There may be errors in spelling, grammar, and accuracy in this machine-generated transcript.

Isaac Heller: Hey, everyone, this is Isaac. I'm CEO at Trillian. And today on AI, accounting, intelligence. We'll be talking with real people about real things related to AI and the impact on the accounting industry. Stay tuned.

Isaac Heller: I'm excited to be here with Ronan Fayer, most recently CFO and interim CEO at Solaredge, [00:00:30] one of the biggest and most successful public companies in Israel and the world, and now board member on top companies like Monday and Kaltura and Cato. Welcome. Thank you very much.

Ronen Faier: And happy to be here. Thank you for inviting me. Awesome.

Isaac Heller: So we'll get into a lot of fun stuff about CFO and accounting, and I am sure. But like, I don't know where we're sitting in Tel Aviv in this in this beautiful city and country and world, you know. Did you grow up near here? Where'd you where'd you grow up in? In Israel.

Ronen Faier: So I'm. I'm originally born [00:01:00] and raised here in Israel. Um was born in Netanya, which is a relatively small city, uh, here in Israel. But, um, very much understood when I started my thoughts about career that I would like to be a management member one day in a tech company, and when calculating what would be the best route to get there, I thought that, um, accounting and finance will be the right place. My whole family are actually related more to the medicine. My brother is a doctor. [00:01:30] My mother used to be a nurse, and and almost the natural course was to go and be a doctor. And when I started thinking, being a doctor, how much I need to invest, how much I need to, uh, studying in order to yield the success and how long it's going to take. And when I understood, first of all, by doing the calculation that I don't want to be a doctor, I said, okay, but the way that I'm analyzing things means that risks, returns, investment. Maybe I should go towards finance. So I studied finance in Jerusalem University in [00:02:00] Mount Scopus. Then um started as a of course, doing internship as a CPA, started in a tech company, then MBA in Tel Aviv University. And from there I was very fortunate to work in amazing companies here in Israel. That allowed me to really grow and express my capabilities. And I must humbly say that, you know, I was able to study from the best entrepreneurs that I think that this country have seen from Dov Moran, uh, the guy [00:02:30] who invented the USB flash drive all the way to Guy Sella, who founded the Solaredge. So I was fortunate. And I'll see I'll see where the continuation of this journey will take me.

Isaac Heller: That's awesome. I'm sure. I'm sure. Someplace really, really fun. So you grew up in Netanya? Yes, which is a beach town, right? It's a beach.

Ronen Faier: Town. Yeah.

Isaac Heller: So it's funny when you when you see someone who's who's become an accomplished CFO, CEO over the years, there's always like something about their childhood that they bring into that. I remember reading, [00:03:00] um, you know, about another entrepreneur who grew up on a kibbutz, and he always talked about his kibbutz work ethic, his community work ethic as going into the the company. I also met another guy who grew up on a kibbutz, and he never wore shoes. So there's all kinds of things that that influence you. But like if you think about that, that childhood in Netanya and Israel, what is that one thing that, like you bring forward as a CFO, you know, a decade or two later?

Ronen Faier: So I think it's, um, [00:03:30] Netanya was a rough city to, to grow in, you know, first of all, reputation in Israel and also not so good for this, uh.

Isaac Heller: A lot of immigrants. Right. It's fair to say, or.

Ronen Faier: Yeah, a lot of a lot of immigrants. It was a city with a relatively poor background in general. But the one thing that it gave you is that you understood that in order to get out of Netanya, to become, to become a something that is more than just being in your own city. You need to do everything much better than the others. And I must say [00:04:00] that would I at least took from from Netanya, which is, by the way, a beautiful and amazing city by itself. But I think that the thing that I took was that challenges must be accepted and challenges must be set up continuously over your career. And whenever you are reaching one point in your career, you climb the peak. You need to look for the next peak because the challenges never stopped. And one of the things that at least characterized my journey was the fact that it was always [00:04:30] challenging companies, challenging industries, even, by the way, challenging CFO environments. You know, working in a company that has inventory, that has international, uh, presence, a company that has presence in a very competitive landscape, very kind of boom bust. You know, I was in memory, uh, you know, Semiconductor is a boom bust. Solar is the mother of all boom bust, uh, industries. This understanding that [00:05:00] you need to face a challenge every day and you need to accomplish something. Something that makes you a little bit tougher, a little bit more ready for this challenge. And you understand that whatever happens, you need to continue and fight. So I think that this rough neighborhood, the rough natanya rough idea that you need to go out of it, makes you a little bit more ambitious in where you want to get.

Isaac Heller: So it's interesting. Maybe we'll get we'll get big picture because, you know, you talk about a [00:05:30] challenging environment as a huge benefit, you know, and like a, like a tough working class melting pot of an environment, I'm sure you know, you know, you had your you had your bike stolen and you were all bummed out and you walked out and someone pickpocketed the last shekel off. It was just there was always a challenge. And, you know, we think about, you know, our kids or the youth or whatever, at least in Israel. I grew up in America, in Texas. Things only got better. [00:06:00] Yeah. Okay. My my friends homes are a little bit nicer than their parents homes. Right. And it seems like there's less and less kind of challenging environments out there. So will these great, you know, entrepreneurial hotbeds like America and Israel and Europe as the generation comes up and there's less challenges, is it going to be that much harder for new and strong CFOs and companies to emerge? Do you think it goes to new [00:06:30] countries where there's the next Netanya or whatever? Do we have to reinvent ourselves? Just kind of this idea because we we all want to be Ronan or an entrepreneur or whatever. But, um, we were we were born with a little less challenges in front of us nowadays.

Ronen Faier: So I would, you know, also as a father for for three kids, you know. From a teenager to a 21 something, uh, girl, I think their life is not less challenging than ours. I just think that it's a little bit of a different challenge. I think that, you know, and especially [00:07:00] for those, um, growing in Israel, you know, I was born in 71 where Israel was not yet the country it is today. It was not as developed, not as rich, not as, uh, by the way, in many senses, not as polarized as it was today. But in many senses, it was a country that was was developing. And I think that most of the hurdles were economic and sometimes just, you know, what, what standard of living you are. [00:07:30] I think that when I look at my kids today, in the generation today, I think that they face different challenges. I think that today technology is facing new challenges for them as well. Just, you know, I keep saying that when I look at my kids, they're working actually in social networks. How many posts did you do? How many videos? How many likes did you get? It's a job. I think that it's it's a little bit of a different environment. I'm not sure that the motivation will be economic, as it was for me, because I definitely [00:08:00] wanted to make sure that I leave my children in a better economic state than my parents left me with. But in general, I think that each generation gets their own challenges in a different way.

