A 3-Part Approach to Evolve Strategic Finance

A 3-Part Approach to Evolve Strategic Finance

By Brandon Metcalf June 22, 2021 at 3:41 pm

With over $3 billion invested in just the past 12 months, the corporate performance management software category is on fire. The broad category, which has been around for decades, is sometimes called Financial Planning and Analysis. We are now seeing the emergence of a new generation in the form of strategic finance platforms that offer business alignment, dynamic forecasting and planning, and a holistic financial perspective of the business. 

These new platforms are designed to streamline sales, operational, and financial alignment. They offer capital efficiencies, support faster company growth, and expand overall company value. Our team at Place is thrilled to be part of the new companies emerging to lead the charge, and being recognized for it by our customers, analysts, and investors. 

When Kabe and I decided to build Place, we were fresh off of the recent sale of the last global software company that I co-founded and scaled. A key focus of that software was to create a unified platform that would power the operations of a staffing and recruiting firm from initial sales call to invoice. It was with that mindset that we wanted, with Place, to solve three main challenges that we have always faced with finance.

Aligned Finance & Business 

It has never made sense to me at any of the companies that I’ve worked at or built that just about everything accounting and finance does lives in a bubble, isolated from the rest of the business. Of course, some information needs to remain confidential, but the majority of the financial data is eventually shared back to the business — although it typically takes 4 to 8 weeks after a month has ended. This leads to decisions being made based on outdated data, limited data, or no data at all.

We wanted to turn this problem on its head and solve it. How? By bringing finance into the “business operating system”. We set out to build an easy-to-use finance solution inside of the same environment that the business uses to operate. The operating system that we felt was the game-changer, Salesforce.

When most people hear of Salesforce they think of CRM. This is not surprising considering Salesforce has done a phenomenal job owning that category and was recently ranked #1 CRM provider for the 8th year in a row by International Data Corporation (IDC). If you take a deeper and broader look at what they are doing though, it’s clear that the direction is a complete operating platform, not just CRM.

Salesforce is now openly discussing this strategy and how the various layers of the platform that include Hyperforce, Customer 360, App Ecosystem, and now Slack are the new operating system for success.

Place is part of the App Ecosystem and will leverage all of the other layers to fully integrate finance with the business. We’ve already seen this helping to transform the ways our customers work by driving financially informed decisions in real-time, simplifying and automating revenue cycles, providing better-timed workforce augmentation, effective resource allocations, and better-managed cash flows with a granular view of when revenue is coming from individual clients and expenses should be paid to specific vendors.

A big part of alignment is trust. We feel a key part of trust is communication and transparency. We’ve focused heavily on leveraging Chatter to collaborate throughout the product and are now working on doing the same with Slack.

We’ve also focused on ensuring financial data is available when and where it’s needed. A good example is that sales and service teams can see full financial information about a client on Account records. Another is that marketing teams can combine traditional lead and conversion metrics with financial and budgeting data to gain complete visibility. 

Equally important, finance needs to trust the data they receive from the business. How often has a sales leader shared their sales forecast with finance and finance discounts it because they are not on the same page that those numbers can really be achieved? Bringing those two together to ask questions, see live data, and ultimately get on the same page with what the number should be is game-changing.

Alignment examples:  “Sales creates a new opportunity, perfect, it’s already in the forecast and cash projection”, “Accounting receives payment on an invoice, sweet, I can see that my commission is about to be paid.” These examples can go on and on. The best part, it’s all with live data. 

Agile Forecasting, Planning, and Budgeting

Annual budgets are important for a variety of reasons ranging from compensations and bonuses to shareholder guidance, but the process is time-consuming, frustrating, and dated. It’s certainly good to put a stake on the field to give focus, but it doesn’t always lead to maximizing revenue, profit and cash. It often reminds me of how project management used a rigid and linear methodology called “waterfall” and then how it was revolutionized with a different approach, agile.

Atlassian, a leading software solution for project management and development, defines agile as an iterative approach that helps teams deliver value to their customers faster and with fewer headaches. Instead of betting everything on a “big bang” launch, an agile team delivers work in small, but consumable, increments. Requirements, plans, and results are evaluated continuously so teams have a natural mechanism for responding to change quickly.

