Fractional CFO Insights on Financial Modeling and Business Turnaround with Carl Seidman
What this covers
In this episode, Paul Barnhurst, host of Financial Modeler’s Corner, is joined by Carl Seidman, an experienced financial consultant and financial modeling expert. Together, they explore the intricacies of financial modeling, discuss the art and strategy of dynamic cash flow modeling, and touch on the unique challenges and lessons Carl has gathered from his years in turnaround consulting. They also discuss the broader skills and mindset shifts required for modelers who aim to excel in the complex field of financial analysis and corporate finance.
Carl Seidman is the founder of Seidman Financial and a recognized expert in financial planning, forecasting, and modeling. With experience in turnaround consulting and as a fractional CFO, Carl has worked extensively with underperforming companies and complex restructuring cases. He brings an in-depth understanding of the strategic nuances in financial modeling and cash flow management, which he shares in this episode.
Key takeaways from this week's episode include: The importance of long-term, flexible thinking in financial modeling and planning. Carl’s top lesson learned from a modeling “horror story” and how it shaped his approach to dynamic modeling. How dynamic arrays are transforming cash flow modeling and how to implement them. Why operational knowledge is crucial for effective financial modeling in turnaround situations. The value of networking and formal certifications in restructuring and financial advisory roles.
Here are a few quotes from Carl Seidman: "Financial modeling in complex situations is about facilitating discussions, not just presenting numbers." "A good model tells you the ‘what,’ but the analysis and conversations that follow tell you the ‘so what’ and ‘now what.’" "It's important to know when to push the boundaries of what a model can do and when to keep things simple."
In this insightful episode, Carl Seidman leaves listeners with practical advice and a fresh perspective on financial modeling’s role in modern business. He highlights the value of flexibility, clear communication, and a long-term mindset, particularly in the complex terrain of turnaround consulting.
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In today’s episode: [01:12] – Introduction to the episode and guest [05:44] – Key Lessons in Modeling and Long-Term Strategy [10:36] – From PwC to Turnaround Consulting [16:02] – Certified Insolvency and Restructuring Advisor (CIRA) [20:20] – Diagnosing Cash Flow Issues in Underperforming Companies [28:52] – Embracing Dynamic Arrays for Efficient Cash Flow Modeling [32:40] – Modeling Mindset: Curiosity and Continuous Improvement [37:57] – Rapid-Fire Q&A: Financial Modeling Preferences [41:59] – Advice for Aspiring Modelers: Practice and Experiment [43:30] – Closing Remarks and Where to Connect
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Financial modeling excellence requires long-term strategic thinking about client needs, practical experience through repetition, and adaptive approaches that balance efficiency with auditability based on context and end-user requirements.
- Building models requires understanding future business direction and flexibility needs before construction, not just delivering immediate requests
- Modeling skills develop through deliberate practice and experimentation, not just tool mastery
- Model design must be context-dependent, balancing sophistication against auditability and the end user's ability to understand and maintain the work
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Financial model design choices (e.g., vertical vs horizontal layout, use of named ranges, complexity of formulas, auditability requirements) depend heavily on context: who the builder is, who the end user is, what the organizational constraints are, and what the business environment demands, making blanket answers like 'always use X' or 'never use Y' misleading.
“when I think about financial modeling I think about the who I think about you who's building it and who is it for and if you and I were building something for each other I think my answers would have been very different versus if I am going into generic company and working with average person”
A financial modeler must recognize the limits of their domain knowledge and be comfortable saying 'I don't know' while asking intelligent questions of subject matter experts, because finance professionals are coordinators and facilitators, not end-all experts in every industry or function they touch.
“there's a whole lot more that I do not know and you know enough to know you don't know what we have to be able to do is to know where our blind spots are and know how to ask really smart questions of the people who are smarter than we are”
In turnaround and restructuring work, the party hiring the consultant (bank, PE firm, investor, or the company itself) determines the engagement's direction and priorities, and this principal-agent relationship shapes the entire advisory approach.
“in my work 20 years ago the way that turnaround restructuring bankruptcy work Works in a in larger companies and more complex environments is often times it's uh there was a breach of a of a bank Covenant or there's a default on a loan or something really went wrong and it it wasn't I hate to say this it's actually not the company that's sounding the alarm it's the bank or it's a private Equity Firm... so that would sometimes dictate what the path of the engagement would need to look like if it's a bank I have to represent the bank”
During the 2007-2008 recession, work availability and quality declined at consulting firms, but turnaround and restructuring work increased because distressed businesses need help.
