Why We Started KPI Sense
SaaS, or Software-as-a-Service, has been part of my life for a vast majority of my professional career. At first, it was something I approached with high level of reluctance.
“This stuff is really hard” was the first phrase I muttered to myself as I tried to build my very first SaaS financial model over six years ago. After spending three years in investment banking, I thought I was a master of my own domain when it came to financial modeling and financial analysis. That initial arrogance was short-lived as I found myself staring down at an excel file for an up-and-coming start-up that had just closed their $1 million seed round and was looking to build a much more robust financial and operating model.
For starters, taking Annual Contract Value (ACV) bookings and converting that to revenue in a financial model is much easier conceptually than it is in practice. Yes, if a customer pays you $12,000 upfront for a 1-year deal, you may say, “Hey Will, that’s really easy, you just recognize $1k of revenue in month one and then recognize the rest over the course of the year.” You would be 100% correct in that example. Now imagine having 300 customers who have contract start dates at all different points in a given year, with 30% being invoiced monthly, 40% being invoiced quarterly and 30% being invoiced annually. If you already have a headache, you aren’t alone. This is the exact state I was in when I was building that model back in 2013. Don’t even get me started on the metrics at this point. Annual Recurring Revenue? Net Revenue Retention? Magic Number??? I felt like I was on a different planet that day.
Fast forward to now. With hundreds of KPI dashboards and financial models under our belt, we have gone through dozens of iterations to our tech-enabled process so you don’t have to learn on the fly. We automate and aggregate all your data sources, create KPI dashboards, and build modeling and financial reporting solutions. We’ve helped our clients raise over $200M in capital from some of the top investors out there. We’re unique because we combine tech-enabled delivery with expert advisory at one low monthly cost. We’re not going to hand you a pile of numbers, we’re going to help you use them to grow your business. Our pricing is transparent and takes the pain and discomfort out of the traditionally cumbersome “hourly billing paradox” that financial services providers utilize. Mediocre (and potentially sub-par) performers can run more hours and dollars out of clients versus someone who streamlines processes and adds more strategic value (at the expense of billing future hours).
We started KPI Sense to help fix the SaaS Finance function, which we firmly believe is fundamentally broken. On the 60+ engagements I have worked on within SaaS (and legacy software businesses) in my career, I counted my blessing if the client had a controller as the most senior financial position within their business. Most were utilizing an outsourced CFO and/or an outsourced bookkeeper. For these companies, their concept of finance was getting A/R and A/P taken care of, making payroll and closing the books at the end of the month. If they had a financial model and/or a KPI dashboard, it was typically because an investor had asked them to build it or they were trying to woo investors for a future fundraising round.
All of this boils down to a simple question - Is your finance function strategic? If the answer is no, or maybe, or anything other than a RESOUNDING yes, please give us a shout. Our goal is to make your life easier at the end of the day. Having access to best-in-class KPI dashboards, forecasting cash flow accurately, projecting deferred revenue precisely and utilizing a truly functional P&L are things every SaaS business should be able to enjoy. Let us help you put your best foot forward on your next management call, in your next board meeting or during your next investor call.