Ronen Faier: I think that at the end of the day, it is the personality of the of, of, of the human being, of the person that drives them. And I think that maybe they will face different challenges and they will face the challenges in a different way than we did. But I don't think that today you see [00:08:30] less of a challenging environment. I would say one thing, though, that one of the changes in, in, in, I would say the type of the challenges is that in many cases, I think that our generation with a little bit of harder studies and harder work, you had the relatively better playing field, a play field that you could actually grow. I think that today the field is becoming much and much more, even to everyone. So it is becoming [00:09:00] sometimes more challenging to be better or sometimes more challenging to be, uh, um, to be able to, to take advantage of some of the terrain that you see in front of you. Because today technology gives almost most people the same capabilities or the same opportunities. I think that education, educational systems being better or worse, uh, provide a different level. But I think that is a little bit more, uh, straightforward for people. And, and I think that [00:09:30] in general, it's simply that the challenges are different. They are not less. So I wouldn't expect to see less entrepreneurs in Israel, in the United States, or anywhere else. I think that it's just going to be a little bit of a different ride for them.

Isaac Heller: That's awesome. And I mean, that's inspiring because, you know, like this, you know, this discussion, we call it accounting intelligence. You know, it's a play on word with AI. And a lot of the people we talk to or who listen to us, they're either CPAs, they're [00:10:00] thinking about being CPAs, they're thinking about being an accountant. Now, when I when I was coming out of college, let's say 20 years ago, being at the Big Four was very prestigious. Being at PwC and Deloitte and all these companies and being a CPA, it's like being a doctor. You're a lawyer, you're an accountant and stuff like that. I think it's different now. I think globally we're feeling it and then you have this like, I don't know, it's insane how much literature there is about AI right now. But you can't you can't walk five feet [00:10:30] without hearing something about AI. And so there is a bit of this, like anxiety. Like, is it going to be harder? Am I going to should I, should I go all in on technology? Should I stick with the account? I mean, I want to unpack that a little bit, but first of all, are you a are you a CPA or do you have a CPA?

Ronen Faier: I am, I'm okay since 99.

Isaac Heller: Okay. I bet there's there's a lot of people that want to be a CPA, and they want to be a CFO and a future board member, so that's awesome. So maybe before we get into the challenges of the next generation of accountant accounting accountants, you [00:11:00] did it from CPA, accountant to CFO. What are the, you know, what's how do you go from CPA accountant to CFO? And that's a big question, but what are some of the key inflection points?

Ronen Faier: So I think that, um, first of all, I consider the CPA license as almost basic education. Um, because I knew from the very beginning that I don't want to be an audit partner in a Big Four. I'm not saying that it's not a good profession. I didn't I didn't want to do it in any [00:11:30] case, but I think that I needed to do it in order to be able to run a company and to run a finance department in a company. Because when you are facing the auditors. When you're facing the Big Four, when you are facing the legislation, you need to have two things. First of all, the state of mind of what is accounting? What is it? What does it mean to run an accounting department in a company with all of the requirements around it? You need to be a CPA in order to understand how your CPA will look at you and will audit you. So this was the first thing that that [00:12:00] I thought. And the second thing was that CPA license allows you really to go through a very I would call it deep understanding of how the business is reflected eventually in the financials. And one of the things that I was always, um, attracted, I would say in business is how do you make sure? And especially, by the way, when you're a publicly traded company, how do you make sure that your business is well reflected in accounting? Because accounting principles, especially over the [00:12:30] last few years, has become more and more economic in nature. You find more and more accounting principles and accounting, I would call it practices that are making. First of all, financial statements almost impossible to read, even for CPAs. By the way, in order to understand where the business is and what sorry.

Isaac Heller: What what do you mean by that? So it's not reflected because of GAAP versus non GAAP.

Ronen Faier: It becomes much more complex and much more economic by nature. For example, there is a gap rule that that says how do you need to reflect. Uh [00:13:00] um uh, the fact that if you have a long term, uh, office, uh, license, uh, leasing, how do you need to reflect that in the books? And basically, by the way, even though.

Isaac Heller: You know, we're not you know, we do a lot of that, right? Of course. Okay.

Ronen Faier: You know, but that's that's why also.

Isaac Heller: Asc 42, IFRS 16 putting leases on the balance sheet. Exactly.

Ronen Faier: Change the past year. You know, if you read the financials of a company right now, a tech company that just leases an office for 15 years, you'll see that they have a huge asset on their [00:13:30] balance sheet. It's not their asset actually. Yeah. And they have a very big financial liability or loan. It's not really a loan. It's simply right of use. And within this kind of environment where gap becomes much more economic in a sense, because you can say that yes, if you're sitting in an office for 15 years, you have a right of use. And this right of use have has a value on the day to day business. If you just read the financials, you don't understand what it means to the to the business. You [00:14:00] know, in some cases, you know, in Solaredge we give a 25 years warranty and we give, by the way, 25 years as part of the product of access to to to data. And, you know, you need to defer revenues and you need to treat some of the revenues that you received as if it was a loan. And there is interest income that comes instead of revenues. It's complex. And eventually one of the things that I always wanted, and this is why it was so important for me to understand the gap, to say, okay, this is gap. This [00:14:30] is how Legislation. The regulator would like you to reflect things, but you need to be able to explain your investors eventually. What is the business? What is the essence of the business? And for me, studying CPA was simply a mean to make sure that I know, I know how to translate between the financials, my investors, my management, my shareholders, how to translate and how to mitigate and make sure that they understand what's [00:15:00] happening.

