Transcript of the conversation with Carrie Augenstein Fractional CFO to CPG Business
Sammy Basu
Our guest today is Carrie Augustine. And she’s a fractional CFO. And she’s super accomplished. So we’re very happy to have her as our guest and learn all about her exciting world. Thanks, Danny. Thank you. Thank you for having me. Yeah. So Carrie, how’s your day going? Oh, what do you do? What are you working on today?
Carrie Augenstein
My day is going great. Today or in general, these days, we’re wrapping up year-end. So working on audits, finalizing schedules for tax accountants, and looking at the year in reflection. Now that we have the finalized year and numbers, a lot of times you just take a pause, see how to see the performance, see how it compares to prior years. So I’m working with my clients on those activities.
Sammy Basu
Wow. So it’s a busy day.
Carrie Augenstein
They’re busy times, but they’re fun times. Because you really can you know, that’s when you can make strategic decisions for the future? Mm
Sammy Basu
hmm. Wow. Like, can you give an example of a strategic decision?
Carrie Augenstein
Sure, it might be, that you see the performance of different business lines and what’s more profitable, then some are more profitable, or some products are becoming more profitable than others. And you analyze why that is the case. And it could be for a variety of reasons. And then you might try to either drawback on some of the less performing lines of business or products and accelerate on the higher performing ones. Or you might want to try to mirror some of the successes that you’re having on your Higher Performers and transition those to the lower performers as possible.
Sammy Basu
Oh, so there’s a lot of analysis that happens after the tax season, I would assume, right? Yeah,
Carrie Augenstein
I think there’s analysis happening all the time you know, data it has the CFO role has really in an accounting and finance role has incorporated the importance of data, you know, especially as our systems have gotten more sophisticated.
Sammy Basu
Wow. Yeah. So, were you always a CFO? Or like, how did you get introduced into your corporate world? What was your first job?
Carrie Augenstein
Yeah, so it’s interesting. I was, when I started working on us about 1415 years old, I worked for guest jeans and the times of Claudia Schiffer, and Nicole Smith when they were huge. And I helped them open stores in Los Angeles. And I was a salesperson, so learning about customer service and merchandising, product development. And I worked for them all through high school and my first couple years of college, so for quite some time. And when I decided to pick a major, I was like, the only part of a business or the only part of that world I felt I didn’t know as accounting finance. So I decided to major in accounting and finance. And when you start on that trajectory, you know, you’re encouraged to get your CPA license, which I did, and then the big firms come and recruit at the universities. And so, at the time, I’ve Coopers and Lybrand before it merged, recruited me into their firm, and then I interned for them. And then they merged with Price Waterhouse. And when I decided I didn’t like public accounting, I merged my experience, guess with my accounting finance background. I reached out to the CFO at the time at BCBG and asked if they had a role for me. And they created a retail controller role for me. And so I got to incorporate both aspects of my background. And then it’s just kind of been going since then working with different premium brands. Being a controller for a long time, I had a fractional practice before, fractional was a coined term back in 2010, to 2018. Then I went back in-house, became a CFO, and then decided to open up my fractional practice again.
Sammy Basu
Wow, that’s awesome. Were you a good look seems like you’re a good student, you had a smooth life, you know, you’re a high achiever, from the early days,
Carrie Augenstein
you know, it’s interesting, I didn’t even care about school. And so I never really was a high performer. And when I got to college, I was like, Well, I know I can’t be I just have never really focused on it or made it a priority. And so I did, and I think it paid off in a long time in the long run, but until college, I was not that invested.
Sammy Basu
Where do you go to college? Like, how was college life for you? Good.