Agile has been around in software development and project management for years now and proven to be successful. We thought, what if agile was adopted by finance? What if we gave the business the ability to adapt and make changes quickly? Changes that are supported by actual data on a real-time basis?

We are using this type of approach with PlaceCPM to transform the way companies tackle forecasting, planning, and operating the overall business. We’ve seen firsthand internally at Place from using our product daily, as well as hearing feedback from our customers, that it has led to better decision making, reducing or even eliminating errors, and simplified highly complex planning processes.

Leveraging live transactional level data from accounting, sales, operations, and finance with models that are built specifically for technology and service companies has led to incredible efficiency gains and time savings. It also allows our users to go deeper into analysis and easily see the numbers that are making up the forecasts.

The best part is the business is always adapting to what is happening and the forecast is always current.

A Complete Financial Perspective

The other element we wanted to tackle was to provide a 360° view of the business for future and historical financial information. This is similar to and leverages what Salesforce calls Customer 360. The difference here is we are focused on expanding the 360° view to include your entire business, not just your relationship with your customer. This is critical as it’s oftentimes the most frustrating piece for the executive team and department managers to gain. 

We look at this as having streamlined and configurable processes that ultimately move data through the business lifecycle and leverage that combined data to tell the full story of the company.

Accounting and finance teams spend the majority of their time moving data from one system to the next. I’ve literally heard CFOs call it the “blasted copy/paste process.” Not only is this time-consuming to do, but it creates even more busy-work with having to verify this data was moved correctly and that nothing got transposed or missed.

One of the reasons we decided to focus only on technology and service companies was to really maximize this value for our customers. We not only wanted to leverage the financial models we used for nearly a decade in these categories, but we wanted to create operational efficiencies. Let’s remove as much “copy/paste” as possible and give more time so that instead of spending the month crunching numbers, you can have time to be the strategic advisors the business needs you to be.

One example of this is with our revenue-to-cash models that focus on ensuring compliance with complex revenue recognition rules while at the same time getting invoices sent out to clients. Another example is when it comes to the workforce. We have allocation functionality that allows you to have the solution apply expenses to employees. For example, when you hire a new salesperson, it knows to associate a Salesforce license to them based on their start and end dates. It may sound simple, but forecasting items like this manually is brutal.

Now that the data is accurately going where it needs to go, we can take advantage of drag-and-drop dashboards, easily configurable reports, and a suite of visualization tools to explain the story.

Ongoing Innovation

Leveraging our product to solve challenges is never complete.  We are consistently listening to customers and executing on our vision for strategic finance and business operations. We are excited to announce some great new features that are rolling out over the next several weeks.

  • Multiple Forecasts: Our crown jewel of the next release, we’ve literally spent about a year planning and developing this functionality. You’ll now be able to easily compare to budget and other forecasts to see how the business is doing to one or more plans.
  • Stripe Billing: A big part of our revenue cycle process is to ensure we simplify getting customers billed for subscriptions. Our new Stripe Billing integration takes this to the next level.
  • Deeper Sales Cloud Integration: Clearly Salesforce is a big part of our success and we continue to add a deeper level of integration with Sales Cloud that enables customers to have much more flexibility and control over the integration.
  • ASC 606 Compliance: Anyone who’s managed a SaaS company knows how much time goes into managing revenue recognition according to ASC606. We are now having the solution do the hard work for you.
  • Enhanced Month End Processes: Month-end is always a busy time. We get it and have added even more features to simplify many of the manual processes and variance analysis review for both P&L and cash.
  • Continued ERP Integrations: We are going even deeper with our direct API integrations into NetSuite, Quickbooks Online, and Xero.
  • More Reports & Dashboards: We are taking the many reports and dashboards reports that users have created and pre-packaging them for you.

What’s Next?

The journey for Place has really just started and we are pleased with our progress and the impact we are making. We also know that there is so much more that we want to do. We recently just closed out a funding round to help us to continue getting the message about who we are, what we are trying to do and more importantly sharing the success our customers have achieved. We are also using the funds to continue to push out innovation with the product, and we look forward to all the excitement that comes with that along the way.