Financial management best practices
Financial management software on Salesforce
The world has changed so much and so quickly. Cloud platforms, mobile technologies, regulatory shifts, economic and political change, the rise of the everything-as-a-service (XaaS) economy, the consumerization of IT - all these trends completely transformed the role of the CFO and the financial operations. The CFO of yesteryear, driven strictly by compliance and financial operations, is rapidly disappearing.
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Today’s most successful CFOs and finance professionals think beyond day-to-day tasks (though still important), going further to expand their business’ footprint and capitalize on the XaaS revolution. You still have to close the books, but you also have to help your organization discover and capitalize on new product innovations and revenue streams, carving a path to customer delight and renewal-based business. Below we highlight some insights and key financial management best practices to help you on this journey.
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FinancialForce financial management
Connect your ERP to your CRM
The Financial Management solutions from FinancialForce unify your front and back office and put the heart of your financial management functions including general ledger, revenue recognition, fixed assets, invoicing, accounts payable and accounts receivable - all on the Salesforce Platform. FinancialForce Financial Management automates your entire opportunity-to-cash process, helps you manage revenue precisely, and delivers the flexibility you need to take on new business models and thrive in the new services economy. Plus it’s easy to implement, straightforward to learn, and trouble-free to maintain.
Turn these financial management best practices into reality with FinancialForce.
1. Go beyond the single product or service
If you are the CFO of a product-based company without services in the mix, this is your must-seize opportunity to expand your business and build recurring revenue. In the XaaS economy, there are limitless paths to growth. The most successful CFOs are mastering the art of developing new revenue streams, constantly looking for ways to turn products into services and services into products, or repackaging existing products and services in creative ways. Imagine selling a wok with a monthly subscription to organic produce delivery and cooking classes, or turning your own internal business review dashboards into something you could sell to your customers. It’s your opportunity to deliver even more value to customers, and extend what used to be a single transaction into an ongoing relationship.
2. Focus on customer experience
The economy’s shift to services and subscription renewals means every business must focus on customer experience. In turn, every CFO must become more engaged in customer satisfaction and retention. Your customers may be only one unpleasant experience away from turning to the competition. To get more serious about customer experience as CFO, you must get closer to every post-sales function of customer onboarding, service delivery, support, and customer success. In addition, you need comprehensive views into the “whole account” with high levels of insight into customer behavior, service quality, and product quality so you can make the smartest decisions to meet their needs.
3. Get predictive about customer data
The cost of acquiring a new customer is typically five times greater than the cost of retaining existing ones. And just a 5% increase in customer retention spend can increase a company’s profitability by up to 95%. To be successful, today’s finance leaders must focus on key customer success metrics: Time-to-value, product adoption rates, project status, usage rates, and service call patterns can all help predict future rates of renewal, churn, and expansion. Additionally, know your customer’s lifetime value (CLV) and corresponding customer acquisition costs (CAC) so you can make immediate business adjustments as needed.
4. Harmonize billing to improve customer retention
Your company’s credibility, which took so long to build during the marketing and sales cycle, can disappear the second a billing error occurs. Manual entry, inflexibility, and lagging payments can turn customer wins into bitter losses. To avoid discrepancies or cumbersome steps that don’t make sense for your customers, ensure that you have flexible billing systems and processes that support your various revenue streams. Offer a seamless billing experience from the time an opportunity closes all the way to billing, payment, renewal, and revenue recognition.
5. Zero in on top-performing products
CFOs should know both what sells and what delivers the highest margin - and why customers turn to your goods and services. You should be able to defend and capitalize on your greatest hits, but also dissect them so their successes can be reproduced throughout the business. If you see your US-based customers expanding globally, perhaps it’s time to localize your software. If you see multiple customers not leveraging one module in your top-selling software package, either start selling training packages to boost engagement or quickly decide that it’s not a market-fit so you can deploy resources elsewhere.
6. Create the master customer record
How do you achieve the whole account view so you can drive customer satisfaction and retention? A truly customer-centric organization will connect all back-office functions and data (ERP) to the front office (CRM) to produce one master customer record. With a single record, you get a single, seamless experience from customer acquisition, quoting, and contracts to internal financial operations and fulfillment. Every conversation, every transaction, every quote, every request, and every documented customer interaction will be accessible from one place. Not only does this empower customer-facing staff to provide immediate, high-quality support, but it also grants financial leaders a wealth of data with which to develop strategic insight into pricing adjustments, contract amendments, and service delivery tracking.
7. Turn compliance into opportunity
From ASC 606 and IFRS 15 to Sarbanes-Oxley to PCI and FSA, regulations are only growing in number and complexity. Some finance teams have worsened matters by using systems that make audits and the reconciliation process a manual, time-consuming nightmare. With the right revenue recognition solution in place, you can gather data for multiple revenue models (e.g. product-based, usage-based, subscription, bundled) in one place to produce clear audit trails, and automate calculations. In turn, that automation frees up your time so you can focus on proactive business value rather than just staying out of trouble.
8. Use the right technology stack
The modern CFO, for both digital and service-centric businesses, needs modern front and back office systems that unify data and can manage any billing model. By connecting ERP and CRM, you can create a single customer database and start automating billing, revenue management, and other core financial processes. It’s the single most powerful way to execute profitably and predictably, earning customers for life.
Your entire department will be working on the same platform and seeing the same “single source of truth” as the rest of the business. Instead of having to “integrate” disparate systems and waiting for days or even weeks for teams to be on the same page, everyone from sellers to accountants can do their work with the same view of critical customer data.