We’ve identified three key finance-led processes you can streamline so you can spend your time focused on helping your business grow:
- Improve revenue planning and reporting by gaining insights from key metrics
- Automate data integration to create a single source of truth and improve organizational alignment
- Accelerate your ASC 606 revenue recognition compliance activities
Read on to learn best practices you can implement to streamline these processes and how other SaaS companies are succeeding by automating these time-consuming activities.
1. Improve Revenue Planning & Reporting With Insights From Key Metrics
They say the devil is in the details and with more competitors arriving on the SaaS scene every year, modern finance teams need to be able to drill deep into key success metrics to uncover hidden insights and plan for the future. And in the SaaS industry, there is no shortage of metrics for you to track, such as:
- Annual recurring revenue (ARR) growth
- Customer lifetime value (LTV) and customer acquisition cost (CAC)
- Net monthly recurring revenue (MRR) growth
- Customer churn, rententions, renewal and expansion rates
For SaaS revenue forecasting, it’s important for you to have financial and operational reporting tools in place that give you the ability to get a more granular view of your data, including visual dashboards that show key metrics and trends. Doing so will allow you to uncover opportunities to better manage your revenue performance. With SaaS revenue forecasting, the ability to break down sales pipeline by geographic location, size of company and other cohorts can open the door for deeper analysis and valuable insights to include in reports for upper management. And knowing exactly which marketing campaigns are generating the most revenue can help you decide where to allocate funds in the future.
For Bruce Harris and the finance team at Asure Software, the ability to drill down into any data dimension with just a few clicks in Vena and to slice and dice this data using intersections has been a game changer. It’s saved Harris and his team a ton of time and given them the data granularity they need to extract valuable insights and to create reports that allow the rest of the company to better understand what’s working, what’s not and what the vision for growth looks like moving forward.
2. Automate Data Integration to Create a Single Source of Truth & Improve Organizational Alignment
Having a granular view of your data is only valuable if you have that data in the first place. But as Vena’s recent 2020 Industry Benchmark Report revealed, data silos are still a challenge for 57% of finance teams in 2020. Evidently, there is still room for improvement for SaaS organizations—and businesses across industries—when it comes to creating a single source of truth for all financial and nonfinancial data. From disparate and disconnected data sources to time-consuming manual data entry tasks, it’s easy to understand why data integration is still a challenge for many.
Integrating data from your finance, sales, marketing and customer care teams helps break down departmental silos. It also helps you create a holistic view of what is driving—or hindering—revenue growth. SaaS companies need to align departments and help them understand how they can best contribute to company growth. Integration with your CRM, ERP, GL and other key departmental systems is necessary to see the big picture and to make data-driven decisions.
Do we need to adjust our pricing strategy? What about our sales forecasting? What types of marketing campaigns should we double down on? How can we increase our customer lifetime value (CLV)? With the right data from the right department at the right time, you can answer these questions and make decisions based on insight, not instinct.
To create a single source of truth and to get a holistic view of operational data, the finance team at Nutanix, an enterprise cloud computer company specializing in hyper-converged infrastructure software, leverages Vena’s native integrations with source systems and cloud applications. Nutanix seamlessly connects Vena to all of their existing data sources, including Netsuite (for transactional ERP data) and Salesforce (for sales and customer info) to automatically transfer data—be it plan numbers, actuals, user comments and other metadata—ensuring that everyone sees the right data at the right time. “That single source of truth has really proved to be essential for our business,” says Rob Pastega, Senior Manager of Demand and Supply Planning at Nutanix.
3. Streamline Your ASC 606 Compliance Activities
The ASC 606 revenue recognition standards came into effect in 2018 for public companies and in 2019 for private firms. In short, the goal of ASC 606 is to standardize the accounting process for recognizing revenue, which had previously been a little murky because of the subscription-based and service-oriented nature of SaaS applications. For any company that enters into contracts with customers to transfer goods or services, complying with ASC 606 is mandatory. Failure to adhere to these standards can result in stiff financial penalties, putting a damper on your plan to grow.
But ASC 606 compliance can present a number of challenges for finance teams. Integrating a larger set of data that includes a detailed amortization schedule to account for expenses such as commissions and support can be time consuming and error-prone if done manually. Likewise, your compliance and period close processes can be slowed down if you're not using a tool that allows you to automatically consolidate customer transactions. Both of these challenges hurt your ability to comply on time and have confidence in your numbers.
So how can you accelerate ASC 606 compliance activities to ensure that revenue recognition requirements are being met? Here are a few best practices to consider:
- Automate data integration. As mentioned above, complying with ASC 606 standards requires aggregating large amounts of data from across the organization, often from disparate data sources including your CRM, GL and ERP. To speed things up and to avoid data integrity issues, be sure to use finance-led planning software that integrates with all of your on-premise systems and cloud applications.
- Streamline consolidation and reporting activities. With all of this extra data in your hands, the consolidation and reporting process can be time consuming if done manually. Rebates, sales compensation and accruals are just a few revenue-related costs that would have to be considered. So a tool that allows you to automatically consolidate all of this data and standardize your regulatory compliance and reporting process is a must for finance teams looking to dramatically speed up the ASC 606 compliance process.
- Champion teamwork. At the end of the day, effective communication and alignment across your organization are just as important as having a complete and easy-to-use planning solution. Although your finance and accounting teams will be taking the lead, collaboration across your sales, customer success, professional services and legal teams are key to ASC 606 compliance.
By uncovering hidden insights in your reports in a compelling way, creating a single source of truth for your data and streamlining your ASC 606 compliance activities, you’ll be able to grow your SaaS business with confidence and agility.
Check out our free, CPE-accredited talk, “Transforming Regulatory Reporting Through Teamwork” on plantogrow.com to learn more about how you can streamline regulatory reporting.
Request a demo today and find out how Vena’s complete planning solution can help you chart your path to growth.