Ronen Faier: So the first thing was, you need to be a CPA in order to be a good CFO. Later, once you become a CFO, sometimes you know it's luck, sometimes it's your personality, sometimes it's the company that you're growing and it's its abilities. I'm not sure that I have a recipe of how to become a CFO from being an accountant or assistant controller, but I would say that the journey that you're making, I think, and if I would need to give an advice one day to the soon to [00:15:30] be CFO or aspiring to be a CFO. Is that be a manager in your company that wears the finance hat. But first of all, you are a manager in this company. A CFO is a part of the management team. He needs to drive the business. He's not just recording, you know the results. He's part of the business itself. You must be a manager that is involved in everything other than finance, by the way, and take responsibility on finance and the ability [00:16:00] to grow there. In my view, at least for me, was always that I was able, as a assistant controller, controller, Director of finance, VP finance and then a CFO, able to bring much more value than just being the top accountant in the in the company. And when we'll talk about I, I think that this is a huge opportunity actually to grow as a financial. I would call it finance executive because it takes away a lot of this tedious gray work that sometimes you need to do simply [00:16:30] because, yes, you're still in charge of finance. So that was the route.

Isaac Heller: It's very interesting. And I it kind of gives me reassurance if I'm someone who aspires to be an accountant or a CPA, you you can feel a little bit dejected right now because people are talking about they're uncertain about the future of a CPA, or there's this AI that some sort of macro job killer or whatever it is. But I think to your point, the CPA gives you the the core to [00:17:00] begin with, right? Accounting. But that doesn't mean you're an accountant for 30 years. It means that you have the core. Just make sure you don't stay in the spreadsheet too long, or stay and look around you and look at the business and look at your client. And gap is gap. But there's much more outside of gap. So so it's the idea is, is no jump right in because you need a core language. Uh, there's a reason Accounting has lasted for decades and will take us for centuries. [00:17:30] It's the language of business, and it's an important foundation. But that doesn't mean it's it's the end, all right. You eventually grow into your who you become.

Ronen Faier: Agree with it. And yeah. And I would say one more thing. And again, maybe it's not true. It's not true for those who will become an auditors because it's a little bit of a different profession, by the way. But at least one of the things that really is, and I felt it as a CFO in all of the jobs that I had, is the fact that, you know, when you're [00:18:00] a chief operating operational officer, life is relatively simple in the sense that, you know, you know what you have to do. You know that everything you do is for the business, and you know that everything that you do is related to your obligation. I don't know, to make more products or to make sure that everything clicks when you're a CFO. It's a unique position within management where you are the Sentative of a world that usually the CEO, the CEO, the CRO do not know, [00:18:30] they do not care about it. They CRO would usually like care about revenues. He would not care about. How does the structure of the deal is actually impacting revenues, and whether a decision that he makes that is short term may impact the company on the longer term.

Ronen Faier: He may not may not understand what is the implication of, by the way, making mistakes in revenues or something like this. And when you're a CFO, you come to the company [00:19:00] being, first of all, the frontline of, I would call it managing risks for the company. Most people when they run a company, they don't think about the risks, they think about the opportunity. They can grow revenues. We can grow the business. They don't think about the risks that can happen. Even if you're growing. And as a CFO, you come and on one hand, you're part of this team that needs to take the company into the success, to growth to increase, and at the same time, to make [00:19:30] sure that you manage the risks. There is no better way to understand what the risks are and to manage them without having the CPA knowledge. Because this training, which is, by the way, it's it's it's awfully tough. You know, it's very hard studies in university, as I remember everyone in university, you know, celebrating going to parties when while we're, you know, studying like crazy for exams and everything.

Isaac Heller: And you got to do the CPA.

Ronen Faier: Yeah. Two years of internship and the bar exams are so [00:20:00] awful and say, why do I need it? Because it forges it forges in in in your capabilities and in your mindset. What should be the mindset of the person who's in charge of the risks and when you are becoming again, finance executive? It is not just the opportunity. You're the one who's being paid, who's being accounted for as the one who needs to make sure that everyone is kept safe. So [00:20:30] I would say, as tough as it is, don't give up the CPA license. Don't give up the CPA degree, because I truly believe that it gives you a very powerful tool that makes you, by the way, a very strong within your own management and within your own company, because you have it's almost a superpower that you have where the others don't don't have it. Yeah.

Isaac Heller: And it's also interesting you mentioned the word risk a few times. So so first of all, if I'm thinking about going [00:21:00] to be a CPA or an accountant, that just inspired me, right. Like and and I think it's meaningful. And what I've learned, you know, as an entrepreneur the past I guess few years is when you jump into Startup Nation or, you know, I was living in New York, huge startup scene, San Francisco, Silicon Valley, wherever you are, if you're living in the startup world, it's not. It's a risk taking world, okay? Everyone's taking risks. We're talking about you look at a company, they [00:21:30] have 20, 30, 100 people, or they just announced a $30 million round. They don't even have $30 in revenue. Right. And so when you're, you know, graduating college and people are going to startups or you're an entrepreneur and people are raising money, I think what you what you realize is nobody's thinking about risk. And so a little bit of the importance of the accountant or the CFO goes away because they're the risk officer right now, actually. And we've scaled, you know, seed round A, round [00:22:00] B round passing $10 million in revenue. And all of a sudden everything you're saying is like touching my heart. Roman. Right. Like, no offense, but if you would have said it three years ago, I would have been like, well, I want the CRO, I just want the growth or whatever it is.

Isaac Heller: But now it's funny, as the CEO, like the CFO and the CEO becomes so much more aligned on these things. And so I think, I think as an accountant, like to get to be as more closely aligned with the overall business versus chros [00:22:30] here. Cmos here, I think is a is a really exciting proposition. I felt it a lot just over the years, going from early stage startup to no real company, real risk. I want I want to be aligned with the CFO. But I have a more challenging thought because, um, one thing I've, I've learned is the the accountant, the chief accountant or the chief financial officer. To your point, they do have to challenge the different people at the table. The revenue officer [00:23:00] just wants revenue. The marketing just wants a marketing budget. And I'm sure challenging that. What's like 1 or 2 things where you would challenge the CEO, a couple examples where you would walk in because because I'm, I'm like the CFO. I'm thinking about all this stuff. Top line, bottom line, everything. What are some typical things that a CEO comes in where the chief financial officer accountant says, stop where you are.

