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AcctTwo Blog

Finance and Accounting Playbook Proactive Planning

The Extend Your Runway series was led and moderated by Marcus Wagner. Marcus is the founder and CEO of AcctTwo, a services and technology company delivering the Future of Finance and Accounting to nearly 1,000 organizations throughout the country.

To recap our last blog, Active Planning is the iterative process of budgeting and re-forecasting based on real-time operational data and market dynamics. It just doesn't end with planning, which is why we actually call it Proactive Planning.

Proactive Planning has three key elements summarized as Visualize, Monitor, and Adjust.


The first step in proactive planning is visualizing where you want to go and what it will take to get there. When climbing a mountain, like Mt. Everest, - which is a lot like starting a business, there are multiple base camps along the way and it is critically important to plan how to get to each one and consider multiple scenarios. For you, these could just as easily be milestones. Take your plans for the year and break them down into key milestones – what will you accomplish in the next month, quarter, and year. 

For example: How much revenue, if any, do you plan to produce. This is not simply a number. Start from the bottom up. What will you sell and to whom? What will each of your subscriptions include? Is your subscription bundled or do you have distinct modules? If you are in a services-based business, how many hours of service will you provide to each customer? You get the idea. Why is this so important? Because with specific targets, you are establishing specific goals and that will drive the behavior to accomplish the goal. You will know exactly what is needed. Details matter!


Unfortunately many organizations end with visualization. They simply do not have the ability to keep up with the actuals. So, not surprisingly the key aspect of Proactive Planning is monitoring your progress in real-time. Not at the end of the month, not at the end of the quarter, but truly in real-time. Each week really matters when it comes to making your goals.

Tip from Marcus: One simple suggestion around this for those using spreadsheets is don’t just have one column for actuals in your spreadsheet – have four or five columns – one for each week of the month. By updating each week, you can become less reactive and more proactive.

If you are a SaaS company, you have probably heard of the Rule of 78. The Rule of 78 is used to plan how much revenue is needed each month to achieve a certain annual target and it really highlights the compounding impact of missed sales targets. If you miss your plan early in the year, the compounding effect makes catching up for the lost revenue very difficult. 

What if you knew early in the month you were falling behind in sales or had an unexpected churn? Because the compounding effect the Rule of 78 highlights, if you know early you are falling behind you might incent a prospect or get a customer to sign up for a new module a month early so you don’t fall too far behind.  

Staying on top of actuals vs your plan is also where things get a little harder. While you can use spreadsheet models to do your planning, they are much less efficient when it comes to updating on a regular basis. The more your business grows, the harder this becomes. 

Look at your business, the current level of activity and what is expected. If you can do what we are recommending here, then there is no reason to change. If you are concerned you won’t be able to scale jump on this as early as possible. It is much harder, disruptive, and costly to try and replace things later.

The key message here is that you want to be in a position to see how your revenue, expenses, and cash are tracking against your goals as close to real time as possible. So that you can adjust, when needed.


You should always be in a position to make adjustments – both financial and operational based on the actuals. As time goes on, we need to make adjustments to our forecast based on revised sales projections, product release dates, days sales outstanding data. The adjustments could be to hire dates, capital investments, when we talk to banks about lines of credit, and frankly all our discretionary spending – does it increase or decrease. The sooner we can respond, that is the more proactive we can be, the more impact it will have.

A good, but painful example, is the impact that COVID 19 is having on many businesses.  If you see some sales pushing, you need to get out ahead of cutting expenses. The sooner you make those decisions, the more cash you conserve, and the longer you extend your runway!

Having implemented a Proactive Planning process has helped AcctTwo immeasurably as it relates to looking at different scenarios related to the current business environment. We started the year with a plan, monitored our progress, and are in a much better position to adjust, when and if needed.

Helpful Tools

Ben Murray has a blog post called The SaaS CFO and has developed financial models for subscription-based businesses that many of you will find helpful. Check out The SaaS CFO here >

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Playbook Overview & Active Planning

About Chris Grady

Chris Grady is AcctTwo's Managing Director. He is passionate about helping SaaS organizations achieve success by transforming Finance & Accounting into a growth enabler & change agent. Be it a cloud-based software solution, or outsourcing performed by AcctTwo's Managed Accounting Services team, Chris is dedicated to our customers' organizational longevity and their full realization of growth & vision. You can email Chris at cgrady@accttwo.com 

Topics: planning business intelligence Planning, Budgeting and Forecasting Startup Guidance