Real-Time Decision-Making Tools for Real Top-Performing CFOs

Welcome back to CFO Weekly, where we're talking with financial leaders about how to build efficiency in their teams, create time for strategy and ultimately get results, with your host, Megan Weis. Let's jump right in.

Megan: Today my guest is Rose Punkunus. Rose is the founder and CEO of Sudozi, the strategic finance tool helping operators save time and money through automated visibility into the data that matters most, from approvals to budget variance insights.

Prior to founding Sudozi, Rose was the CFO at a number of hyper-growth organizations, including ScaleFactor, Fundbox, and Uber. At Uber, Rose was the second hire on strategic finance and helped grow the finance organization do hundreds of employees. Rose received her MBA from UCLA Anderson and has an Undergraduate Economics degree from MIT. She lives in Austin, Texas with her husband and two young boys. Rose, thank you so much for joining me on today's episode.

Rose: I'm excited to be here, Megan.

Megan: Yes. Today we're going to be learning about you and your company, Sudozi. I'm looking forward to this conversation, so let's jump right in.

Rose: Great.

Megan: As always, let's start with you your career journey, and how it is that you ended up where you are today.

Rose: Even in college or even high school, I was always a generalist. I love data, love business operations and community, and getting involved in the community pretty regularly. Went through college, and post-college, the first few jobs were fairly analytical. I was actually not in finance, but worked very closely with the finance teams doing data science analytics, whether it's revenue maximization or figuring out different cost structures.

I've worked in peer groups too in finance at Apple and some other opportunities. In 2013, I had the opportunity to join Uber's running pricing. That role was actually in finance, so within the CFO's domain. That was the first time I got exposure to the full spectrum of finance and accounting.

I was a second strategic finance hire at Uber. I oversaw pricing, which meant any new Uber X launch at the time, it was really the transition from Black car to UberX. Any new launch, really different business models. Having a peer-to-peer driver. Thinking about different dynamics in different markets, and working with operations teams and everyone else in the organization to nail that perfect price to achieve our objectives, whether it was growth or revenue.

That was the first time I was in a finance role formally. Was at Uber for about four years, and did a number of different responsibilities, of which was overseeing the US and Canada PnL, so several billion dollars. We were actually still forecasting in Google Sheets because our systems and our technology hadn't caught up with the business growth, but we eventually moved to different systems and much more automation at Uber.

I left Uber in 2017 and joined a startup called Fundbox. They are one of the original B2B fintechs. We have offices in San Francisco, Tel Aviv, and Dallas. I was VP of Finance in that role at that company. That was your pretty traditional VP of Finance role, oversaw accounting, FP strategic finance, and actually capital markets in that role because we did have a lending component of the business.

Fast forward a little bit, took a little bit of time off in Miami a few months there, and started a family. About two years ago, maybe two and a half years ago, actually, we moved to Austin. I was the CFO at ScaleFactor. ScaleFactor was a B2B company that sold software to help automate bookkeeping and accounting services.

Unfortunately, the company didn't quite work out during COVID. There were a lot of situations with the macro environment that wasn't as I expected. I left and started my own venture. Well, I took a little bit of time off first. I reflected on just my experience running finance at these growth-stage startups. The lack of tooling I had to really automate the workflow, and do more, be more efficient with me and my team.

There's a lot of manual data management. I believe that there's a set of tools at the mid-market and the growth stage company that can make the processes in strategic finance more efficient. That's how I started Sudozi. We've been at it for about a year and a half, and working with a number of customers, primarily venture-backed but in some other industries as well.

Megan: I think you studied Economics as an undergrad?

Rose: That's right. Yes, I did.

Megan: How did that, along with your early experience with pricing, how do you feel like that gave you a competitive edge as you progressed along your career?

Rose: It's a funny story about Economics. I stumbled into economics because I actually started out in civil engineering and a couple of other engineering options. I was playing volleyball and I was like, "I don't feel passionate enough about these engineering degrees to trade off being in athletics." I chose the major that actually didn't have many labs that I needed to attend, but I was fascinated by economics anyway, so I was like, this is a great major to pick. That's how I wound up studying economics at MIT.

What a fantastic program to study, economics. You have the best professors and thought leaders in the area whether it's macro or micro pricing. It's hard for me to reflect on any specific course, but at MIT in Economics, you're taught to think a certain way, think about opportunity costs, and think about things that are not directly measured. That way of thinking has really, I would say, given me an edge, not just at Uber but everywhere else in my career.

Megan: It must have taken a lot of courage to leave the corporate world and launch your own startup, especially in the midst of a pandemic. What has that experience been like and how did you work up the courage to do that?

