Financial Modeling Insights with FMI’s Ian Schnoor

Many years ago, my first accounting professor stated that accounting was the language of business. As a young student, who was I to disagree? About seven years later after working on several M&A projects, I formed my own opinion about the language of business. The financial model is the language of business. And there is no one better to articulate this idea than Ian Schnoor of the Financial Modeling Institute.

Who Is Ian Schnoor?

• Co-founder and Executive Director at the Financial Modeling Institute
• President and Founder of The Marquee Group

I was introduced to Ian by someone on his team, and I’m so glad they did. Ian is the type of person any financial professional would want to hang with. Ian is articulate, engaging, and obviously loves what he is doing. My favorite trait? He’s humble and loves learning. That came out so clearly in our conversation.

Interview Highlights

• Where are the pratical books on financial modeling?
• Financial modeling is a multi-disciplinary skill
• The best way to learn how all the dots are connected in a business – a financial model
• Business modeling vs. financial modeling
• Ian’s fascinating origin story with financial modeling
• What does the Marquee Group do?
• The work at FMI
• Tools, methodology, and people skills
• Timeframes (periodicity), and LOD (level of detail)
• The integration of actuals (rolling the model) and the biggest headache for financial modelers

More detail creates the illusion of more accuracy in a financial model.

Ian Schnoor

Five Financial Modeling Questions to Ponder

After listening to Ian Schnoor on financial modeling, here are five questions that range from easy to difficult to answer:

1. Regardless of your position, could you building a financial model of your business in less than two hours (with the focus on function over form)?
2. Ian says that 50% of the time should be spent on the spreadsheet when financial modeling. Where is the other 50% used?
3. Ian describes financial modeling as a multi-disciplinary skill. What does he mean by that?
4. I prefer the term business modeling over financial modeling. In your own words, how would you describe these terms?
5. What is the difference between component thinking and systems thinking with respect to financial modeling?

Books Mentioned by Ian Schnoor

• Financial Modeling by Simon Benninga
• Sapiens by Harari and Perkins
• The Power of Gold by Bernstein and Volcker
• The Robert Caro series on LBJ
• Master of the Senate, also by Caro (and officially on my to-read list)

Pondering My Next Questions for Ian Schnoor

Our conversation flew by way too fast. Accordingly, this will not be the last time we visit with Ian. Some of my round-two questions will revolve around these three topics:

1. Financial modeling and the twelve leadership principles of Beyond Budgeting
2. The financial model fit and/or alignment with the company’s strategy (I’ll be using Roger Martin’s description of strategy)
3. The role and possibilites of AI in financial modeling

The Producer’s Pick

If you liked our discussion with Ian Schnoor, here’s our next pick if you are looking for another discussion on financial modeling: