How to Keep the Finance Team Lean Through Periods of Explosive Growth
Finance teams are among the most effective business departments because they typically follow clear, precise, repeatable processes. However, as finance teams evolve and their roles become more strategic and forward-looking, the disparity between the best- and worst-performing finance teams is wider than ever. One way SaaS business leaders can ensure that teams remain on task and efficient is to consolidate tasks and keep the finance team lean as the company undergoes rapid growth.
How finance teams have changed in recent years
The most effective finance teams provide all the financial data needed by internal and external stakeholders. Investors rely on financial reports and forecasts to gauge the long-term viability of SaaS companies. Traditionally, finance teams have had purely administrative roles. However, as financial data becomes more important to investors and business leaders, they have become essential partners for business growth.
Unfortunately, this change is not universal. Finance teams have vastly different efficiency standards due to inconsistent technology adoption. This is a byproduct of software vendors developing increasingly niche solutions for administrative and operational teams. Business leaders must focus on consolidating financial processes—and keeping a lean team is an important step in doing so. Here is why it is important to keep finance teams lean during periods of business growth.
The importance of a lean finance team
Developing a data-centric company culture is much more achievable with a lean team
A data-centric culture can help businesses grow sustainably by ensuring that every business decision has a basis in truth. However, building a culture is one of the most challenging things business leaders try to do. Leadership teams must provide employees with the right tools, communicate this culture with them clearly, and ensure buy-in from everyone.
With lean finance teams, it is much easier to develop a culture since teams can come together and discuss their thoughts and concerns as decisions are being made. Once a culture is established, teams can make hiring decisions that are in line with the new culture, making the creation of a data-centric culture a much more achievable and sustainable endeavor.
Lean teams prevent the creation and entrenchment of information silos
Information silos are a challenge that many businesses struggle to overcome. Once information silos are entrenched, they can be extremely difficult to bridge. Recent research has shown that 59% of SaaS business leaders say that lack of visibility is their biggest challenge when managing an SaaS company. Information silos further exacerbate this problem. When key teams are kept lean, it can prevent silos from being created because it is much easier to keep every team member in the loop.
Lean finance teams can focus on functions and activities that generate value for the organization
As teams grow, the administrative processes to manage them grow as well. This can sometimes lead to an excessive emphasis being placed on tasks and processes that fail to generate value for the business. Lean teams are better able to focus on the tasks that will directly impact the business’ bottom line, and eliminate tedious and repetitive tasks. The team’s energy can then be directed towards business-critical activities such as more accurate forecasting, higher-touch budgetary advisory to other operational functions, and working in other ways to strategically improve revenue acquisition and retention efforts.
Tips to keep the finance team lean even during periods of growth
Utilize software to collect, store, and organize business-critical financial data
Finance teams can often go through periods of intense hiring during the growth stages of their business. However, bringing in more people is not the only way teams can deal with an increased workload. Place’s financial management software allows SaaS businesses to automate data processes and simplify previously resource-intensive tasks such as SaaS metrics calculations and reporting, customer subscriptions and revenue management, and billing.
Fully integrated systems also allow business leaders to consolidate important financial data. More than half of SaaS leaders have indicated that finding confidential data within spread-out systems is a major security challenge for them. Fully integrated financial management systems prevent this by creating a single source of truth across the entire organization.
Adopt a culture of continuous improvement and regular process assessments
As finance teams evolve and grow, business processes and tasks will inevitably evolve and also grow. However, this evolution does not have to be limited to the addition of new tasks that increase the workload of finance teams. Teams must adopt a culture that encourages leaders to evaluate the necessity and effectiveness of each business process and eliminate tasks that are not serving the needs of the business. This clarity allows finance teams to effectively manage business tasks without the need for widespread hiring to keep up with increasing customer demand.
Streamline existing financial processes to increase efficiency and quality of financial reporting
Administrative and financial processes are notorious for being time- and resource-intensive. This tends to increase the likelihood of human error due to the tedious nature of the work. However, modern software can help finance teams keep these processes efficient. The first step in ensuring this is consolidating all financial processes on a single platform. This helps businesses keep all financial data in one place and make reporting and other processes significantly easier.
Finance teams have always been a critical part of any organization’s success. In today’s data-driven business environment, finance teams play an important role in the collection, analytics, and distribution of critical business information. This can tempt business leaders to ramp up hiring in that department.
However, lean finance teams are more effective at managing critical business processes. Place’s agile finance platform can help you scale with a lean finance team by simplifying existing financial processes and focusing on value-added processes and functions.
To find out how Place helps SaaS finance teams take an agile, strategic approach while delivering deeper financial visibility to leaders, schedule a demo with us today.