Carrie Augenstein
I started at San Diego State. They have a great business program there. But it was really hard to balance, Scholastic with the social aspects. And so again, thankfully, I did well. And I was able to transfer to UC Santa Barbara, which also has a great business economics program. And they have an emphasis on accounting. And my sister was going to grad school there at the time. So I lived with her downtown, so it was really kind of more mellow my last two years of college. Wow,
Sammy Basu
that’s awesome. Going to college in Santa Barbara and San Diego. By the way, yes. That’s true. So it’s okay, you’ve had so many different jobs, right? And you like you mentioned, your experience, that gap helped you with your next job, like guest jeans. So like, what is a commonality that you’ve picked up through all these different experiences, you could also talk about mistakes that you’ve made and learn from them, you know? Oh, yeah,
Carrie Augenstein
I mean, I think the, one of the commonalities is that, you know, processes and procedures are always important to have in place, and protecting the integrity of the data. So your results are accurate, right is super important. And, and also just the fact that you work with people, right, and, and you want to create positive environments for your teams. So people enjoy coming to work, bring their best selves, and feel valued. And I think that that has been a huge priority and passion of mine to build a positive team environment. As an early lesson, I have learned a few lessons along the way. And an early lesson was, don’t ever compromise your values for a job. So if you’re put in a position where you’re gonna have to compromise who you are, as a person, no job is worth that. And so you will find the right fit for you. And don’t be afraid to say no to something that you’re not comfortable with. And I was fortunate enough to learn that in the early stages. And then in the later stages, what I’ve been, what I’ve learned and been applying is really like, so when I’m looking at reports and data, and sometimes it’s a report that’s existed for decades at a company and I see something that’s a little off, and it’s just like this little pain you get and you have to it’s a muscle you have to build to listen to it. Nine out of 10 times there’s something wrong, something deep that maybe it’s a calculation, maybe it’s the data is not, you know, getting entered correctly. And one out of 10 times it’s maybe an insight that I need to learn more about the business. But there’s often at the beginning when that started happening there were times where you’re, you know, you have deadlines and you’re in a hurry. So you just rely on it If you hear something, but you just kind of keep going, and then it always comes back. And I just have worked in the past maybe 510 years to listen to when you and take a pause when you hear that, because it’s there’s going to be something good underneath.
Sammy Basu
It seems to me that a CFO is a very powerful and influential person in an organization. And sometimes you have to make ethical decisions as well. I don’t know, I’m just speculating. But like, yeah, how does that CFO fit into the whole organization structure?
Carrie Augenstein
That’s a good question because it’s interesting to see and follow. Or even as I get to your VPS, VDP, and financial control, and you’re the highest level accounting person at an organization, I’ve always felt to do, the best job I could do is you have to look at the business holistically, you can’t just be in your little finance and accounting bubble in the corner. It’s, you know, oftentimes you’re relying on salespeople to enter in sales data, or you’re, you’re relying on the customer service department to enter in data and you’re relying on that data to make informed decisions. And so it’s important to, I think, reach out, build relationships with all departments, see how their processes are, see how it’s affecting the end financial statements, and impacting that. And then plus, you get great insight on their challenges. And you might learn something about the business that where they’re getting frustrated, because, you know, there’s an inefficiency, and you can help facilitate, you know, to create and implement a more efficient process. And I don’t know what feels good when you’re helping others just like being happier at work and making their jobs a little easier for them.
Sammy Basu
That’s awesome. Yeah, I can picture you as scary as the friendly CFO.
Carrie Augenstein
I try to be I again, I think just like having a positive work environment, and culture is really important. And being approachable. And everybody observes different things. And I think you have to stay open to being and be receptive to everybody’s insights and observations. And you can’t be everywhere all the time. So hopefully, we can learn something from everybody.
Sammy Basu
You have like, and I have two questions. One is like, how do you deal with somebody whose work style may not match with you maybe just the polar opposite of field? And then the other question is, how, what’s the CEO? Who does have CFO report to and how does that conversation go?
Carrie Augenstein
Right? So you know, I think it’s, there’s different ways of not matching with my style, right? I think that you can be, I mean, everybody has different personalities. So I think it’s just, you know, being using your relationship and people skills to acclimate or to get along or to, like I said, again, stay open to another person’s process, because it might be different from yours. But that doesn’t mean it doesn’t get to the same result or something as long as it’s not like not hurtful or harmful, and also not creating huge inefficiencies or creating an environment. That’s not the best practice environment where, you know, it’s not healthy for people to create their spreadsheets that nobody else knows how to do, and things of that nature, you tried to create environments where if God forbid, something happened to somebody, and they couldn’t come to work, we could bring in somebody else, and they would be able to acclimate pretty quickly because we are putting in processes and procedures that are supported by the systems, you know, the software systems we have in place and, and our best practices that are practice throughout the industry. Right.
