There is a ton of information to learn when it comes to preparing for the CMA accounting exam. But how can you absorb so much information and then be able to actually apply it?
Nathan: Hello everyone. Welcome back to a new edition of the CMA Exam Mastery Course Podcast. Today we have a very special guest with us, David Elrod. David is joining us from Atlanta today. He holds the certified management accountant designation, and also the certified public accountant license. He works at Cumulus Media as their senior director of finance. And something really interesting about David is that he's also an independent fiction writer. So we will be asking David questions about that and getting more information about his books. So today we have a lot to unpack. So let's go ahead and get started. David, welcome to the show.
David: Thank you, Nathan.
Nathan: So, how long ago did you earn your CMA designation?
David: Yeah. I earned my CMA designation in 2004. So it's been about 14 years.
Nathan: When you took the exam, was that a four-part exam or a two-part exam?
David: It was a four-part.
Nathan: A four-part exam. Okay. So you had to study a lot more than we do now?
David: Yeah. It was the old exam. I think it was still computer-based when I took it. And it has been a while since I've taken it, so obviously I don't remember everything about it. But I remember going in and taking it on a computer and it being several parts.
Nathan: Yeah. So what were you doing prior to your CMA?
David: Well I have been in finance for about 18 years. And prior to getting my CMA, I had spent a lot of time in internal audit. And I saw theCMA as an opportunity for me to refine my skills that were more useful for me from a financial perspective. Because I had transitioned in my career from being an internal auditor to being a finance person. There are different skill sets that are required, and the CMA is a great way to really refine those skills and then set yourself up for success within finance.
Nathan: Okay. Yeah. That's really good to hear because actually, my question was because I knew you were a CPA...you had a CPA license prior to pursuing your CMA.
Nathan: So I was going to ask you, why you chose the CMA after obtaining your CPA license? So that answered that question. That's great. So you say in finance the CMA provided you with more skills set than the CPA?
David: Yeah. You know. Listen I went to school as an accounting major. A lot of schools and programs really push you to go to the CPA track. So coming out of college or going through college, there was a lot of focus on getting ready for the CPA exam and how important it was to get your CPA designation. And at least at the time, I was there, there was an internal focus on management accountants or CMA. So I went that track because you know, that's where they push you. And it was certainly valid when I started doing this [inaudible 03:22], but when I got into finance, I realized that a lot of the skills that I had learned in accounting and the CPA tracks weren't as useful, and I needed to have more analytical skills, and I needed to be more focused on things like forecasting and analysis. So the CMA exam certainly prepared me for that. And by forcing me to bone up on my studies and really understand those subjects better so that I could pass the CMA exam.
Nathan: Really interesting. It's interesting to hear the perspective of professionals who have taken the CMA and the CPA, and in what roles they've used those skill sets more than others. So that's really good insight right there. So you work as a director of finance for this company, for about a year you said, I think before the call we just had a quick chat?
Nathan: So what's your day to day like as a senior director of finance? For those people out there who aspire to be in that role someday.
David: Yes. So the day to day...today in finance, I have been in finance probably for about 18 years and it has changed over time. But today, I would say finance is heavily focused on trying to look forward and understand what's happening in the business and being able to provide insights for your business partners to help them make decisions that will hopefully make the business better and more profitable, more successful. And so I spend a lot of times analyzing what's happening, not so much as in the month or in the week or whatever, but really just trying to analyze real-time data. Understand what's happening in the business, so if there is anything that pops out to me from a perspective that I need to reach out to my business partners and say, "Hey, here's something that seems to be going off the track and we need to figure out what's happening." So I spend a lot of time in analysis and forecast mode. I'm really focused on trying to get my finger on the pulse of the business so that I can alert my business partners and help them. You know, most companies today are, they don't have unlimited human resources for many reasons. And so, you've got to have everybody on board to help drive the business forward. So there's a lot of focus from my perspective on good forecasting and analysis and really helping my business partners see what's coming around the bend. And of course, in a typical day, or in a typical week or month, you're going to do some of the very standard things that finance people do, which is preparing reports and analysis, and looking at the budgets and trying to understand what happened and why we deviated from the budget. Developing budgets for the year or the quarter. Doing rolling forecasts. Also doing long-term planning. That's another thing that you have to focus on in financing. All these things require sharp analytical skills. They require an understanding of how the mechanics of accounting and management accounting work, so that you can build forecast models and long-term planning models, and produce reports that are useful for your business partners.
Nathan: Yeah. So you have been doing this type of work for the past 18 years?
Nathan: Fascinating. So what's your biggest challenge at work as a senior director of finance, would you say?
