Technology adoption in today’s world has rapidly evolved from being a “nice-to-have” to becoming a “must-have” for finance teams at successful SaaS organizations. Great CFOs and Controllers, like Michael Chernoff, 2020 Controller of the year by the controller council, understand that implementing the right FinOps tech stack is key to achieving business growth, increasing efficiency and optimizing processes such as frictionless recurring billing, and automated ASC 606 revenue recognition.
Think about your FinOps tech stack like a football team. If you are like me (and know very little about football), you probably know at least this much – a football team requires synergy across all team members with everyone pulling their weight for the best chance to meet their goal – a Championship. Similarly, in the world of finance, having the right financial system and automations in place could save you time, money and yield a much higher return on your investment. That’s the goal, isn’t it?
As you consider what the best-in-class FinOps tech stack means for your business, start by thinking through these 3 important questions:
1. What problems are you trying to solve?
An ineffective FinOps tech stack is a nightmare to any finance leader and could play out in so many different ways. For instance, your existing system may need more integrations which sometimes mean more time is being spent on manual processes leading to a delayed financial close. Another scenario could be the case of having multiple systems of record resulting in inaccurate financial reports that could lead to poor business decisions.
In a recent chat with Controller Councils 2020 Controller of the Year, Michael Chernoff, we deep dive into some of the manual accounting and reporting challenges he faces as a controller and explore how switching to the most complete Fin Ops tech stack helped him achieve faster order to invoice, improved cash flow, and reliable reporting to drive better decision making for the executive team.
Regardless of the unique challenges you may be experiencing, identifying the problem is always the first step to fixing it.
2. Which processes do you need to streamline?
When building your tech stack, consider the most manual and time-consuming operations that can benefit the most from streamlined processes and increased automations. More often than not, these manual operations initially fall within the billing, revenue, accounts payable, and accounts receivable teams. We have seen organizations with the right systems and automations in place, reduce their close from 14 days down to 5 days, replace manual order entry with automated invoicing to process over 500 invoices/month, calculate ASC606/IFRS 15 revenue recognition at the push of a button, and increase operating cash flow by up to $1M.
3. What impact are you hoping to achieve?
As your business continues to grow, having real time visibility of the finances becomes critical to scaling effectively. Forward thinking finance teams are constantly looking for ways to increase efficiency, grow profit margins, optimize customer acquisition costs and overcome the complexities that arise from a rapidly growing customer base and the need for real-time metrics. By setting clear goals for your FinOps tech stack, you are able to make better and more informed decisions that set you up for success.
Follow the 6 Cs of SaaS Finance by one of the top SaaS/Cloud investors in the world, Bessemer Venture Partners, on what to manage against as you grow your business.
Build your ideal tech stack today. Visit SageIntacct.com/EasyClimb to get started. Want to know where you stand currently?
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