Ronen Faier: So it's uh, I think it's very much different between [00:23:30] comm, between companies, between CEOs, CFOs. And I'll try to give an example, but it's based on my experience and where I used to challenge. And I think it also comes back to, um, part of, you know, what you need to carry as a kind of your own truth. And I'll explain in a second. As I said before, I think that it's mostly around managing risks. By the way, it's not avoiding risks, right? Companies must [00:24:00] take risks in order to grow. Companies that don't take risks will not grow and will never succeed. But risk needs to be managed. And I think that what you usually see is that CEOs would take risks because they're in charge of the growth. And by the way, sometimes as entrepreneurs, they're more brave than I am, sometimes more fearless than more fearless than I am. And your job is to challenge them, by the way, even to light for them some [00:24:30] of the corners that they don't look at when it comes. So I'll give you a few examples that I use to, uh, um, to challenge Guy. Guy was the amazing, uh, founder of Solaredge, uh, a bold, uh, person, you know, very thorough thinker. But he was fearless, and I needed to challenge him on places where he thinks that we need to jump two miles.

Ronen Faier: And [00:25:00] I say whether it is a mile and a half, it was never. By the way, we don't need to jump. It was. How far do you need to jump? And how do we make sure that we do it? So I'll give you two examples. One for example, just imagine when you're a startup and you're fighting to raise capital. Inventory management is a very big thing because you take capital that you raised from VCs. It's a very expensive money, as you know, because you give share. It's not. You pay later. We couldn't get that. We couldn't get loans from banks. Yeah. And you basically take this money [00:25:30] and instead of investing it in R&D, you put it in hardware, in boxes. So I used to challenge when we decided on inventory levels and manufacturing levels. How do we have enough orders? Do we feel comfortable? Sometimes you don't make two orders. You make four. Forecast. Is our forecast process robust enough that you feel that we're not just spending money and maybe throwing inventory that we don't need. So that was one thing I can tell you. That was one [00:26:00] year, one of my biggest fights with Guy. Huge one, by the way.

Ronen Faier: Good fights. Because we got into the room, we screamed at each other and we went out hugging because, you know, this is the way that you need to work, but everything needs to be on the table. That was the year 2013. The solar business started to to to go down again. It's a boom bust. And it was a very much of a bust area where a lot of the subsidies in Germany disappeared. We need to sit on budget. Guy thinks that we need to grow the company and hire more people. [00:26:30] I'm the CFO. I think that we need to cut expenses. And we had a very, very intense, uh, budget discussion where everything was on the table. What are the odds? What are the risks? What are the opportunities? How do we make sure, by the way, that maybe we make a decision now, but if something changes, what is the mechanism that we have in order to make sure that something is working and we don't have an autopilot that, you know, throw us with spending too much money. I always used to challenge almost on everything [00:27:00] because, by the way, in over time it was my job to challenge it. Also because he knew that when he thinks of something, he needs someone to balance him.

Ronen Faier: So I would say challenge and challenge almost everything, but especially on areas that you think that maybe the thought process was not complete, maybe the the process of getting to the decision was not taking into account all of the elements. And sometimes, by the way, even if it's a bold move and a risky move, let's just make sure that we understand [00:27:30] what are what's on the stake that we're doing. So I, I used to sit with a guy on a weekly basis, almost 2 to 3 hours, and we used to challenge each other on everything. Um, but the good thing is, you know, when it comes. And this is why I said prior to this, you know, that you need to make sure that you come as a manager in your organization, not someone that is against the organization if it comes without an agenda, if it comes in a way that your CEO is a CFO, knows that you're cooperative, that you're working with the company [00:28:00] when it comes without any agenda, that that is just for the sake of reducing your stress, your risk that you take upon yourself. But because it is done from a very non-agenda bearing, uh, direction, it usually works. You're expected to challenge the CEO.

Isaac Heller: It's so interesting. And by the way, these these little anecdotes are fascinating. Okay. I can, you know, there's there's some accountants that are working at startups and they might hear inventory [00:28:30] and we don't have inventory. You know, we're software. But first of all, there's a there's a lot of other verticals out there, of course. And also, you know, I think a CFOs impact or an accountants impact is is really playing on the margins. Right. If I have 5% more or less inventory, how much more can I invest in R&D. Right. And it's not just about these binary decisions. It's about optimizing every aspect of the business ultimately to to create probably just more efficient, better [00:29:00] jobs, better people, better quality life, more revenue. It's it's all an equation. Um, it it really resonates with me, I'll tell you. Like from the CEO's chair. Right. So you mentioned, like, instead of going two miles, just go a mile and a half, um, make sure there's an agenda, make sure it's clear. Make sure you're coming from a place. Uh, just last night, I had a discussion with an investor, and that investor gave me an idea. A very important idea. This is for. Truly. Let's see if it comes out one day. [00:29:30]

Isaac Heller: But I loved the idea. Okay. And I was ready to walk in to the office today and implement that idea. And then I carpooled with someone this morning in the car, and I shared the idea. And this is a let's just say it's a former CFO, actually. And he gave me the opposite idea, the opposite idea. And I walked into the office holding on to that opposite idea. I'm a CEO, I'm an entrepreneur. You know, I'm [00:30:00] expected to to run this organization, and I am holding two opposing ideas that within 24 hours I was equally as enthusiastic about. Right. So the importance of a well-founded accounting finance background, a CFO with managerial skills. You mentioned truth, like a core truth, would be so valuable for me right now. Someone, a CFO, a financial partner who can hear those two amazing ideas. Because believe me, a lot of times without a CFO or without an accounting partner, [00:30:30] one of those ideas gets actioned. And it's the idea that happened to be the most valid at that moment. That is how CEOs and entrepreneurs often work. I'll admit my guilt. Um, but it's just it's just reassuring and kind of refreshing to hear that. I would.

Ronen Faier: Say one thing about.

Isaac Heller: This. Yeah.

Ronen Faier: It doesn't mean that you always get the best result or that you'll do the best. You'll adopt the best idea. It doesn't mean that that's the case, but I think that what it does make is that at least the process is a little bit better. I can tell you that I [00:31:00] was wrong many times in some of the ideas I had and, you know, in many cases where I took the more bearish, uh, position towards guy, that was always a bull. He in many cases was was right. Uh, while I was wrong in some of the cases. But I think that what really makes the CFO CEO connection work well is the ability to, first of all, never look at things as if it's I'm winning or I'm losing, but it's rather that we are getting [00:31:30] the right process. It's good to have, um, sometimes bad outcome out of a good process, because I think that if the process is good in 80%, you'll come out with a good result in 80%. So 20 results 2,020% is not a bad result, you know, to come up with, uh, if you do everything else. Uh, very good. So I think that it doesn't ensure that you will get to the best result, but at least you make sure that the process is right and it's important.