“we hit the recession time back in 20072 2008 and like so many other places you the economic upheaval just caused a lot of challenges the work was not coming in the quality of work was not as good... what's going to be busy in a recession... turn around restructuring distress business Consulting bankruptcy”
Financial Modeling Institute (FMI) accreditations provide formal credential that signals to employers a commitment to professional standards in financial modeling, beyond the immediate value of the curriculum itself.
“I am a huge fan of the FMI for years and I was super excited when they decided to sponsor the Financial modelers corner I recently completed the Advanced Financial modeler certification and loved the entire experience it was topnotch from start to finish I am a better modeler today for having completed the certification I strongly believe every modeler needs to demonstrate they are a qualified financial modeler and one of the best ways to do that is through the fmis program”
Creating and maintaining a distressed company requires constant focus on cash flow constraints—understanding exactly when the company will run out of cash and working backward to identify the operational levers (sales, margins, costs, headcount) that must change to extend runway.
“sure you're looking at the cash saying okay if we don't change something we run out in six months what are the levers we have where's the issues and then I would imagine talking to people really understand the operations to see what can be done”
Named ranges should generally be used in financial models to improve clarity and reduce errors.
“named ranges in your model yes or no yes”
Formal education institutions do not offer undergraduate or graduate degrees in bankruptcy, liquidation, or turnaround management, creating a gap filled by professional certifications like CIRA and CTP.
“it's such a specialized part of business Consulting yep that it's like you know you don't go to college or grad school to learn how to do a bankruptcy you don't go to you know college or grad school to learn how to liquidate a company or how to turn around a company”
Dynamic arrays in Excel are a game-changing feature that eliminates manual workarounds and range updates, particularly the UNIQUE function for deduplication tasks.
“one of the use cases that I first saw just from like a data and Excel standpoint was on the unique function and I was like oh this is a game changer because I've been doing all kinds of goofy workarounds that are not good workarounds”
Many business models and industries follow a volume-play structure where profitability depends on scale and infrastructure rather than unit economics.
“I think there's a lot of Industries where it's become a volume play”
Presenting an outdated financial model to a client due to failure to implement dynamic data ranges and automated updates represents a critical failure that causes lasting embarrassment and career trauma.
“I got to a fin presentation in front of the business owner and put that Financial you know presentation in front of him and he was like this is wrong... the embarrassment of building something that I thought was right that somebody else who'd never seen it before knows that it's wrong that was perhaps one of the more traumatic horror stories of of my whole career”
The most important mindset for financial modelers is to think strategically about where the work is heading and what future requests may come, rather than just delivering what was explicitly asked for in the current mandate.
“always try to think about where you're trying to go before you start to build always trying to think about what are you trying to do where are you trying to go what might this need to be a few months from now and the reason why I say that is that often times you know Paul if you came to me with some mandate I would say okay I'm going to get that across the finish line and I'm done but if I'm not thinking about what you're trying to do why you're trying to do it what you might be asking for a few months down the road that's going to give me a very different framework”
The ability to ask intelligent questions is more valuable than domain-specific knowledge, because cash flow patterns reveal business problems across industries if you know how to interpret and ask follow-up questions.
“I might not have familiarity with this industry but I can ask I can ask you the intelligent questions and you can help give me the answers... you got to rely on Experts it's as much as knowing about asking the right questions and being curious because like you said none of us know everything”
Financial models are not the primary corporate decision-making tool; discussions and human judgment are more important than the models themselves.
“do you believe Financial models are the number one corporate decision-making tool no then what is discussions okay”
Carl's rapid-fire answers reflected context-dependent thinking where many tools and techniques are useful in specific situations but shouldn't be applied universally.
“when I think about financial modeling I think about the who I think about you who's building it and who is it for and if you and I were building something for each other I think my answers would have been very different versus if I am going into generic company and working with average person”
New technologies and techniques should be deployed carefully with awareness of organizational context, maturity, and stakeholder comfort rather than maximizing technical sophistication.
“you have to come up with that that appropriate balance of we know that this works over here it might not be the most robust most efficient but we know that it works and we could take it a step further and do something that's a little bit more you know beta and maybe it works maybe it doesn't but I think that it takes a lot of self-awareness and environmental awareness”
First-draft work (models, content) will likely be poor, but rolling up sleeves and trying creates starting material for improvement through iteration.
“be willing to just roll up your sleeves and try something it may end up terrible it probably will the first few times it's like content creation is I tell people just go ahead and give it a try it will probably suck the good news is nobody will be reading it when you start”
Working in a boutique turnaround firm with minimal support structure (small team sizes, no standardized processes) forced deeper learning than large-firm environments, despite initial discomfort.
