Benefits of Automating Your Key SaaS Metrics: Insights You Can Act On
Monitoring your metrics isn’t enough. The key SaaS metrics you measure must be actionable to help you move the needle on healthy CMRR and ARR growth. This requires granularity and immediacy of information you can’t get from QuickBooks or Excel spreadsheets at scale. Your ability to keep a pulse on customer trends, as they are happening in real-time, and then respond quickly, enables you to transition from the historian to the pioneer – guiding the business into the future.
The Old Ways Are Holding You Back
If you’re like most SaaS and subscription finance leaders, you’re ready to chuck those Excel-based methods currently being used for tracking your growth metrics, unit economics, and other key performance indicators (KPIs). Those legacy processes can lag weeks behind, tend to be entirely manual, and lack the ability to clearly display your growth levers.
What’s worse is studies show that nearly 90% of all spreadsheets contain “significant” errors. Using Excel as your “database” for SaaS metrics tracking can lead to errant business decisions based on erroneous data, or confidence loss and subsequent valuation hit from investors during due diligence.
You may be like many other SaaS and subscription leaders still settling for generic “Expansion” and “Contraction” CMRR/ARR tracking. Intuitively, we all know that “Expansion”, as a concept, comprises many subscription activities that result in the increase of a customer’s subscription value such as: Add-ons, Cross-Sells, Upgrades, Upsells, Price Uplift, and Foreign Exchange gains on multi-currency subscriptions. Similarly, generic tracking of “Contraction” obfuscates the events that led to a decrease in a customer’s subscription value such as: Downgrades, Downsells, Debooks, Price Markdowns, and Foreign Exchange losses.
Undoubtedly, having access to these granular levels of subscription activity categories would bolster your ability to validate your intuitions with substantive data, and enable you to discover trends that had constantly evaded your detection. However, you know full well that attempting to track these various types of subscription activities in Excel would be exercise in futility.
Immediately Answer Critical Questions
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?” it’s because you’re hampered by your manual, business intelligence toolset. With an automated SaaS metrics dashboard, you can finally break free from your Excel prison and quickly answer these kinds of critical questions.
One such solution is SaaS Intelligence from AcctTwo, a fully automated, financial tracking and reporting engine for SaaS and subscription companies built on Sage Intacct. SaaS Intelligence gives you real-time visibility into your SaaS KPIs at a level of granularity that goes undetected and unmeasured by Excel or comparable systems.
Your SaaS KPI tracking will be completely seamless, including automatic tracking and bucketizing of your crucial SaaS metrics by interpreting transactions in real-time as they post. SaaS Intelligence analyzes the activity and automatically categorizes the CMRR into the appropriate classification without requiring any involvement by you.
SaaS Intelligence leverages a holistic, customer-view approach, analyzing subscription data across both the Sage Intacct Contracts and Order Entry modules simultaneously. This means that you get the flexibility to support a variety of sales models, from high-touch account executive lead sales, to ecommerce, to product-led growth. By interweaving order and contract data across the system, SaaS Intelligence gives you comprehensive answers to critical questions and highlights the insights that lead to predictable, sustainable growth in just a few clicks, not a few weeks.
Watch a SaaS Intelligence demo video. Click here.
No More Inflated Churn
Churn is an incredibly important and highly visible metric that drives a lot of your activities, so it's important to get it right. The last thing you want to do is inflate Churn and have the business in a frenzy. In mid-market and enterprise sales it’s common to see delays in customer renewals as your Customer Success team navigates their way through the maze of your customers’ organizational bureaucracies and procurement red-tape.
SaaS Intelligence was designed from the ground up to provide the flexibility needed to isolate these instances, but not immediately treat them as churn. Instead, the late renewal status of customers is made apparent to your business by tracking past-due renewals in a “Pending Renewal CMRR” category, allowing you to keep a pulse on potential churn, but without forcing that decision prematurely. In this way, the business can appropriately and proactively address late renewals or customer churn risks.
And if the customer is ultimately lost, the system allows for custom categorization via Churn Reasons (e.g. Customer Satisfaction, Acquired, Bankruptcy, etc.), which can be segregated into Avoidable or Unavoidable Churn for enhanced analysis. Not every churn event is the same, and certainly shouldn’t be treated as such!
And what of those customers that failed to launch and were never revenue generating? SaaS Intelligence enables you to Cancel (not Churn) those customers to more clearly distinguish and segregate the cohort of customers lost, but were never fully onboarded in the first place. You have the flexibility to decide how that type of customer situation is treated and reflected in your SaaS metrics.
Clearly See Your CMRR Growth Levers
To grow effectively and efficiently, you must be able to determine what’s working and what isn’t. Attempting to perform this level of analysis using a broad-brush approach is doomed to fail. Critical insights and business intelligence reside in your ability to uncover trends residing deep within various segmentations of customers and their interactions with your products and services. In order to determine where best to take actions to accelerate or remediate, you must identify where you are experiencing successes or failures. If you're ready to leave Excel behind and clearly see your CMRR levers to accelerate growth or stem loss, click here to watch a full product demo video of SaaS Intelligence.
Chris Price is the Head of SaaS Vertical at AcctTwo. AcctTwo is focused on delivering the future of finance and accounting to our customers with three main solutions – Cloud-based Accounting Software, Managed Accounting Services, and Sage Intacct Customization, all built around Sage Intacct’s best-in-class financial applications. Our dedicated team of over 100 people has helped more than 1,000 organizations optimize finance and accounting through software implementations, accounting outsourcing, and consulting specializing in the SaaS, Nonprofit, and Energy Industries. AcctTwo has been recognized by Sage Intacct as its Partner of the Year seven years running, from 2014 – 2020, and by our customers as a leader in overall satisfaction and popularity through their reviews on G2.
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