One of our industry focuses at AcctTwo is the Software and Technology industry, specifically SaaS companies, which have very specific needs around subscription billing, customer relations, recurring revenue, and metrics. We’ve learned over the years that the same need for SaaS business intelligence applies to just about any company that sells goods or services on a subscription basis. Sage Intacct, with its native Salesforce integration, subscription billing, revenue recognition, and contract management capabilities, has shown itself to be the ideal financial management platform for these fast-growing businesses, particularly when QuickBooks and Excel become too unwieldy to manage complex contracts and the metrics needed to run the business and to raise money for growth and expansion.
As AcctTwo began to expand our development capabilities on the Sage Intacct development platform, we found ample opportunities to extend the system to meet the needs of customers who require additional functionality for their particular industry or business model. The SaaS and subscription industry has proved itself a fertile ground for many of these enhancements. Arguably the most impactful of these solutions is AcctTwo’s SaaS Intelligence product, an application that provides access to real-time, automatic, reliable, and insightful SaaS and subscription metrics.
The market reaction to the product has been incredible. Customers and prospects have told us of “snake oil salesmen” selling them metrics that they can’t deliver on. They’ve told us that SaaS Intelligence is the reason they would choose Sage Intacct over other ERPs and financial management systems. They’ve said other solutions on the market only provide 1/10th of the capabilities of SaaS Intelligence. Because of this reaction in the market, we’re excited to be sponsoring the SaaStr Annual conference in September so we can show this amazing solution to as many SaaS companies as we can, as well as their investors.
As we prepare for the conference, we saw a LinkedIn post from Jason Lemkin, serial SaaS founder and the mind behind SaaStr, that really hit home for us. The article is titled, “6 Important Things Founders Get Wrong in Their Core Metrics.” Lemkin’s article can be summarized in the tweet below.
The main theme of his article seems to be around keeping things simple and pure when it comes to reporting metrics to investors. A metric can’t be fudged. Certain customers and data shouldn’t be excluded. Revenue, ARR, and MRR needs to be supported by actual collected revenue, and not some other data that might inflate these metrics. All Churn counts. And the longer you spend massaging the data you report to investors, the less trust they will have in those reports.
SaaS Intelligence as a Trusted Source of the Truth
This article reminded us of a conversation we had with one of our own SaaS Intelligence customers, the controller of a growing technology business that has begun to convert its on-premises products to cloud products and is moving quickly from a perpetual license model to a subscription model. The company chose Sage Intacct over NetSuite as its financial management system, but they were still forced to use spreadsheets to manage their SaaS metrics. The use of spreadsheets meant that it was too easy to make manual interventions, judgement calls, and even mistakes, making it difficult to trust the data and even more difficult to surface insights about the business. Trailing Twelve Month and trend analysis is also hard to come by in Excel.
After implementing SaaS Intelligence on top of Sage Intacct, the system has provided the business with a single source of truth, allowing them to compare the results of their previous reporting processes with what the system tells them. The application automatically identifies different SaaS metrics scenarios to provide an accurate representation of customer subscription activity and the impact on ARR or CMRR. The application’s intelligent engine can distinguish between different factors driving changes in CMRR, removing the need for manual intervention or additional analysis of transactions. This surfaced places where they weren’t capturing data properly. It showed faulty assumptions they’d made in the past. And it allowed the finance team to bring insights to the Executive Team and to investors, spurring conversations about where to focus the company’s efforts.
AcctTwo’s mission is to help finance and accounting teams become a strategic asset to the business, and it’s been incredibly rewarding to see our SaaS Intelligence product do that for SaaS and subscription companies. We’re glad to see that we’re solving for problems that Jason Lemkin and the SaaStr team have identified as critical. And we look forward to having those conversations with them and others at SaaStr Annual in a few weeks.