David: I think the biggest challenge at least in my current role is just trying to understand where the market is going and how that's going to impact our company. Cumulus, the company I work for now is in the broadcasting industry. We depend heavily on advertising for our revenue. And like me, advertising-based businesses, there's a big disruption going on now with social media and Google search. That's not new. That's been going on for many years, but it takes time for that to get momentum and really affect the industry. So like the newspaper industry, like the TV industry, radio is facing the same challenges. And a lot of times in finance, when you're doing forecasting or planning, you look back at history to try to determine what it may look like going forward. But that's becoming more difficult because history is no longer a good indicator of what will happen because the industry is being disrupted.
David: In fact, that's my biggest challenge.
Nathan: Yeah. Times are changing quickly. Right? There's also automation coming into play in the accounting industry. Also in finance. So that's going to be disrupting the industry as well. So tell us a little bit more about what your company is focused on? What they sell and what they market?
David: So Cumulus is a radio broadcaster that have about 450 radio stations around the country. They are in 90 different markets around the country. And we're in most major markets like Atlanta, LA, New York, Chicago, San Francisco. And typically, a radio broadcaster like Cumulus will own anywhere from say three to eight stations in a given market. And the way the radio broadcasting industry works is that you typically own a cluster of stations in the market, and you try to cover it in different demographics. If you think about when you listen to your radio in the morning on your commute, you can flip through the dial and you'll get many different types of music. You could go from contemporary hits radio to hip-hop, to country, to adult contemporary. And there's all kinds of music formats out there. And each of those formats typically appeal to a certain demographics. So the key in this demographic is the 18-34, or 18-59, or 49 demographics. And those are their prime advertising targets. So you want to cluster that so you can hit on all the key demographics in that age range, but also female and male.
And if you have a cluster that covers most of the demographics in a given population, you can sell your ads for a higher rate and you get more attention from national advertisers. And of course, local advertisers will want to come on board too, because they want to reach as broad an audience as possible.
David: So we have sales people in the markets who work to sell ads in our radio streams, both our over the air as well as online. And that's how we make our revenue.
Nathan: All right. How big is the company at the moment, like in terms of like an employee count, or whatever you're comfortable disclosing?
David: Yeah. We're a public company. We have about 5,000 employees and we have about $1.2 billion in revenue on an annual basis.
Nathan: Yes. So you guys are a big player in the industry for sure?
David: Yeah. We're in the top three in terms of size in the radio broadcasting industry. There are a lot of smaller players, but we compete with the likes of iHeartMedia, which a lot of people know. And also, Entercom, which is another large radio broadcast company.
Nathan: So since you are like looking to the future, and that's the role you have now, so what do you predict is, like for an entrepreneur listening in to this, or a small business owner listening in to this, what would you say is what's coming on the horizon that they should pay attention to in order to put their business in front of more people since the marketing is changing so much?
David: A lot of people have jumped on the online bandwagon. And rightfully so. I mean, reaching people through online like Facebook orGoogle is definitely a great way to market your services. But I think you have to look at advertising and media as a portfolio, much like you would do with your stock portfolio. You won't invest in this one stock.
David: Or if you do, you run the risk of losing a lot of money. And I think the same thing is true with advertising. You don't work with everything in the Facebook bucket. You want to spread it around. And you know, I'll plug for my own industry here, radio still has an incredible amount of reach. The reach for radio, AM and FM radio is still greater than both TV and online.
Nathan: Yeah. It makes sense. Because what happens if the company invests all their marketing budget on one platform, for example, let's say Facebook, if Facebook goes away then they are suddenly with no marketing channel anymore. So yeah, it makes sense to diversity to various channels. Yeah. Like a portfolio. It makes total sense.
David: Yes. And that's the message that we try to get out in a lot of our work that we do at Cumulus.
Nathan: Yeah. It's a good message for sure. Now, this is a bit more of a reflective type of question. So, what would you have done differently to get your role as senior director of finance faster than you have, looking back?
David: I think you know, one of the first things I would have done is I would have taken the CMA earlier, and done it earlier in my career. You know, by the time I took the CMA exam and achieved my designation, I'd already been out of school for 11 years. And you know, I think that looking back on it, I landed in the spot where I wanted to be. It took me a while to get there. But I think a lot of it was just my narrow focus in college. I was focused so heavily on just being an accountant, and focused on the CPA track, that I didn't really pay attention to the other options out there. So what I would have done differently, is I would have gotten my CMA earlier, and I would have taken more time to look at all the options in the accounting field. It's not just being a CPA and going to work for a big four accounting firm. There are many, many options. And many of them are just as lucrative and fulfilling as being a CPA in a public accounting firm.
Nathan: So as business grows at Cumulus, I'm sure the company is growing and there's always a need for good talent. Right?
Nathan: So when it comes to growing your team. David, what do you look for in a candidate?