Sammy Basu
Sorry, my refrigerator just started loudly.
I understand. And then the second question, Who do I report to usually I report to the founder.
Okay. Under the founder, like, they’re all the same. Are they telling the same story like,
Carrie Augenstein
oh, no, I mean, I think like I said, people are people and everybody has different personalities. I think it’s super important to understand who you’re reporting to, what their objectives are, what their priorities are because then you can deliver, you know, what they what they need. But no, they don’t they’re not all the same. They’re all very different than fact, but I’ve worked for some amazing founders and then it can be very inspirational.
Sammy Basu
Wow. Could you share a success story?
Carrie Augenstein
of a founder success story?
Sammy Basu
Yeah, success story seems like you have plenty.
Carrie Augenstein
Yeah, I’m gonna share, I’ll share a success story. It’s not about a founder. But I think it’s a great story. And there were a lot of lessons in that in the story. So when I was working for one of the companies, they had a wholesale and a retail business. And the corporate office was mostly focused on the wholesale business because their financing was dependent on the wholesale business. And that was just where their bigger branding was occurring. However, the retail business had a fairly large presence. And, you know, they had their own sales objectives and their own sales goals. And when they would do their buying at the, you know, before a season, they would order, you know, for production, their inventory to meet their sales objectives. And what kept happening was that the wholesale division kept taking their inventory to meet their sales objectives, or they had a sales opportunity. And so they would, without consulting with the retail division, take the inventory. And then the retail division didn’t have inventory to fill the stores properly. And so what I did was create a separate warehouse, physical warehouse, so they had a really big warehouse that was able to find a separate room in their warehouse, where we could physically separate our inventory from theirs. And we also implemented a new warehouse software system, so they didn’t even have visibility of our inventory anymore, once we received it from them. So like, we went, once we received the inventory, we would buy it from the wholesale division after that they could not have access to it either physically or through the software. So that was a great solution to that problem.
Sammy Basu
Very smart. Yeah, diplomatic yet what? Yeah. Do you mind sharing something about like, your other part of you, like, you know, the other things that you do outside of work?
Carrie Augenstein
Yeah, um, I don’t mind, I’m a mother of two, I have a freshman at Berkeley, and a 10th grader. Um, and so they keep me you know, focused and grounded, and current, busy. And then, um, you know, I have great friends, my whole family lives here. Still, I have a very small family. But they all live here. My sister lives here with her family, my parents are still here. And so I do spend time with them. And I have great friends who I’m very fortunate to have. And I have a morning routine that I’m committed to that. So I usually start my day with my morning routine, go transition into work. And then if my daughter is with me, I, you know, try to be present for her when she comes home from school. And, and if she’s not usually very mellow in the afternoons towards the end of the day, you know, it’s usually a long day, and I’m pretty tired. So I try to just recharge for the next day. But I love I just bought a new Hydro. So I’m really, I don’t know what you if you know what that is. It’s a rowing machine. So I’m enjoying learning how to row and it’s a cool community of people. And I think it’s kind of like a peloton. environment. You know, well, cultish. But
Sammy Basu
it’s fun. Awesome. That’s great. Do you also work with charities and others? Yeah,
Carrie Augenstein
yeah. So usually, it’s a passion of mine. So I usually have one nonprofit, at least in my portfolio. Currently, I have one called Hope for Ukraine which’s doing amazing, amazing work for, you know, the families in Ukraine. We have a lot of operations on the ground in Ukraine. For the children. They’re providing, you know, Christmas activities, summer camp activities, tutoring for them. We have refugees here in America that we’re supporting. We have some medical support that we’re offering patients with fly them here for the proper medical attention that they need. And it’s a huge passion of mine, my grandparents were Holocaust survivors. So when the war broke out in Ukraine, it reminded me of their experience and was close to my heart. And then I was able to get this opportunity to be a part of this organization. So I’m a fractional CFO for them as well.
Sammy Basu
What does the fractional CFO do for a charity organization like that, so
Carrie Augenstein
the same thing it would do for a for-profit. I mean, once you hit a certain donation amount, you have to You’re required to get audited. So we had to set up processes and procedures to ensure that they could have a successful audit every year. And just helping them with donation strategy, I have worked at numerous nonprofits. And in the past, the Painted Turtle, which is part of Paul Newman’s hole-in-the-wall camps, I’ve worked at, I’ve had the Silver Lake Jewish Community Center be a client of mine. So I have had nonprofit exposure in the past that I was able to, I’m able to bring to the table and as part of a networking group providers that we’re both a part of, I’m part of the nonprofit affinity group too. So I can stay connected to what’s happening in the nonprofit world through that channel.
Sammy Basu
You know, just so you know, I also run a nonprofit business, not, I did not know that. It’s not intentional. It’s just not making any profit. So it’s become a nonprofit.
Carrie Augenstein
That’s a little different. Okay.
Sammy Basu
Do you have any personal or business cyber security concerns?
Carrie Augenstein
You know, she’s getting crazy out there, right, they’re getting more and more sophisticated. I just had an experience a couple, like a week or so ago, where I received an email requesting a wire transfer from what looked completely real, I’m sure that someone hacked an email, a previous email, and copied and pasted it. And I looked completely legitimate, I’m pretty good at like thinking Something’s fishy, and I’ll email like, our IT department, or what have you, at my client to confirm, I’m always trying to be a little bit, say, you know, on the conservative side, but it was fraudulent. And so as a result, from that experience, we implemented like, for every wire, or electronic transfer, that request that we receive via email we have to always verbally confirm to, and I sometimes even get a text on my phone with some people that are pretending to be people I’m associated with business-wise, like maybe, you know, maybe one of the founders or, or what have you, and they’ll make up some excuse about why they’re not texting from their normal phone, and always have to text Well, now I usually know. So I don’t, but it was pretty scary. And jarring the first time it happened. And so, you know, just really being on alert and like, you can just never be too cautious. And I ended up talking to our bank. And they you know, and they gave some really good tips about just internal control procedures we could put in place, you know, just taking that extra step, it’s so hard, because, again, everybody’s in a hurry, we have all have a lot of work to do. But those things are really hard to rewind, you know, if you go down that path, so it’s just really scary, just how sophisticated they’re
Sammy Basu
getting. Yeah, we see that a lot in our work tool where a vendor’s email system gets hacked. And so they’re communicating, the client doesn’t know that it’s a hacker that’s communicating. So
Carrie Augenstein
right to change the payment of the ACH information or something of that nature.
Sammy Basu
They, yeah, but they, you know, the way these people operate, and sometimes we run those exercises for our clients, it’s like, it’s called pretexting. So we build a trust. We have conversations for, you know, that’s what hackers do, like, a month, two months. Yeah. Slowly, then they’ll say, oh, by the way, slight change by that time, you already know, like that person. Right?
Carrie Augenstein
So it’s figuring out ways to objective like confirm that, that request and you know, with objectivity So, yeah, so it’s yeah, it’s scary.
Sammy Basu
Yeah. Also, like if it’s because of our vendors, or security labs, we should have contracts in place, that they are responsible for their security, and if we happen to make payments like we deserve Your situations were for sale and the vendor said, you paid the wrong person. Pay me again. So then the client loses money twice. So having those contracts in place is useful.
Carrie Augenstein
Right? Sometimes that can be tricky. I mean, insurance. I mean, as you know, I’m sure cybersecurity insurance has become, you know, I think the first time I heard about it was maybe 10 years ago. Right. And, and it was like, they had to convince you. But now it’s like, you gotta have you know, that it’s part of it kind of doing business. So it’s developed over the past, you know, 10 years. Yeah,
Sammy Basu
a lot of claims are getting denied, though. Almost 25. Things are getting denied, because it’s like people are checking the checkbox, but they’re not having those controls in place sometimes.
Carrie Augenstein
So important. Yeah. Important. Yeah.
Sammy Basu
Cool. Thank you carry any.
Carrie Augenstein
Thank you. Thanks for having me. It’s good to see you. Good
Sammy Basu
to see you. Okay, and keep up the great work. The world’s better. All right.
Carrie Augenstein
I’ll take care. I’ll talk to you soon. Okay, bye-bye. Bye.