“part of the interest that I had in working in a boutique is rather than be on a engagement with 50 people it was me and one person or me and two people or just myself and so I just got thrown into the deep end... the silver lining of it is you have no choice but to learn how to swim and put out that fire and so while a lot of people failed in that environment”
Working in crisis management and distress environments at PWC (disputes, forensic fraud investigation) trained Carl to thrive in chaotic situations, making it easier to later handle both failing and high-growth companies.
“when I came out of PWC I was within the umbrella of Crisis management so I was doing disputes I was doing forensic fraud investigation so everything was just always chaos all the time and I kind of thrived in that environment”
Spreadsheet models tell you 'what' is broken but don't help answer 'so what' and 'now what'—understanding root causes and remedies requires operational knowledge and stakeholder dialogue beyond the spreadsheet.
“the spreadsheet is going to alert you to problems but it's not going to help you with that as like as I like to say the kind of the so what and now what it just tells you the what okay well I got a house on fire how do I put it out”
Cash flow analysis acts as a diagnostic barometer that reveals underlying business problems across operations, sales, margins, pricing, and headcount, not as an isolated metric.
“the cash flow almost becomes a barometer of all of these other driving issues and then to fix the cash flow it's not a wave of magic wand and change some numbers around it's how do we improve sales how do we improve margin how do we get better terms how do we hate to say it lay some people off so all of it comes into play”
The curiosity to ask 'what else can this do' beyond solving the immediate problem is what drives continuous improvement and innovation in modeling approaches.
“there also becomes this this thirst and this curiosity of well what else can this do you know what else would I be able to do here um and so it's not just like a problem solving of oh I have an issue how do I solve it it's I have a challenge how do I make this better”
Converting manual, multi-hour model updates into 15-minute processes provides significant value through time savings and reduced error risk, regardless of the underlying technology.
“it it's amazing when you tap into those type of things whether it's Dynamic arrays whether it's power query whatever it might be when you start to figure out wow I can take this from three hours to 15 minutes it it's pretty amazing”
Practicing modeling on non-critical, back-office scenarios allows skill development without risk, whereas deploying untested techniques in front of stakeholders creates unnecessary risk.
“rather than come to you know Prime Time put your model in front of a client make your mistakes practice on the back end come up with what makes sense when you're in your office at your desk and then you come up with the best solution you've arrived at when it's ready for Prime Time”
Learning modeling excellence requires seeing examples of well-built models from experienced practitioners, which is more impactful than learning in isolation.
“I think that's one of been the most valuable things over the the last few years as I started to really see different ways people model I never had taken a modeling course I just you know you figured it out as you went and I finally had one role where I worked with someone who been in Investment Banking had built a ton of ton of models and a boss my modeling became much better”
The Certified Insolvency and Restructuring Advisor (CIRA) credential provides three primary benefits: formal education in distress situations, validation of expertise for clients, and valuable long-term professional networks.
“what these two organizations really did was they said well let's put that education into the space... it's really in the service of everyone... it's also clearly going to help your clients because your clients are going to say oh we've got Paul who's got this background in this education versus... he's a really good modeler but he doesn't have experience in distress situations... it's more of you've just gone through a very comprehensive Education and Training over many months”
The bank or private equity investor bringing in advisors is typically the party identifying distress in larger companies, not the company itself, because they have financial stake and access to covenant information.
“in larger companies and more complex environments is often times it's uh there was a breach of a of a bank Covenant or there's a default on a loan or something really went wrong and it it wasn't I hate to say this it's actually not the company that's sounding the alarm it's the bank or it's a private Equity Firm”
Senior finance leaders may prioritize auditability and staff comprehension over sophisticated formulas, requiring advisors to sometimes build complex hidden formulas to make simple interfaces for less-skilled staff.
“had a call maybe about three four weeks ago with someone senior you know very senior Financial director at a consulting firm and he was like Carl I don't want fancy stuff I need to be able to audit this... I had times where I've had to go the other route where I've had to come up with really complex formulas to make it super simple for them to do something”
Generally, cell protection in Excel models should not be used, suggesting it creates friction without commensurate benefit.
“should you use sheet cell protection in your model yes or no generally no”
Distressed and chaotic business environments require the same core skills and advisory services as healthy businesses—the difference is context (failing vs succeeding), not fundamental approach.