Rose: I really feel passionate about bringing more automation, whether it's workflow automation or AI, ML automation to finance and accounting. I think if the data is not systematically tracked in a workflow, and it's not digitized, it's very hard to do the forecasting. That's what I saw in a number of companies, where spreadsheets are great, but we as a finance profession, were, I would say, losing opportunities to be more efficient in our work by using spreadsheets for every part of the process.

There are parts of the process where, whether it's if it's a brand new business or things that are changing every week, you should probably use Excel or Google Sheets. There's nothing as dynamic as that. As the process gets more regular, as the forecasting and the business model start to stabilize a little bit, you can apply more automation.

I just felt really passionate that we're at this inflection point in the finance and accounting profession, where the people who are leaders in this area are open to more technology, and there is an opportunity to bring more technology to the profession.

Megan: Let's talk about Sudozi. First of all, where did the name come from?

Rose: Well, the URL was available, so that was a big part. I was actually born in Shanghai, and I grew up speaking Chinese with my parents. It means, basically, bean-counting in Chinese. It's a little bit abbreviated, but there's a joke that accountants are bean counters and they're just counting beans, which is not always true, especially these days, but it's a play on that bureaucratic and old-fashioned way of thinking of things, but bringing a modern edge to it, which is what we're doing with our software.

Megan: Let's talk about the software. How does it work? Does it sit on top of ERP or how does the product work?

Rose: Great question. We have three primary features. One is our vendor management system. Right now, essentially, most companies are keeping track of their vendors in the system that they pay the vendor. Whether it's Bill.com or maybe Stripe, you don't have a comprehensive list of vendors. with the contract information there, with the point of contact

Think of Salesforce, but for your vendors. If you pay something by wire, is that going to be in your Bill.com? Maybe, maybe not. We have a vendor management system that allows you to, essentially, store all information about the vendor, including different services, so that as you are forecasting and building up your budget, you have all the different services, the cost per seat, and all the data that you need for that vendor. That's for mainly existing matters.

Then we have requisition automation. Essentially, an approval process that is customizable on the front end. Let's say you have a policy where anything above $10,000 needs to be reviewed by FP&A, and anything over $25,000 needs to be reviewed by the CEO.

You can essentially automate those rules in our platform, so that it saves time for the finance team, and also saves time for someone requesting a new contract. They don't have to go read the expense policy. They feel more confident submitting the request and being able to track all the steps and the approvals that are needed and so that's very customizable.

Then the third part is where it does sit on top of QuickBooks and NetSuite, Essentially, we do a budget tracking of budget reporting workflow. Today, there are other FP&A forecasting tools and whatnot. The companies that we have are maybe a little bit young for a full-blown forecasting and planning tool, but they do need something to help automate the tracking of their budget.

Let's say you've put out a budget and the board's approved it, and now it's month end, what's your process? Your process is probably going to QuickBooks, download your GL or download some report, and then put that into Excel, do some look-up formulas, and have something that compares this budget line versus these four or five GL accounts. It's highly manual.

What we allow is for an individual, a finance leader, to upload their budget, and then hook that up directly to your QuickBooks or your NetSuite. Then you can map multiple GL accounts to one budget line, you can actually give permissions for different GL accounts to different business leaders so that it's much more dynamic permissioning.

If you want to enable your business partners to really be owners of the company, you want them to have the transparency for the transactions that are related to their department. We see marketing leaders come in. You can set up your configuration where you have just your marketing accounts that they have access to, and essentially, from end-to-end, the requests of vendor management to the budget tracking, they have all of their financial needs in one tool.

Megan: Sounds like a really cool tool. Ideal client, what size or industry? Or is there an industry that it's more compatible with?

Rose: Right now, we work really well with software companies or marketplace companies in, I would say, the 100 to growing to 200 employee size. Why? Well, because those companies, have a finance team, three or four people between accounting, the Controller, FP&A, and the Head of Finance. They are trying to do a bit more automation. They're being asked within their companies to really be thought leaders, and what we call business model architects.

In financial accounting, you always need to do the reporting and you always need to be the source of truth for the metrics, but more and more of your job, is now partnering with other departments to help them forecast what is the most impactful thing they can be doing for their company's growth, whether it's new products, whether it's marketing lovers. We want to enable those small but mighty finance teams to automate more of the reporting component and spend more of their time partnering with different department leads to help drive growth for the company.

Megan: You wear a lot of hats. You're the founder, you're the CEO, you're the CFO. How do you balance all of these roles and life?

Rose: Well, the first thing is I have an amazing team. I'm not doing any engineering, I'm not doing any coding. We have a really fantastic product and engineering team and design as well. The other aspects of the role, the sales, the marketing, the investor relations, with any role,-- it doesn't have to be the CEO role, it doesn't have to be the founder role, you have a certain number of cycles and hours in a day you can dedicate to work really evaluating the prioritization and thinking about how the effort I'm putting into one specific task is going to help the company and help other employees at the company. There definitely has to be a line drawn, and I don't get to do everything I want, especially with family too, but we make it work. I'm enjoying what I'm doing, which is very important.