Isaac Heller: Yeah. Very [00:32:00] interesting. So, um, just a rapid fire question on that. Um, in the process, how much what percentage of the information do you feel you need to make the decision? You know, some people say I need 80%. I need 100%. Some people say 51. Give us a sense to make that decision and not keep going with the process.

Ronen Faier: So I'd say that around 70%. And by the way, and again, it's very hard to give a numeric result. But 70 [00:32:30] represents in my view two things. First of all is that you're always a little bit you're too far from 100% okay. Okay. So 95% is not good. It's too far because the pace of making decision is relatively quick. Yeah. And and again when we'll talk about, you know, the AI and its abilities I think that this is shortening the this gap between the 70% to 100 tremendously. Because sometimes a lot of the data is already there. It just takes a lot of time to get it. But [00:33:00] I think that you need to be at around 70%, because you need to make sure that you have enough substance that you can really judge what are the circumstances and have a good grasp of the potential results that you have there. But you need to understand that you will always be far from knowing everything and having everything. And if you expect to be at 100% knowledge of the data, you will never make a decision. Not making a decision is the worst decision to make. So I would say 70. [00:33:30]

Isaac Heller: It's interesting. It's good we got some numbers here and I think that's going to resonate because when you go into a career like accounting where you're a risk officer, risk officers do end up in no decisions. A lot of times, yes. Right. And so it's important that just to understand that a no decision is a risk too. Um, and we're going to get to Arnie in a second, but we're going to take a step up. So we started in Netanya. We got to CPA. Were you at the big four?

Ronen Faier: No no, no. Actually, it was a deliberate decision. Today it wouldn't work. But when I graduated, [00:34:00] I knew that I don't want to be a CPA, so I could still go to a small firm that was auditing Nasdaq traded companies. At that time, it was still acceptable. And um, and to go out quickly. And the funny thing was that, you know, internship in Israel is two years after two years and one day in internship, I started to work in a tech company. So I decided deliberately.

Isaac Heller: What was the firm called, or is it.

Ronen Faier: Uh, you know, it today doesn't exist. It was called Brueckner. Rosenthal.

Isaac Heller: Oh, there you go. [00:34:30] Okay. By the way, when you when you work at CPA firms that are not the big four, you just learn a lot of last names. You learn a lot of last names. I've never heard of that name. Yeah. Um, but it doesn't exist anymore.

Ronen Faier: An amazing school, by the way. Yeah.

Isaac Heller: Well, I'm a big proponent of of going to the small company that's a little bit messier than the big company and learning through that. So going to that firm Day. Year two, day one. Going to the tech company rising. You mentioned from assistant controller all the way to CFO. Let's just go one step up now to another. [00:35:00] I think dream of of financial officer. Accountant is getting to be a board member. Right. Um, you mentioned Kaltura, Cato Networks. Those are fast growing companies, Monday.com and Monday.com. And that's what I wanted to mention. Monday.com recently, I think publicly passed a billion in revenue. Um, that company was just started about a decade ago. Right. That's an incredible growth story. There's many like that in Israel and around the world. But just give us a sense, take us into the board room of maybe a little bit about [00:35:30] what you can and can't do as a board member in terms of influencing operations, how it changes from the beginning, where your day to day accountant and then CFO, you're a little bit over the business, and then at the board level, you're seeing them once a quarter, you know, maybe having monthly or weekly calls. What's it like as the as the board member and former CFO? Sure.

Ronen Faier: So I think it's, first of all, a little bit of a shift of, of your mind knowing that you're not managing the company. Mhm. Moving to the other side of the table is a is [00:36:00] a mental step that you need to take. Um and I think that it goes to, to, to the roles of the board. And I will explain in a second. On one hand of course again you don't do the day to day work. You will never know the details. And by the way, we CFOs, we finance people are usually very much detailed people we know how to drill down. We know how to get get into the detail details. It's harder to do it when you're a board member because you don't leave the day to day. Right. Of a company, you need to be prepared to the fact that sometimes your opinion will be heard [00:36:30] but not accepted. And this is something that you need to be able to live with. You're not managing the company once you've crossed this chasm, knowing that you're moving to the other side. It very much depends on the company and and your personality. I must say that me as a board member, first of all, I try as much as possible to bring value. It's a kind of a multifaceted job that you need to do. The first one, by the way, as a board member, you are representing the [00:37:00] shareholders of the company. So here actually, my role is to oversee what the company is doing and make sure that they do everything in the right way so that the financial processes are in place, that the reporting makes sense, that the work with the auditors is working, that that the the finance people, personnel size of the department really fits the mission and that the process of eventually reporting to the shareholders is right.

Ronen Faier: This oversight [00:37:30] is very important because this is my fiduciary obligation to the shareholders. And that means, by the way, that even if you're not sitting with a company and give advice to management, this is part of your obligation. So you need to make sure that you do it. How do you do it? In my view, is also merging with the other aspect. And this is really to be a sounding board to the management and help them. This is a board of directors. It's not just auditors or someone who's who's just overseeing everything. And here I [00:38:00] think that they merge because by making sure that the company is being run properly, where the processes are right, you help management. And here when I go to a board sitting in a board of a company, the first thing that I do is that I try to be much more in touch with the company, rather than coming once a quarter to the committees or to the company and just, you know, ask the question after receiving the materials. So I sit with the CFOs quite often. I try to [00:38:30] be, by the way, an ear for them when they need an advice, when they need to ask a question, when they need a sounding board because sometimes they do not have it. I'm trying to sit with executives that are not from finance, because I want to understand what's happening in sales, what's happening in R&D? By the way, when I on board on a board, I sit for 1 or 2 days with the technology people to understand the product.

Ronen Faier: I try to play with the product because you need to make sure that you do it. And of course, sitting with the CEOs at least once [00:39:00] a quarter, but being available as much as they need for questions or to get an advice. So I would call it it's a relative, relatively involved board member kind of position that I'm trying to take. But again, always remembering I'm not managing it. And second, I have an obligation to also make sure that they do things right. If all works well, and I'm very lucky to sit in three amazing companies where managements are, first of all, you know, best of class [00:39:30] entrepreneurs and great companies and great, by the way, people, by the way that I enjoy working with, which is also important, but I think that all of them have the importance of corporate governance, the importance of doing things right and building things right as a top priority for them. I'm very happy because it reduces my risks, but also makes me, I think, more capable of helping them. Because we don't fight, we simply work together and we're able to see things [00:40:00] in a in the same way. And therefore the board can really advise. And again, knowing that not all the time the advice is taken, but we can start at the very, I would call it clean level, where we simply see the aim, the goals, the targets in the same way.

