Article credit: Sage 

If you’re the CFO of a subscription billing company, you want to bring clarity to decisions, understand where to invest, and track cash-flow and SaaS metrics, in the chaos of dynamic, competitive markets. The best CFOs balance out this equation by giving their departments clarity and direction with SaaS metrics and role-based financial dashboards. 

It’s a common saying that if you don’t know where you’re going, any road will get you there. But in the SaaS world, if you don’t know where you’re going, you won’t go anywhere because you’ll never generate any traction.

Key performance indicators (KPIs) and financial dashboards will help pave the way to your success. KPIs give you a real-time snapshot of your business’s performance at different points: monthly, quarterly, annually, etc. 

They also allow you to analyze your revenue and cash flow patterns, identify where you’re wasting money, and more.

Financial dashboards are just as important. They give every person on your team a customized one-page view of all the financial information they need. With modern software tools, you can say goodbye to the headache of hunting down five different manual folders to gather data for an upcoming board presentation. 

But before we get deeper into dashboards, let’s break down the major KPIs and look at why they matter so much.

Unlock continuous improvement through KPIs

Tracking KPIs is one of the most critical essential responsibilities of any CFO and the broader finance team behind them. Identifying and charting your most valuable SaaS metrics enables your entire company to understand its position in the broader marketplace. 

KPIs offer insight into where you’re succeeding, so you can double down on those strategies. And just as significantly, they raise red flags about what’s failing, so you can alter or abandon bad ideas.

Some of the most important metrics for you to watch and report on include your: 

• Customer Acquisition Cost: Your CAC measures how much money you spent to acquire a customer or customer set. It helps you track which customers may not be worth the investment you’re making to obtain their business and which customers give more value than they take to acquire.

• Customer Lifetime Value: Your CLTV indicates how much revenue a given customer generates for your company before they unsubscribe from your product or service. Customers with a high CLTV should be prioritized for upsell cross-sell attempts, and you should target prospects with similar characteristics.

• Churn Rate: SaaS churn is a crucial metric. It measures how many of your users unsubscribe over a given period. A high churn rate could point to problems with your product or market fit, an issue with your payment processor leading to involuntary churn, or something else. Churn should be looked into and corrected quickly.

Keep your SaaS metrics at the top of your hierarchy of business values. Treat them like your guiding lights in the rough seas of a competitive market because that’s precisely what they are.

Stay organized with financial dashboards 

Financial dashboards are an incredible organizational tool for finance teams. They help every member of your team stay organized by condensing all the information that a particular person needs into one convenient screen.

These single-glance screens are known as role-based dashboards in the SaaS community. They allow your team to accomplish more in less time by eliminating manual accounting processes and reliance on outdated spreadsheet-based tech. 

With financial dashboards from SaaS accounting automation solutions, all it takes is a single glance for different members of your team: 

• The CFO Dashboard: This view allows CFOs instant access to all the cash flow data and metrics that your board (and investors) will want to know about.

• The Controller Dashboard: The Controller view puts every piece of information your Controller needs in one centralized location. A single click will give them access to cash flow metrics, wage and salary info, budgeting data, and more. 

If you’re sensing a common theme between SaaS metrics and financial dashboards, you’re right on the money. It’s all about staying organized and the quantum leap in results you can access by analyzing where you are, and where you’d like to go.

Invest in your success 

Investing in the power of automation is one of the greatest gifts any CFO can give their finance team and their broader company. 

The organization, clarity, and heightened effectiveness that accompany an investment in high-quality accounting software speak for themselves. But if you’re still not convinced, contact us and find out how Sage Intacct can boost your business.

Article credit: Sage 

When it comes to being an effective and efficient SaaS CFO, a fintech automation tool can be one of your best friends. Your company probably uses a communication tool like Slack or Microsoft Teams, right? It enables people to stay organized and accomplish more in smaller increments of time. 