Megan: You've worked for Uber, you've worked for the ScaleFactor. Now you have your own startup. How have these different experiences influenced your career as a CFO, and in what ways?

Rose: I've really been able to see the CFO role from a couple of different perspectives. Obviously, earlier on in my career, reporting up through the CFO, so from like an underneath perspective. Then being in that VP of Finance and CFO role myself, and now is the founder, CEO, and CFO hybrid role.

I think the profession is really fascinating. I think the CFO's mandate at companies is becoming more and more about that business partnership, and about driving growth for the company. The best CFOs I've seen really could wear multiple hats at the company, and particularly a much more analytical one than-- the trajectory is being much more analytical, and helping with the forecasting, and helping with the predictions at the company.

Megan: Wearing your CFO hat, what are your priorities when it comes to growing Sudozi? How are you deciding where to allocate capital? How do you grow a business?

Rose: It's really interesting, especially during these times because when we raised our seed round-- well, when any company raises any round-- there are some expectations for the milestones that you need to meet for the next round. Every company that raised a round last year now is having their next round milestones shifted in different ways, some industries more than others.

There's always a balance of what time period your objectives are for. We could be building technology that helps our customers in a two-year time frame, or we could be building marketing campaigns that help us get more customers in a six-month time frame.

Before allocating resources, really evaluate, with me, my team, and the board, what are the goals, and what time frame are we actually trying to optimize for. There's not always going to be a clear answer. It might change every day, but having that general understanding then allows you to allocate both dollars and time. Should I be doing more work with a sales demo, or should I be reconnecting with another customer we have? It's tricky, and it changes day by day, but that's the fun of it.

Megan: You're a self-proclaimed data nerd. What is your advice to companies? There's so much data available these days. How do you know which data is important and which data you can ignore?

Rose: That's a great point. The answer changes for different situations, but I like to go into projects and into discoveries with a little bit of a thesis, and then you can argue that then you're just chasing that data to validate your thesis, but sometimes the data doesn't validate your thesis.

This is the general criticism of all machine learning. You almost can always, if you look at a data set in enough ways, you can almost always prove something. I think it's important to have, even if it's the approach of how we should look at something and I don't know what the answer is, having a little bit of a hypothesis going into something, I think is important.

Then being aware of when to extrapolate data, I think is very important. I think something that I've seen is potentially data misused is you run an AB experiment and it results in A, and then your company decides to do A, but then the future state of that company is actually very different from when you ran that AB experiment. Maybe you ran that experiment only on mobile users, and now you're extrapolating it to all users.

Really being careful about, even if the results of your experiment were X, should we actually apply that and make further decisions based on that? I think that's something that I've seen that I think companies can be more careful about, is just understanding what the future state is, and if it's similar enough to the state that the experiment was done on.

Megan: Your software powers real-time decisions and revenue optimization for millions of users. How vital are these real-time decision-making tools for CFOs?

Rose: We have a couple of different places where we do believe there's this true real-time decision-making. One is on our request. We call it a spend request workflow. At the companies that we partner with, sometimes people are signing contracts, but they don't know that there is an approval process.

The finance team gets surprised by an invoice. Let's say it's a $20,000 invoice and they're like, "What is this?" What we allow is to have a standard process, I would say like a pre-approval process. Even before the invoice gets generated, having the ability to course correct, even optimize, or maybe even sign a bigger contract.

There are opportunities in real time. Potentially these are Slack messages or emails that sometimes come across.

If you don't have a consistent process and policy around getting approvals for things, you might miss opportunities to interject early. That's one area.

The second area is what we call real-time budget tracking. Essentially, here, we take advantage of the corporate cards today that do have automated rules and can essentially get booked in near real-time. You don't have to wait until month-end to look at, in the specific account, if the transactions are flowing through it, and if there isn't accrual treatment or any fancy treatment you need to do on this transaction. You can actually start to build up in real-time what your budget versus actual is for certain accounts.

In this case, the most popular one is marketing, where you can see how your LinkedIn ads, your Google ads, and your Facebook Meta ads are trending throughout the month because you're getting charged for them throughout the month. Of course, you can do this manually. You can pull reports from these tools, and then plug them into your spreadsheet and do a bunch of work, but we essentially connect those dots right away. You can very easily see, visually, where you are trending with a particular marketing budget.

Megan: Are there any other tools or technologies that you're using as a CFO that is helping to make your life easier?

Rose: Oh, yes. I'm a big fan of testing out different tools. Obviously at Sudozi, we use Sudozi. I like QuickBooks. We have a set of software products that sit on top of QuickBooks really nicely. QuickBooks is great to do all the basic things you need to do with accounting.