Isaac Heller: Very nice. And I can tell you, you know, on the on the startup journey and the entrepreneurial journey, you appreciate your board more and more over time. And you mentioned just really being a sounding board. Um, [00:40:30] what happens, I think especially in the in the startup journey, is you start out and you don't necessarily proactively seek your board. Right? But over time, a moment comes up, okay? And it's a vulnerable moment. And instead of ten employees, you have 100 employees. And and it's and if you can call your board member and they can answer that specific question with clarity for you, it's it's worth the world. Right. And and again, connecting it to be able to [00:41:00] answer that question, Ronan, you need a lot of that experience and all those motions in the accounting team and in the operational team and everything, to be able to be ready for that moment. That's awesome. You also, those three companies we mentioned all have really fun products, so it's easier to play.

Ronen Faier: And none of them, by the way, is a hardware product. Yeah, exactly.

Isaac Heller: Exactly. So you got software. And um, and by the way, I should mention that, you know, truly an Monday.com is a customer. Solaredge is a customer. So if if those [00:41:30] hit your desk and got your blessing, we we appreciate that. Um, but, you know, one of the things we've been doing at Trulia Is really applying AI to finance and accounting, which, you know, I think our early cases were things like lease accounting and revenue recognition. Now we've moved on to audit external and internal and this broader AI automation for finance. We'll jump into the specifics. But you know it's it's early 2025. You're a financial leader [00:42:00] par excellence. Where are we on the curve of AI and finance. How much of it is real? How much of it is hype? How far away are we from the really cool, meaningful things put us somewhere.

Ronen Faier: So I think that we're very much at the beginning of it. Okay. At the very beginning of it. And by the way, and this is already a big step compared to where we were like three years ago or four years ago, and especially when it comes to automation. But I think that we're at the very beginning, and I think [00:42:30] that one of, of the, uh, um, facts that prove this is that you see more and more startups in what we call the CFO suite? Yeah. And in this area, because for many years, accounting was simply not interesting enough for, um, for startups. And I think that spending on finance was always seen as maybe waste of money, if you can put it in another CRM or something. But the two things that are happening is that, first of all, I think that the gap that was created in the [00:43:00] accounting area and other areas when it comes to the tools that can support decisions, is becoming too big. And I think that also the requirements by the regulator, by the auditors, by, by, by the way, the authorities, the requirements of tedious hard work that is sometimes doesn't have a lot of added value is increasing so much that it puts a very big stress on the finance departments and really distracts them from the ability [00:43:30] to make decisions based on information, and not just data. You see that today a lot of departments, finance departments are recording data, trying to query for data. They don't get the ability to really drive data driven information. And I think that I and here it's amazing because a lot of the processes in finance are repetitive. Very very structured. So I is exactly what what is needed for [00:44:00] those. By automating this, you can really free up finance people to give the added value. I still think that what we see is very little. I think that we are almost, if we take it to the computing world, the Commodore 64 or Sinclair Spectrum, right? It's we're far from other places. I think that we're at the very beginning, very nice.

Isaac Heller: And we agree that we're at the beginning. I'll just tell you a quick story because it made me think of it. You know, it truly [00:44:30] when we started in um 2019 2020. Um, I was coming from Texas and New York. I'd come with my wife, my family for about a year in, uh, in, in Israel at the time and had this idea of applying AI to accounting. And first I pitched the Israeli VCs and I did not get any interest. Not only that, but it was it was like we were speaking [00:45:00] a different language. Um, fortunately, when Covid hit, we started going zoom to the American VCs. Now there's just a small distinction. The Israeli VC world five years ago was much more optimized on early stage startups, less accounting demands. Right? So these weren't like, if I had talked to you, you would have understood. But you may have been one of the few true CFOs, public company audit and stuff like that a lot of the [00:45:30] US forces had been through a couple cycles of IPOs and M&A, and so they understood accounting and audit and it resonated with them. Right. Fast forward to 2025. There are two dozen legitimate Israeli startups in the office of the CFO. They're probably calling you and many of your other peers, um, backed by by really, really impactful investors. But they're saying the same things that we were saying 3 or 4 or five years ago. [00:46:00] So it's just really interesting how there's been this kind of enthusiasm in the market towards the office of the CFO. So I guess one one thought or question to you is when you look at AI and accounting is too much now, too much emphasis going into AI and accounting tools when it comes to the investment in the ideas, or is it not enough, like you're saying we're in the beginning, are we are we catching up in terms of investing and trying and doing all these tools. Does [00:46:30] there need to be more? What do you think?

Ronen Faier: So again, I'm starting from, from from the fact that it needs to be more because again, I think that today you see too little of tools that are actually being used. And by the way, part of it is because that finance, a lot of finance departments and finance heads are a little bit hesitant in adopting new technologies sometimes.

Isaac Heller: So so is the more should the more be on the finance and accounting teams? I mean, they're reading LinkedIn [00:47:00] every day and they're uh, I this, I that and you're saying they should be leaning in even more because I can tell you the tools are out there. No. For me and my peers, I think.

Ronen Faier: It's for sure it's there. Yeah, for sure it's there. Uh, by nature, by the way, finance people are usually not the guys who run after new things and are very open to new ideas. You know? Yeah, sometimes we're attracted to these worlds. We people. But but in many senses, I think that a combination of its combination of several things one. First of all, people that [00:47:30] are actually involved in the day to day repetitive jobs of finance are afraid to lean towards these new tools because it threatens their jobs. So by definition, they're a little bit more concerned. A lot of times you see that financial managers are not willing to take this, you know, this step in because they're either overwhelmed with the amount of job that they say. I can tell you, at least in Soul Edge, we used to have, I would say in the last year, at least 15 startups knocking on our doors, asking to [00:48:00] adopt the product or to try it in finance.

Isaac Heller: In finance. Yeah, we.

Ronen Faier: Know, at least I know. And we did, by the way.

Isaac Heller: But yeah.

