The ability to make sense of your operational and financial data to automate your SaaS KPIs is no longer optional.
One of the most frequent issues faced by SaaS and subscription business leaders emanates from those Excel-based models for tracking SaaS KPIs, metrics, and unit economics. Those methods can lag weeks behind, are frequently manual, error-prone, and leave out the detail for a deep analysis of your CMRR growth levers.
While Excel is a great tool – and admittedly an accountant’s old friend– it’s just not up to handling the complexity analyzing the activity of a scaling company’s subscription base. But now, there's AcctTwo SaaS Intelligence to help you automate your most important SaaS KPIs.
Excel Isn't Always The Best Answer
It's been common for a long time for SaaS and subscription companies to rely on this precarious and treacherous web of spreadsheets to inform leaders as the basis for strategic decision making. All the while, even if those Excel models didn’t fall victim to the typical spreadsheets errors (studies show that ~90% of all spreadsheets contain “significant” errors), they still lacked the ability to provide clarity and expose important insights.
Many companies still operate in the vague swath of concepts like generic “Expansion” and “Contraction” MRR/ARR tracking. Intuitively, they all know that “Expansion”, as a concept, is a short-hand for a variety of subscription activities that result in the increase of a customer’s subscription value such as: Add-ons, Cross-Sells, Upgrades, Upsells, Price Uplift, Foreign Exchange gains on multi-currency subscriptions. Similarly, “Contraction” obfuscates the events that led to a decrease in a customer’s subscription value such as: Downgrades, Downsells, Debooks, Price Markdowns, Foreign Exchange losses.
This lack of insights into the underlying subscription activity that explains gains and losses in recurring revenue is only further exacerbated by leader’s inability to dissect and distinguish this activity by various cohorts. To understand where and how to grow the business, you must be able to determine what’s working and what isn’t. You cannot do this with a broad-brush approach.
If we’ve learned anything in the age of data science, it’s that the details and their segmentation matter. At a minimum, you must be able to analyze your subscription activity by Customer cohort (e.g. by Acquisition Date, by Segment, by Industry Vertical) and by Product Line (e.g. Product Family) to identify where you are experiencing successes or failures in order to determine where best to take actions to accelerate or remediate.
If you can’t immediately answer questions like “how much of our CMRR growth this month was a result of the success of our renewal price increases on our SMB customers using our Business Intelligence product line?” don’t worry, you’re definitely not alone. But then again, do you want to remain among the contingent of leaders that continue to operate in the darkness? At AcctTwo, we want to free you from this Excel curse, and the solution is SaaS Intelligence.
SaaS Intelligence is a fully automated, powerful financial tracking and reporting engine for SaaS and subscription companies. Developed on the Sage Intacct platform, this product enables real-time visibility into SaaS KPIs at a level of granularity that goes undetected and unmeasured by other comparable systems. SaaS Intelligence enables you to answer the questions and discover the insights that lead to predictable growth.
If you're ready to leave Excel behind and clearly see your CMRR growth drivers, use the link below to find a time to talk to AcctTwo about getting started.
The SaaS finance experts at AcctTwo are ready to help you graduate to a cloud-based, real-time, single source of truth and insights. AcctTwo is the reigning 7-time Sage Intacct Partner of the Year, and 4-time Inc. 5000 List winner, and is top-rated by their customers on G2. Contact AcctTwo today to prepare for tomorrow.