Of course, we use Slack heavily in terms of communication. The notion is another one our team uses, particularly for product planning, and design. Our engineering team uses GitHub. I think there are a number of tools these days that just help make our communication and workflow more efficient.

Megan: What advice would you give to CFOs who are just starting out as a CFO?

Rose: I think it's very important to build those relationships with your other department leaders and understand what are the levers that can really help drive their output. Just being friends with them is important. People like to share information with people who are nice, and are friendly, and are fun. I think building those relationships which will facilitate the two-way data transfer into communication is very important.

The second thing, I'd say, focusing on your own team. Understand where you're strong and where you could use support. Personally, I've done accounting on the job. I haven't had formal training in accounting. I've always enjoyed working with really strong controllers and accountants. I narrowed out on different things, but I found that really important to hire for complimentary skill sets on the team.

The third part is tooling and automation. Think about how you can make your team efficient. Think about what's going to incentivize someone to join your team. Is it a lot of data management, or is it going to be more business partnerships and having the data components automated? That's where the tooling comes in.

You don't need to go out and buy $100,000 software. There are many other tools on the market today, including Sudozi, that help you make your processes more efficient. I would encourage CFOs to be a little bit adventurous and test things out with the tools that are on the market today.

Megan: You posted on LinkedIn, "For any finance leader today striking the balance between continued growth and burn, minimization is key." What is your advice for doing that? Because it's not easy these days.

Rose: Again, it depends on the company, but if you start with a couple of objectives, so let's say you want to have at least 24 months runway, maybe 30, depending on the industry you're in, and then working backward. What do you have to believe about your monthly burn? What do you have to believe about your growth rate? Is your revenue going to be impacted?

Because as companies look to cut costs, your revenue is probably someone else's expense. Understanding how the different levers in your business are going to change. I think having that objective function of like, I need to have at least X number of months of runway, and then working back from backward from there. Otherwise, you're going to be going in circles all day.

Megan: As a leader, how have you mentored your team to achieve the goals that you have set at Sudozi?

Rose: I think it's no different from any CFO partnering with different department leaders. We have a smaller team. We're 10 people. I understand, and I work closely with every single person. We have weekly one-on-ones. I want to understand their professional goals and their personal goals and see how I can assign projects, or how they can get exposed to different responsibilities that help maximize one of those objectives for them. I actually think it's very parallel to a larger company CFO role working with my team now.

Megan: What's your advice for breaking down walls and gaining trust with other departments as a CFO?

Rose: Believe it or not, it's actually very hard to startle me or get me really rallied up. Even when marketing leaders have accidentally bought 2X of some campaign that they thought they were buying, I have a fairly calm way of interacting with them. Then it doesn't make them want to hide things for me.

Even if something isn't the best news, trying to be aware of the way that you're reacting to something, particularly over email or electronic communication, can come off in the wrong way. Being aware of how you are reacting to news from different departments or surprises from different departments can go a long way in building relationships with your counterparts. That's one tip I have.

The other one, at Fundbox and other companies, we would organize lunches, and it wouldn't have to be just financed. It would probably be finance and friends. Just having somewhat informal opportunities to get to know the different groups for yourself. For the FP&A, or controllers on your team too, that's helpful as well.

The third thing I found successful is, sharing out to other teams what the finance team is up to. For example, when we went through a Carta implementation, we gave updates. The team who went through our audit, gave, not detailed updates, but general updates to the team on where we are, and what the audit is used for. The more you share with other members of the team, the more they're going to be inclined to share with you as well.

Megan: That's great advice. Lastly, as a CFO, what is keeping you up at night? If anything?

Rose: Oh, everything. Keeping you up at night isn't always bad. It's really exciting to be in the economy at this time and running a company right now. I think it's testing my leadership and testing the leaders at every company in a good way. Thinking about how to navigate the environment for venture back companies, thinking about when to raise, whether it's an extension or the next round. The other fascinating thing, going back to analytics and data, is the models that you've built, are those models still valid? Do you need to change different assumptions about how customers are coming in, and about how growth is being driven at your company?

From a data nerd perspective, it's really fascinating, keeping me up at night. I'd say, overall, I really enjoy the journey. It's about thinking about how I can help grow the company, but then also help grow and work with the people at the company during this time.

Megan: I like that perspective. They're not challenges, but they're adventures.

Rose: Yes. That's right.

Megan: Rose, thank you so much for being my guest today.

Rose: Oh, you're welcome. Really excited to have this chat.

Megan: I really enjoyed speaking with you and hearing about you and Sudozi. I wish you both all the best. It sounds like you're going to go far.

Rose: Thank you. I appreciate it, Megan.

Megan: To all of our listeners, please tune in next week, and until then, take care.

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