“when you're working with a business that's in distress or in chaos it's not remarkably different than a business that's doing well it's the same skills it's the same kind of support it's just a totally different context of this business is failing that business is doing fine”
Small backyard doggy daycares cannot generate significant profit due to capacity constraints, while larger facilities with machinery and volume can achieve strong profitability.
“the small doggy daycares that are just really small kind of backyard places can't make much money at all but the ones that really are they've got all the Machinery in place they are big venue or I shouldn't say venue big big facilities those places can do very very well a lot of this is a volume play”
Companies bringing in advisors now seek integrated business operators (fractional CFOs) with expertise in finance, operations, sales, and procurement, not isolated finance specialists focused only on cash flow modeling.
“a lot of these business were not like we just need a finance guy to do cash flow it was like we need a really smart business operator who knows operations Finance sales procurement everything and so I came in and even though the term was not really fractional CFO back then my clients would call me an executive coach they would say yeah we need you to come in and help run our finance function oh yeah but while you're at it we need you with sales forecasting oh yeah while you're at it we need you to have discussions with the bank oh yeah while you're at it we need you to help with purchasing”
Excel will not die within the lifetime of current modelers, indicating its entrenched role in financial analysis.
“will excel ever die uh not in my lifetime”
An Excel user claiming to be a 10/10 in Excel skill without knowing advanced formulas like dynamic arrays demonstrates arrogance and poor self-awareness that makes them difficult to work with.
“had an interview with a candidate for a job and I asked him to rank how good they are at Excel and then we dig into it... have you ever heard of this formula no have you ever heard of this formula no... would you like to change your answer he looked at me very begrudgingly goes fine I'll change it to a nine... this guy does not is not humble at all”
Financial modelers should learn Power Query because it provides value for data transformation and manipulation tasks.
“should Financial modelers learn power query yes”
Horizontal model layouts are preferable to vertical layouts for organizing financial models.
“do you prefer a horizontal or vertical model horizontal”
Fully dynamic models should not always be pursued (Carl's answer: 'no') because they may sacrifice auditability, maintainability, and user understanding for technical elegance.
“fully Dynamic models yes or no no”
Financial modelers generally should not learn Power BI, according to Carl's rapid-fire preference.
“should they learn powerbi uh no”
The engagement model shifted over Carl's career from bank-initiated distress consulting to company-initiated consulting, where the company itself identifies pain and seeks help rather than external lenders forcing intervention.
“since that time I mean since I started my business over a decade ago I rarely get brought in by a bank I am getting brought in either by a private Equity Firm or an investor or an investor or the company itself... when the company says you know we're in some trouble Paul they know what their trouble is and it's not a bank saying we don't know what's going on”
F4 (cycling between relative and absolute references) is a time-saving Excel keyboard shortcut that eliminates the need to manually type dollar signs.
“I might just say F4 so cycling between uh relative and absolute and mixed references instead of having to you know put my mouse cursor and type in a dollar sign uh just quick and easy”
Seidman does not recommend using external workbook links in financial models, preferring data consolidation within a single model file to avoid update and maintenance complexity.
“external workbook links yes or no no”
Seidman does not advocate for formal modeling standards boards (like FAST or SMART) in his practice, preferring context-based decision-making over standardized rules.
“do you follow a formal Standards Board like fast or smart when building your models okay no”
Carl's first job at age 14 was bagging donuts in a basement with hot steam and lard at a local cider mill, which he did not enjoy, and the experience created a decades-long aversion to eating donuts that he eventually overcame.
“when I was 13 years old turning 14 my parents lived just down the street I mean walking distance from a Cider Mill... my very first job when I turned 14 my dad was like go get a job... I went there and they're like the only thing that we would ever hire you for is being a doughnut bagger so we would put you in the basement with like the sweltering hot Steam and lard and I mean it was it was not the most enjoyable experience”
INDEX/XMATCH is Carl's preferred lookup function combination, replacing VLOOKUP and HLOOKUP for greater flexibility.
“what is your lookup function of choice index xmatch”
Seidman offers multiple training and learning programs in financial and business modeling, fractional CFO services, and advisory services to help companies advance through business chapters; he actively shares modeling content on LinkedIn.
“I do a lot of different training development learning experiences I have more than a dozen different learning experiences across financial and business modeling one actually starting tomorrow fpna cash flow modeling Excel uh fractional CFO services and then I also work with companies on a advisory basis helping them get to the next level of their their chapter of their business”
AI will eventually build financial models in the future, though the timeframe is uncertain.
“will AI build the models for us in the future one day yes”