Software-as-a-Service (SaaS) companies are under pressure to grow—and fast! But growth needs to happen strategically in order to optimize spending and maintain runway, while avoiding obstacles along the way to unicorn status (and beyond).
To navigate the various stages of SaaS growth, data needs to come together from across the company—from sales and marketing to customer success and operations—to plot in the details of where the company has been and use leading and lagging indicators to determine where it's likely to go. But the more time you spend gathering data, the less time you’ll have to do value-adding analysis on past, present and forecasted data to map out the best route to your next milestone and beyond.
By setting data gathering on autopilot and presenting it in easy-to-understand reports and dashboards, the right FP&A and extended planning solution can make all the difference in staying on course. And a few best practices can help your SaaS company choose the right FP&A and extended planning solution for navigating any stage of growth.
Best Practice #1: Connect Disparate Data Sources To See All Leading and Lagging Indicators in One Place
The data points you need to steer your SaaS company toward success come from systems across your entire business—not just financial systems (ERP/GL), but also your customer/prospect (CRM), marketing cloud, contract/bookings and human resources (HRIS) solutions.
To stay on track, you need to be able to transform this data into insights by combining it across different systems, such as your ERP and CRM. Unfortunately, disparate data systems don’t usually talk to each other, leaving many SaaS teams aggregating data from multiple spreadsheets. But there is a way around the copy-and-paste shuffle: integrate data from your existing systems into a centralized database so that you can access, combine and analyze all the business-wide data you need from a single source of truth.
Best Practice #2: Automate Processes and Use Workflow Management To Streamline Collaboration
The more often you share key data and business KPIs, the more feedback your team has to drive the decision making that will help your business navigate the challenges ahead. But if you are manually gathering and sharing data for planning and reporting, you risk slowing momentum with errors, rework and multiple template versions. Put data integration, data validation and other intensive, time-consuming processes on cruise control so that you can focus your attention on what matters most—your business drivers and collaborating with teams to accelerate growth.
To further govern and automate your planning process and provide transparency around status and bottlenecks, share secure templates that enhance collaboration. When your FP&A and extended planning solution automatically populates templates with scheduled data loading and allows you to customize editing permissions per user, you can more easily manage workflows and get to the next stage of your journey together.
Best Practice #3: Plan for Any Scenario To Make Agile and Informed Business Decisions
While your SaaS company needs to be able to pivot quickly, you can’t just be reacting to market changes—you need to be prepared for multiple scenarios and be proactive in your planning.
Leverage the multi-dimensional modeling capabilities of an FP&A and extended planning solution to plan for any eventuality with what-if and scenario analysis. You want to be able to adjust any key performance indicator, such as CAC and ARR, in an instant to compare scenarios and make frequent updates. And to produce an informed plan, you need to integrate actuals and forecasts and reforecast often to ensure accurate revenue projections. When your FP&A and extended planning solution helps you plan for change, you keep control of the wheel.
Best Practice #4: Use an Industry-Specific Solution Built for SaaS To Supercharge Growth
To plan ahead, you need a solution that understands both the traditional budget requirements of planning for your standard financial statements as well as key SaaS metrics.
You’ll get more mileage out of an FP&A and extended planning platform configured specifically for the unique needs of a SaaS company. You’ll be able to plan for subscriptions, services and other sources of revenue, operating expenses, capital expenditures, balance sheets, workforce and indirect cash flow with ease using SaaS-specific KPIs such as efficiency ratios, customer acquisition cost, lifetime value and more.
Best Practice #5: Choose a Solution That Inspires Users To Engage and Share Data and Insights
Keep your teams engaged in the planning process and invested in results by sharing plans and feedback—and doing it frequently.
Use an FP&A and extended planning platform with intuitive and easy-to-understand dashboards to show off your Gross, Expansion and Churned ARR as well as your subscriber count, CAC and LTV. With automatic integrations and updates, you can share your plan with your board, employees and investors instantly—or whenever you want regular reporting. But simplicity is key: if onboarding and change management is too complicated, your team won’t trust the tool or use it and will resort to using their own offline, disconnected Excel models. For engagement that drives results, ensure the solution you choose is simple and easy to use.
More FP&A Solution Criteria To Consider
In addition to the five best practices for FP&A solutions listed above, there are a few more features and tips to consider that will help you make the right decision for your business:
- Presentation power: Review dashboards and decision-ready reporting capabilities to ensure you’ll have all of the insights needed to make quick and accurate decisions.
- Onboarding process: Make sure you can get the FP&A and extended planning solution up and running quickly—without a lengthy setup process—and that it’s easy for your users to adopt with a familiar interface.
- Ability to scale: The right solution should grow with your SaaS company. Can it support complete planning or will you need to invest in multiple point solutions for all the features you need?