David: A key thing for me, and this is true not only in my current role but in previous roles is, I want someone who's going to come in, who going to be innately curious about the business and about the work. I would not hire anyone who just wants to come in and check off tasks on a list. That's just not something that you need and we can afford to have. And the people I have on my team today, are both very curious, they both take things to the next step up. They go beyond just what's required, and they take that next step. And as a result of that, they innovate. And innovation is not just in technology. It's also in financing and accounting. And the way you do that is through being curious and exploring things, and coming up with ways to either do something or analyze something or present something that's more effective and better than what we've done in the past. So the key thing I would look for is someone who is innately curious, and who would automatically take it the next step forward without being prompted.
Nathan: I agree with that. But I'm wondering how you, when you hire somebody, how you can tell that someone is curious and someone who's always going to go the extra mile for you, during the interview process?
Nathan: Let's say I'm looking for a job, and I see your ad, and I apply and send you my resume. How can you tell if I'm that type of person or that type of candidate?
David: Well, there's no foolproof way to select someone like that. And I've been hiring, I've been a manager for over 20 years and I have been hiring a lot during that time. And I could tell you, I've had some hits and I've had some misses. But one thing that I do is, I focus on examples, very specific examples. When I ask someone questions in an interview session, I'll say something like, "Tell me about a time where you demonstrated where you went above and beyond what was required of you?" That's one of my favorite questions, actually, because the answer, regardless of what it is, is very telling. And if someone tells me something that they consider above and beyond that I would consider just you know, run of the mill work that they should know to do, then that tells me they really aren't looking beyond what the past is. And I want to hear something that's dynamic, that shows that they took the initiative, that really demonstrates that they don't just wait for someone to tell them to do something.
Nathan: Super valuable. I get a lot of emails from readers of my blog, and they ask me questions like that. Like, "Nathan, I want to stand out." How do I get hired in these big companies?" So your answer addressed that specific question. So thank you for sharing that.
David: One thing I want to add is that you got to have good examples. And I'll come back to the portfolio analogy I used earlier. As you work for a company, you collect these examples of where you've done things, very specific examples. And that's your portfolio of skills, but also it's interviewing answers that you're developing as you work every day. And you got to have specific examples. You can't give very general answers. When I quiz people about this in the interview process, I want a very specific example. I don't want to hear, "Oh, I would have done this." I want to hear exactly what you did, specifically.
Nathan: Okay. Yeah. So looking at experience, not at what I would have done if this would have happened, or if that would have happened?
Nathan: Makes sense.
Nathan: Okay. Like showing a track record of what they have done.
Nathan: Fantastic. All right David. Well, we are up to the last question. Are you ready?
David: Yeah. Sure.
Nathan: So if you had to start all over again, like going back, like right out of college, like you know everything you know now, what would you do differently?
David: I think you know, I would have probably gone more into the management mechanics during college versus trying to pursue the more physical accounting path. Because ultimately that's where I landed. That's where I wanted to be. I didn't know it when I came out of college of course. But if I can go back and do everything again, that's what I would do. I would go right into that path. I wish I had known more about the IMA and the CMA when I was in college. I think that would have helped me be more informed, and also given me more options for my career. So that's what I would have done differently.
Nathan: All right, Great answer. I really want to thank you for coming on the show today, and sharing your journey with us, David.
David: Mm-hmm. You're welcome.
Nathan: Where can listeners find more about you if they want to connect with you online?
David: I'm on LinkedIn. I usually connect to a lot of people on LinkedIn. I'm open to having good conversations. I usually have some pretty good conversations. People reach out and they ask me about finance, they ask me about career things, and I'm certainly willing to help anyone who has questions and want somebody to give them some perspective. And so feel free to reach out to me on LinkedIn, djelrod is my ID on LinkedIn. Usually if you do a search you should be able to find me.
Nathan: Okay. Perfect. Then I'll just add that link to the show notes, so it's easier for people to find you as well.
Nathan: Fantastic. Well, that was the show for today. I hope you enjoyed learning about David's journey as much as I did. We had a lot of takeaways today. I hope you took a lot of notes, or at least mental notes if you're driving. If you have any questions you'd like me to answer in the next episode, go to iTunes and drop them in the review section. I'll choose between two to three questions to answer in every episode.
Thank you for joining David and myself today. And before I sign off, don't forget to dream big and realize your full potential, by becoming a certified management accountant.
Until next time.
Here’s What You’ll Learn in this Week’s Episode:
- Why the CMA accounting designation is crucial if you work in Finance.
- How to transition from internal auditing to management accounting, fast.
- Why the CPA may not be the best track to go with coming out of college.
- CMAExamAcademy.com/textbook — To claim your free CMA Part-One textbook in paperback
- Cumulus Media
- iHeart Media
- David Elrod LinkedIn
Like what you heard? Be sure to share it with your friends, family or coworkers and join me for brand new episodes every week.