Ronen Faier: But you cannot do everything. And by the way, each and every idea was good. But at the end you know you cannot. Today there is overwhelming amount of ideas compared to the time that people can actually dedicate in order to actually take them. And I think that you're starting from what's more painful for you. So for us, again, it was this leasing standard that was extremely painful that you were able to very well [00:48:30] fulfill this, this need for us. But I think that first of all, it's the time needed. And second, I don't think that AI tools yet passed, at least when it comes to the pitch. The point of being a hyped, um, ideas translated into a capability that shows the CFO here you can save this and this amount time when you close the financials, okay, this and this time that you can do I can [00:49:00] tell you that automation is usually easier, um, easier to be implemented by companies because automation is very easy to, to see what's the benefit and how much it can save. And I think that the way to resolve and to see results is relatively quickly, the more advanced tools when it comes to cash flow management, right. Most companies still manage cash flow in Excel. Yeah, it doesn't make any sense.

Isaac Heller: Guilty, exactly.

Ronen Faier: Yeah. Well, you know. Right. Um, if you look at, by the way, just [00:49:30] a think of the time that is needed to query data, especially if you work with a large ERP systems. Querying data is a huge pain. If you think about I, I think the data should be at your tip of your finger so easily. And by the way, when we talked about 70% of data, when you have when you make a decision, I think with the right AI tools and if you do everything needed to make sure that the data is prepared for these [00:50:00] tools and maintained in the right way. But if you use the same tools, you can get to 8,085% of the data. Today, most of the decisions are not taken where you have enough data, because you don't have enough time and enough tools to query the data. I can shorten this because you'll have more free people to do other things that can be automated, and you'll have much better tools to extract the data very quickly. I'm looking still for ChatGPT. Where when I kind of a tool where I ask what [00:50:30] were my sales in 2025 to this and this segment? That I can get a result within one prompt, uh, on my computer and to get the data that I feel. That is reliable and not just a black box, because I'll be afraid of black box if I can get reliable data. That's just amazing, because today when I ask this question, sometimes it's three hours until I get the answer. Right now I can get it now with AI.

Isaac Heller: By the way, Ronan, if [00:51:00] you can get it in three hours, you're ahead of me. Okay, okay. Sometimes it takes us three days, right? Um, okay, so let's take let's take the cash flow example. Right. On one hand, we hear that AI is in the beginning and it's so powerful. And it has a, you know, an. Opportunity to transform finance and accounting, which we agree with. And then on the other hand, finance are slow. They're the last adopter, slow adopters, risk averse and everything like that. And then I heard something in between, which is like, [00:51:30] yeah. And then sometimes when we see these tools, they're not above the threshold for us to adopt either. They need to be so good that we stop everything or they need to fit a specific pain point. So let's let's take cash flow, for example. That's in the spreadsheets. What's stopping you or your company that's in spreadsheets from adopting the cash flow tool? Because I know there's ten out there. There's three probably in Israel, I have a couple friends that do. One, um, is the tool not good enough? Do you not have the time? Are you waiting? Are [00:52:00] you stuck in Excel? Where are we today and does it change in a year?

Ronen Faier: So again, I think it's a very much company specific question, but I would say that if I I'll try to rank them. The first one is that it's a kind of a vicious circle. The people are working too hard on their excels and they don't have time to really free time, right? In order to adopt the tool, sometimes it happens, by the way. The second thing I believe is is really the fear of making change. [00:52:30] It simply change management. People that say, okay, I have a job today, I have knowledge. It's maybe it's my job security. It's the ability to know and to understand that adopting a tool makes you better, makes you more valuable. Because you bring data, you bring actionable data. It's something that I still believe. It's an obstacle that most people did not come. So I would say time first of all, change management. And then comes the tools. Because if you have a good partner and one [00:53:00] of the best thing that I see with the startups today, they say, hey, be my design partner, help me be better, I'll design everything for you. So you don't have just a tool like Salesforce today that is so mature that you need to take it, and you need to take professional services. And if you need something from Salesforce, God knows if they'll help you. So many startups saying, work with me, be my design partner. I will make sure that you. Will get a very quick resolution for problems. I think that, um, once [00:53:30] a decision is made and the time is dedicated, I think that you can very easily adopt those tools. And I think it's going to be a little bit of an almost exponential growth in the adoption that you will see, because you already start to see companies that are adopting. Right. And then it becomes almost a standard, and then the tools are becoming so much easier to implement and better that you'll see this exponential, uh, adoption.

Isaac Heller: It's yeah, it's interesting. And we don't know when the exponential curve is going to happen. [00:54:00] We feel like it's coming. Obviously it's going to have a big impact. I mean, do you do you expect any let's just call it major disruption coming. And I'll get more specific because like with change management When you sit there and say, there's this awesome thing, but there's some change management issues, sometimes the the change management happens. It just gets forced in. Sometimes that awesome technology comes through a different angle or it changes in a different way. And I can't even say that because we can't predict it. When you think about [00:54:30] the structure of a CFO, I'm a CFO. I've got my accounting team. Let's call that close backwards looking. I've got my finance team. Let's call that a little bit more forward looking. I've got my auditor. Maybe I've got my advisory partner. Right. That's those are five different parties. Let's throw another one in there. My ERP my system of record, Oracle NetSuite, whatever it is. Um, are there any of those players in there that are going to be most impacted [00:55:00] by AI when it comes in, and how?

Ronen Faier: So first of all, I think that if I need to, to or rank them by order, I think accounting will be the first.

Isaac Heller: Okay.

Ronen Faier: Simply because again, it's repetitive, very predictable things. And I think that automation can greatly improve them. So I would say accounting first.

Isaac Heller: So so just quickly on accounting because that's our favorite. Um, how does that change my senior accountant or controller. What am I doing now? What am I doing in five years [00:55:30] with AI?

Ronen Faier: I would say that today you are 70% of your time working to record data and analyze and sorry and maybe prepare data and then 30% analyzing. I think that within three, four years, 70% of the time, you'll be analyzing and and bringing the meaning of the data, and only 30% will deal with the data itself, with recording, making sure that it's right, and querying [00:56:00] this.

Isaac Heller: Data to okay, this is a tough question. Does my team size change at companies with accounting teams? Does my role change at at companies.

