To Help Your SaaS Company Thrive in 2021, Improve These Financial Processes

To Help Your SaaS Company Thrive in 2021, Improve These Financial Processes

February 09, 2021

COVID-19 propelled a digital technology surge in 2020 as companies responded to employees working remotely, families sheltering in place and customers needing to purchase and communicate online versus in-person. Many businesses turned to software-as-a-service (SaaS) providers to help with business continuity strategies, which has created a competitive environment for SaaS organizations.

As the pandemic continues to bring uncertainty about what lies ahead, SaaS companies should be adapting for a volatile new normal. The place to start is by looking for ways to automate for efficiency, updating technology that prevents business leaders from making quick decisions, and empowering your teams with real-time information across multiple departments.

Here are some areas to focus on to help keep your SaaS business thriving through 2021 and beyond.

Revising Budgets on the Fly

Ensuring that budgets reflect reality could be a challenge for the foreseeable future. For your organization to endure and flourish, it should be nimble and ready to react to shifts in the market. In today’s constantly changing conditions, a SaaS company needs to be able to revise its budget for the variances. Making these adjustments can be a timely and labor-intensive process. It could become an ongoing one, too, as continued economic uncertainty makes revenue forecasts unpredictable.

Reporting on Financial Impacts – Do You Have the Right Metrics?

SaaS companies need to examine the specific financial impacts of the pandemic to make quick and accurate decisions. For example, you need to understand if keeping customers means delaying price hikes or modifying contracts, and those changes need to be recorded and reported on. Critical metrics for a SaaS organization include customer acquisition cost (CAC), customer lifetime value (CLTV), customer monthly recurring revenue (CMRR), gross churn and customer churn.

Cloud-based ERP solutions built for SaaS companies can help you track subscription revenue and other key data. For example, a solution like Sage Intacct lets you tag unlimited dimensions on your journal entries to provide the calculations for real-time SaaS dashboards to track these important metrics.

Improving Cash Flow Processes

Whether you’re a small or large business, cash is still king! Many companies struggle with managing a cash flow process, but the rewards can be phenomenal when done correctly. Here are some areas to review to improve your cash flow process:

  • Rethink billing and timesheets – Consider billing more frequently and automating the collections process.
  • Adjust payment terms/AR – Consider setting up early payment discounts and charging interest and penalties for not paying on time.
  • Review accounts payable – Are you getting early payment terms from your vendors? Consider updating and/or revisiting your vendor and supplier relationships.
  • Maximize opportunities for recurring revenue – This allows for more reliable and predictable revenue sources, especially when it’s automatic.

Increasing Customer Loyalty and Satisfaction

SaaS companies are one of those business models that require high customer satisfaction and streamlined processes at the forefront of their business strategies to be at the top of their game. Accurate and efficient processes are critical for achieving satisfied customers and generating loyalty within that customer base. This includes expediting the sales process with automated configuration by interconnecting all departments in the company. This automated process is referred to as configure, price and quote (CPQ).

When CPQ software is implemented correctly in your organization, the product you deliver becomes more solution-oriented and customer-centric. This not only aligns the sales team on quotes and pricing, it also empowers other teams with the ability to provide real-time solutions. As a result, you can increase your revenue by saving time in the sales process, limiting your product discounts and offering a variety of options when discussing a customer’s needs.

By improving these fundamental financial processes, you’ll equip your business to stay on top of its game through a turbulent 2021 and beyond.

To learn more about making sure your SaaS company has the right processes, tools and resources to be successful, contact our experts or visit our COVID-19 resources center.

February 09, 2021

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