Think of your accounting automation tool in the same light. It’s a technology-driven extension of you and your team that helps you keep your reporting organized and perform at your peak capacity.

Let’s take a deeper dive into five primary reporting essentials for SaaS CFOs and how an automation platform can help put them in your grasp.

1. Seamless KPI Tracking

We don’t have to tell you that accurate reporting is one of your top responsibilities. You already know that. 

But you might not know how essential staying organized is to create a profitable year for your company. Savvy finance leaders utilize automation to massively cut down on manual processes and the mental and physical clutter they create. 

They opt for software solutions that can give them access to all their essential SaaS metrics at a glance: 

• CAC (Customer Acquisition Cost)
• CLTV (Customer Lifetime Value) 
• ARR (Annual Recurring Revenue)
• Customer Churn Rate
• …And many more

Having all of these SaaS metrics immediately available in one location is critical (this is known as data centralization).

2. Reliable Forecasting Abilities 

It’s not enough to report accurately and efficiently, however. As a C-level finance professional for a subscription revenue company, you need to make accurate, actionable forecasts that enhance your company’s bottom line.

An accounting automation platform can help you make reliable forecasts by: 

• Providing instant access to your monthly recurring revenue (MRR), subscription upgrades and contractions, churn, and other essential figures for reliable forecasts.
• Using the analytical power of automation to forecast different scenarios and make various revenue projections based on each.
• Examine your pipeline at a microscopic level to capitalize on trends and identify your most profitable product and buyer segments.

Now that we’ve discussed the importance of staying organized in your reporting and forecasting, let’s take a quick look at enhancing personal accountability for SaaS finance teams.

3. Accountability in Front of Your Board

When you’re giving a presentation in front of your company’s board, few things are more important than being able to trace accountability back to your team members for their exact contributions.

It may look good when you lay out your grand strategic vision for the coming quarter. But no matter how inspiring that vision is, you’re going to need to come back and prove a few things to your board: 

• Which members of your team contributed to specific corporate milestones such as AR gains
• How did your strategies and ideas reduce the company’s DSO (the number of days that sales remain unclosed) to optimize cash flow
• What immediate and traceable impact did you and your team have on quarterly and annual profits? 

Sage Intacct’s streamlined role-based dashboard will enable you to answer these critical questions with clarity and confidence. And if things don’t go as planned for a given quarter, you’ll be able to formulate an effective plan to get back on course.

4. Instant Access to Your Bill-To-Order Ratio

Also called the book-to-bill ratio, your bill-to-order ratio measures how many orders you’re receiving versus how many orders are being billed and fulfilled.

So if you’re fulfilling every order in real-time or close to it, you’d have a ratio of 1. That’s par for the course. The bill-to-order ratio becomes more important when your ratio falls above or below 1. 

A number above 1 shows you’re receiving more orders than you’re completing and billing across a particular period. It shows that you might need to look for payment processing issues and other problems stemming from excessive user demand.

A number below 1, on the other hand, implies that user demand might be starting to wane a bit. Even though this may not seem like great news, it gives you a chance to analyze which customer and product segments might be losing steam.

Remember, knowledge is power, and if you can figure out how to fix bad news, you’re still well-positioned. An automation tool like Sage Intacct can help you and your team keep track of your bill-to-order ratio accurately and effectively, so you can develop strategies and solutions in real-time.

5. Strategic Bandwidth 

When it comes to reporting and forecasting, aim to maintain a firm grip on two things at once: the daily developments occurring in your business and a forward-looking sense of the coming months and years. 

As you can imagine, this can be a tall order for even the most experienced CFOs. Automation is one of the best and fastest ways to reduce data siloed, and increase your team’s strategic bandwidth.

Eliminating manual processes will enable you to orient your entire department around long-term strategic thinking and high-value activities. 

Empower Your Finance Team Today 

Automation is the only way to report and forecast with maximum reliability and effectiveness. Contact us today to learn more about how Sage Intacct can help your business.