Ronen Faier: So I would say that, you know, um, maybe from my, my, my short time as managing the company, I would say, yeah, I would like to see a smaller team because now you have all of these automated tools. Yeah. I think that teams will remain at the same size, but you'll see a shift in in what they do. I think that they will provide [00:56:30] much more. The power of data is there. I think that you'll find the same size of people or same size of group, but you will find that the majority of the group is providing much more accurate, actionable data compared to the past. And by the way, once organization get good at, uh, um, actionable data, they get addicted to it, right? So I don't think that you will see smaller finances. I think that you'll see a much more, um, professional [00:57:00] finance when it comes to analysis and data driven decision making, finance rather than a company that or a group that is recording data, making reports and then send it for quick analysis. It will simply shift. You won't see less people, I believe.

Isaac Heller: Very interesting. So same amount of people. Um, you're the CFO. Maybe. Maybe. Let's throw another thing like we also, I'll just tell you another thing. Interesting. Um, you know, we're like the old guys now. [00:57:30] Like doing AI for five years is, uh, is is like 1.0, you know, or whatever it is. What's interesting is, you know, a trillion. We serve the CFO, the corporate controller, essentially, but we also serve the auditor. And we've been saying that from day one. And part of it came from my experience of going through these new standards, lease accounting and rev rec. And I said, hey, we as the as the corporate accounting team are doing all this work and it's just a bunch of document reading and spreadsheets and nothing's [00:58:00] going in the ERP. Right? Because SAP or Oracle didn't have the module weight. And you're telling me that our auditors, who we also pay, have to recreate this, but they're relying on SAP, right? That's their that's their sampling engine. And so I've always been very interested in this idea of the two sides of the market and maybe some inefficiencies here. Now what I've learned is, you know, obviously audit is a highly regulated world and there's reasons for those those independence protections. But talking to an auditor [00:58:30] five years ago, EY, PwC is completely different than talking to today. And I'm telling you, in the past year something has changed. We're working with one of the big four right now, and I can look at my emails from 2021 and they just did not care, wouldn't listen. And now it's changed. And what's interesting is the people are different. Yeah, it's a different person. Right. And so I just want to reflect maybe a little bit more. You're the CFO because a lot of your job is working with external auditors, advisory [00:59:00] firms, regulators. Do you think that the the service industry gets maybe disrupted more or integrated more. Is there any impact there? You talked about the eternal accounting team. What about external accounting?

Ronen Faier: No. So for sure I think it's the same process that is happening because first of all, again, when you're looking at and when you talk about advisory, there's a difference, I think, between the auditors and advisory services that are not later being, uh, you know, uh, audited by the [00:59:30] PCAOB. Right. When it comes to the auditor, it's all about risk management. It's all about risk management. Now, the tools for the auditors to make a very thorough audit prior to having more and more technology, more and more AI, more and more data was very much limited. The amount of work that they needed to do, especially in large companies because of lack of automation, really did not allow them to find real issues. I see today when the auditors come, they first of all, they [01:00:00] take their your data to run on their systems. Right. You're accounting is now completely exposed to them. You know, in the past, they used to sample. Yeah. And I always used to laugh that if I want to do something, I'll just write, you know, in my PNL. I'll call it, you know, embezzlement, Ronan. Yeah. 499, $99,000. Because their threshold is $500,000 and they wouldn't find it. Today, it wouldn't fly.

Isaac Heller: If you had an embezzlement invoice. If it matched, you would be fine.

Ronen Faier: Exactly. But but but that's the thing, you know? And today they take all [01:00:30] of the data. They can go to smaller areas. Now, I think that over time, what will happen is that they will rely more and more if there are standardized systems. I think that they can rely more and more on those systems. So it makes their work much more precise, much more, um, um, much less riskier in a sense, and I think much more efficient. I think that what you will need to see over time is that the systems can actually talk to each other relatively. Okay. So if you have a [01:01:00] trading system that is adopted by the big four and they say, we trust you, we know that whatever is coming from this is certified. It's not a black box where I don't know, maybe it's a black box, but I know how the result is being produced. The audit of E on my leasing accounting is going to be much easier, so I think that it will change significantly. And again, I think that that that's part of where the world is going, you know, going to evolve the [01:01:30] existence of data, the existence of the ability to extract data easily, to analyze it in large masses is something that is growing.

Ronen Faier: And I think that the more it is being standardized, the auditors will benefit, the companies will benefit, will not have to fight on. Did it happen or did it not? I think that's going to be much easier. And maybe the last thing I would say around this is that I think that you mentioned it, and I wanted to mention it also before. What will really change is that people. My 16 [01:02:00] years old son is native to I right now. Yeah, he's doing so much with I the next auditor four years from now, five years from now will come from this generation. When they will come, it will not even be a question whether I is needed or how relevant it is. It will be how much of it I'm using. And I think that that's that's part of the thing that will change. People are simply growing with this technology.

Isaac Heller: Amazing. Okay. This has just been a bundle of wisdom [01:02:30] and good stuff. So maybe, maybe to kind of wrap it up or last thought, you know, you mentioned your 16 year old son, but, you know, maybe it's your son, maybe it's someone who's going to college, maybe it's someone who's graduating college. What what's your advice today for people entering the working world thinking about an accounting career, perhaps. What do you say to them?

Ronen Faier: So I really come back to to one of the sentence sentences I said before, it very much depends on what you want to be, But if you want to be an executive in a company, which I think [01:03:00] I figure a CFO is the most important other than the CEO is make sure that you are a management member wearing the finance hat. Make sure that your finance department is not the department that is stopping things or being feared of, and getting very less cooperation. Make sure that you are adding value to each and every process. My biggest, I would say [01:03:30] achievement in Solaredge was for example, or one of the biggest that my team together with. I formed our first distribution center in the Netherlands for Solaredge. Finance Department took a project of building a warehouse that is distributing our products all over the Netherlands and Europe, and it was finance and the reason that it was financed, it was because operations said, we entrust finance to do it good. And [01:04:00] the CEO knew that as a CEO, CFO, I'm not just making financial statements. I have the business judgment that I can operate. I think that once you become a management member that wears the CFO hat, you're bound to success because eventually what organizations are usually missing is good management, not good accountants, but good managers and CFOs are usually very good tools. So I would tell plan to be [01:04:30] a CFO, but plan to be a manager in the organization. That's what you should do.

Isaac Heller: Amazing, I love it. Um, I'm really happy we got to connect. Thank you. We'll check in on this in a year from now in the AI crystal ball, and hopefully get to talk a lot more. But thanks again. Thank you very.

Ronen Faier: Much. And thank you for hosting me.

Isaac Heller: All right. Cool. Thanks. Thanks.