Logistics software vendor Magaya Corporation has grown rapidly both organically and through acquisitions, with its global customer base expanding 69% from about 1,300 companies in 2018 to nearly 2,200 today. That growth, however, brought challenges to Excel-based budgeting and forecasting. With more expansion in the pipeline, the pains of time-consuming manual work and limited visibility only stood to worsen.
“It was very disconnected and manual to do forecasts, and our stakeholders didn’t have real visibility into budgeting,” as CFO Luis Guerra says in our Magaya customer success story. “I wanted a more automated and efficient solution that could also give our executives and managers ability to track budgets on a monthly basis.”
Moving from Excel to Sage Intacct Budgeting and Planning has delivered the capabilities required at Magaya, which provides end-to-end logistics and supply chain automation software used by international freight forwarders, air and sea cargo shippers, customs brokers, wholesalers, and distributors.
Building on a solid foundation of Sage Intacct accounting, the Miami-based software company has realized these results since deploying Sage Intacct Budgeting and Planning in 2019:
- Improved budgeting efficiency by 60%
- Increased EBITDA margins by 10% in less than 12 months
- Sped delivery of key reports to decision-makers at end of seven-day monthly close
- Adapted to COVID-19 with robust scenario modeling, reducing churn to pre-COVID levels
- Increased operational cash flow
“Sage Intacct Budgeting and Planning has been a game-changer for us,” said Guerra, who joined Magaya in 2015. “We now have an integrated system to create models and forecasts that links tightly with Sage Intacct accounting so we can update financials at the push of a button and do variance analysis.”
‘Tremendously Improved’ Visibility Contributes to 10% Margin Gain
The fast-growing company has dramatically improved visibility with more timely and detailed budget vs. actuals reporting accessible to about 12 budget managers in professional services, customer support, R&D, HR, sales, and other functions.
Instead of monthly spreadsheets that took Guerra’s team 10 days to prepare, budget managers can examine budget vs. actuals via Sage Intacct dashboards that are updated when the monthly books close in just seven days — with deeper detail than was possible before.
“Our budget managers are able to examine data with granularity we didn’t have in the past,” Guerra said. “Previously we had to aggregate a lot of different budget lines into a general line because it would take too much time to create a detailed analysis.”
Those new insights aid Magaya in making swifter, more informed business decisions. For example, marketing has new visibility into its spend vs. revenue to adjust its campaigns, and all departments can better track personnel expenses by base salary as well as bonus or merit pay.
“Visibility across the company has improved tremendously,” Guerra said. “It’s much easier for us to pivot if we need to, because we don’t need to spend time changing the budget, recalculating numbers, and sending spreadsheets to budget managers.”
Better visibility has contributed to a remarkable 10% improvement in EBITDA margins in less than 18 months, even as the company navigated the challenges of COVID-19.
Robust Scenario Modeling Aids in Navigating COVID
Robust scenario modeling capabilities in Sage Intact Budgeting and Planning proved especially valuable when COVID-19 struck in 2020, upending existing forecasts with sudden uncertainty.
Guerra was able to devise four scenarios, ranging from worst case to best, about 50% more efficiently than he could have with Excel, accounting for such possibilities as high churn and reduced cash flow.
“Reforecasting around COVID was great because we could create different scenarios and adjust metrics,” Guerra said. “We imported forecasts to Sage Intacct accounting and tracked them on a weekly basis, and could easily provide them to investors each week.”
After some initial customer churn, Magaya has reduced churn to below pre-COVID levels. It also sustained cash flow during the early phases of the COVID pandemic with the Collections module in the Sage Intacct accounting component.
Automated dunning of delinquent customers spared Magaya’s accounts receivable (AR) staffer from tracking accounts in Excel and manually emailing customers regarding late bills. Overall in its use of Sage Intacct, AR collections capabilities have helped Magaya reduce days sales outstanding (DSO) by roughly half, to 15 days, accelerating overall cash flow each month.
“Our AR person was able to plug notes directly into Sage Intacct, so it was easy for me to predict cash flow in those early COVID months,” Guerra said.
A 60% Boost in Budgeting Efficiency
Magaya is realizing additional benefits by moving to flexible rolling forecasts each month, and using headcount modeling in Sage Intacct Budgeting and Planning to streamline hiring plans based on metrics such as projected new customers.
“It’s very easy to plug new hires into the model and have that additional expense automatically populate into the P&L,” Guerra said. “We can sit down with a budget manager, go over the workload of the current team, and determine a number of new hires based on forecasted metrics.”
Guerra estimates that Magaya is 60% more efficient in budgeting, forecasting, and budget vs. actuals analysis compared to the Excel days.
“Sage Intacct Budgeting and Planning is very intuitive and easy to use, and the training and online videos were very helpful on how to create models and structure reports,” Guerra said. “It’s a very automated process to upload a budget or monthly forecast into Sage Intacct, and to upload actual data from Sage Intacct into the budgeting tool.”
Speeding the Monthly Close from 30 Days to Just Seven
Magaya’s results with Sage Intacct Budgeting and Planning build on its successes with the core Sage Intacct accounting platform, selected over Oracle NetSuite to replace a homegrown solution in 2018.
The SaaS vendor improved accounting efficiency about 75%, while gaining new billing flexibility and streamlining order-to-cash by connecting the Sage Intacct Contracts module with Salesforce Sales Cloud.
Magaya also reduced its monthly close time from about 30 days to just seven, and can more quickly and easily consolidate financials across six business entities. Executive dashboards have elevated insights across the company, while reporting to the board, banks, and investors that took days to complete is now done in hours.
Sage Intacct also helped Magaya quickly bring on board two companies it acquired in 2020, ACELYNK for customs compliance and Catapult for freight rate management, and readies it to accelerate value with additional acquisitions under consideration.
With its combined Sage Intacct solution for accounting and budgeting, Magaya is confident it has the sophisticated cloud financial management it needs for the future.
See our full Magaya success story to learn more about how the software vendor has transformed budgeting and accounting with Sage Intacct.