actionable and aligned with organizational priorities.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

ADVICE

Time Management in Planning

Limit time spent on annual planning to avoid a false sense of productivity.
Focus on impactful work, not just extensive analysis and strategic discussions.

ANECDOTE

Over-Quantifying ROI

Daniel Kang made the mistake of forcing unrelated items into an ROI framework for comparison.
Sometimes intuitive, gut-based decisions are better than over-relying on rigorous quantification.

ADVICE

Over-Engineering Models

Avoid over-engineering financial models, especially with limited historical data.
Focus on understanding general trends instead of granular, unreliable details.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

Daniel Kang, VP of finance at Mercury, joins CJ for a dive deep into the nuances of annual planning. Dan talks about why if annual planning feels like a finance exercise, it is destined to fail and will feel like pulling teeth. He describes how to use this exercise to lead a broader strategic discussion about a company's direction for a process that is more impactful and less tedious. Dan also highlights that if you’re searching for big ideas during the annual planning process, there may be underlying issues with your company's roadmap or innovation processes. He touches on the idea that planning tends to expand to fit the time allotted, explains why most companies spend too much time on it, and warns against the trap of false productivity. The conversation delves into how the planning process evolves with a company's growth, including how to calibrate for each stage and ensure plans are actionable. Throughout the episode, Dan provides frameworks to streamline annual planning for a successful outcome.

If you're looking for an ERP head to NetSuite: https://netsuite.com/metrics and get a customized KPI checklist.

—

SPONSORS:

Mercury is the fintech ambitious companies use for banking and all their financial workflows. With a powerful bank account at the center of their operations, companies can make better financial decisions and ensure that every dollar spent aligns with company priorities. That's why over 100K startups choose Mercury to confidently run all their financial operations with the precision, control, and focus they need to operate at their best. Learn more at mercury.com.

Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.

Planful is a financial performance management platform designed to streamline financial tasks for businesses. It helps with budgeting, closing the books, and financial reporting, all on a cloud-based platform. By improving the efficiency and accuracy of these processes, Planful allows businesses to make better financial decisions. Find out more at www.planful.com/metrics.

NetSuite provides financial software for all your business needs. More than 38,000 thousand companies have already upgraded to NetSuite, gaining visibility and control over their financials, inventory, HR, eCommerce, and more. If you're looking for an ERP platform ✅ NetSuite: https://netsuite.com/metrics and get a customized KPI checklist.

Maxio is the only billing and financial operations platform that was purpose built for B2B SaaS. They're helping SaaS finance teams automate billing and revenue recognition, manage collections and payments, and put together investor grade reporting packages. 🚀 Request a demo at www.maxio.com/runthenumbers for 10% off your first year.

Leapfin is accounting automation software that automatically prepares and posts reliable journal entries. High-growth businesses like Reddit, Canva, and Seat Geek choose Leapfin to eliminate manual tasks, accelerate month-end close, and enable accounting leaders to provide faster insights to help their companies grow. To automatically standardize your revenue data with measurable business impact, check out leapfin.com today.

—

@cjgustafson222 (CJ)

—

TIMESTAMPS:(00:00) Preview and Intro(02:12) Sponsor – Planful | NetSuite(05:17) Why Annual Planning Shouldn’t Feel Like a Finance Exercise(10:13) Prioritisation Versus Ideation(12:26) Identifying Constraints(15:16) Annual Planning and Looking at Spans of Control(16:05) Sponsor – Maxio | Leapfin(18:37) Driving Upfront Strategy Versus Just Finance(22:35) Understanding Your Product(24:56) Why Most Companies Spend Too Much Time Planning(27:31) Exercises in False Productivity(33:51) Calibrating Annual Planning for Each Stage of the Company(38:05) A Breakdown of Stages to Plan For(41:22) The Importance of Planning in Smaller-Stage Companies(43:26) Processes to Actualize Your Plans(45:19) The Part of the Plan That’s Likely to Break First(46:11) The Time It Takes to Hire Good Talent(47:25) Budgets Versus Actuals(50:38) Quick Hitters: Planning Mistakes, Forecasting for Interest, Tips and Tricks

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit cjgustafson.substack.com