10 New Year's Resolutions for Your SaaS Business
It’s time for the inevitable onset of one of society’s greatest initiatives: New Year’s Resolutions. Whether you’re a “journal in December and forget by the ball drop,” a “solid until January 17th,” or a “going strong through most of the year” type of resolutionist, we’re rooting for you!
We’ve put together a few sustainable ways to help your business have its best year yet. Don’t worry—we’ve given you resources for each to make it easy to follow through. It’s the intent that counts, so whether you complete all of them or zero, any time spent thinking about the following items is already a step in the right direction.
We promise…this won’t be you in 2022!
Create a budget and monitor performance throughout the year.
No 2 budgets are made equal. Gone are the days of guessing on numbers only for them not to serve you! Here’s how to build a useful budget, based on your own data, to confidently justify spend, headcount, etc.
Keep your house clean.
Or, you know, whatever houses your financial data. Clean up your CoA-and accurately track every dollar.
You don’t need deep finance knowledge to set up a Chart of Accounts that is built on the SaaS business model. Why? Because we’ve already done it for you! Use this template to accurately categorize your spend and upload directly into QBO to start preparing a functional P&L, calculate important metrics, and more.
Take a moment and reflect on your accomplishments.
How can you know what your company has achieved so far? The key to proving your growth lies in your functional income statement; using this data can show how certain expenses have directly contributed to an increase in revenue. This is a great story to be able to tell to investors: you know how to use your money wisely!
Make more money.
Make a list. Check it twice. er…wrong holiday. Regardless of which day it is, we’re giving you the gift (there we go again) of a comprehensive fundraising checklist. Made for you by our team of finance experts to help you in your next raise, this list will help you answer preliminary questions, assemble pertinent data and metrics, and formulate the best story to share with investors.
Prioritize what’s most important to you.
There is no shortage of metrics out there; it can be daunting to know which ones are the best for your specific business. A single Google search can give you several different answers. We like to say there’s not one “Golden Metric”; rather, we think it’s important to understand the types of metrics and which piece of the story they tell so that you can use them to answer your biggest questions. We shared with our friends at Launchways to come up with a First-Time CFO’s Guide to the Top Metrics that Matter Most.
Learn and grow from your mistakes.
It’s okay. We’ve all been there. Take time to read up on top 4 mistakes SaaS companies make.
TL;DR:Condensed P&L Statements
Clumped Payroll Accounts
Non-compliance with GAAP Regulations
Monthly Contracts
Don’t worry, we’ve included the solutions!
Spend more time with friends. Better understand who they are.
If you haven’t already, 2022 is the year to perform a Cohort Analysis. Customer Experience is becoming more and more important, and a Cohort Analysis can give you intel not only about how to best provide and understand your customers, but also acquire more of them in the most efficient way. (Read: lower churn, higher retention and upsells, better LTV:CAC.)
Learn a new language.
Understand the difference between bookings and GAAP revenue recognition.
GAAP revenue recognition for many seems like a foreign language. It can feel like the words “cash” or “revenue” hold a different meaning than what you previously thought! Here’s how to tell the difference between bookings, billings, and revenue to make sure you’re accurately reporting and following the rules.
Get in touch with your creative side; perfect the art of storytelling with data.
To most, the term “financial data” does not necessarily strike up the most…poetic illustration. We beg to differ! Your data holds the secret to telling the compelling narrative of your business. Without LTV:CAC, how else would you be able to convince anyone how sustainable your company is? When you understand your past performance, you know how to repeat (or move away from) certain processes to make better, more informed decisions. This is a topic we’re pretty passionate about, so we began a series, “Finance: Storytelling with Data”.
Exercise. Run with the benefits the SaaS model gives you.
Knowing exactly why the SaaS business model is unique can inform you exactly how to use it to your advantage. Stand out from the crowd by capitalizing on the opportunities presented within its specific Sales and Marketing team structure, recurring revenue function, and more.
Cheers to you (and your company’s) best year yet! What are your resolutions this coming year?
Need help tackling this list? Chat with someone from our team, no strings attached.