1. Integrate Systems for Quote-To-Cash
As you scale sales to prove your revenue model, it’s crucial to remove friction points from the sales process and maintain a single version of the truth. Natively connecting your CRM and your configure, price, quote (CPQ) process to your financials provides several benefits:
- Streamlines initial sales, renewals, and add-on business
- Provides common metrics on CLTV, customer acquisition cost (CAC), and churn for both sales and finance
- Removes billing obstacles, bringing cash into the business sooner
2. Establish Flexible, Contract-Based Billing
As you grow, you may need to expand your offerings to attract new customers, increase your average sales price, and retain existing customers. The ability to handle different types of revenue streams and billing provides more flexibility to innovate and maximize CLTV.
Consider supporting these billing models:
- Perpetual: License, Maintenance, Support
- SaaS: Subscription
- Usage: Usage pricing, Tiered pricing, Price per thousand, Minimum flat fees, Included units, Overages, Customer specific
- Services: Hours, Time and materials, Fixed price
3. Build End-to-End Revenue Management
As your revenues grow, financial audits become crucial for credibility. Your financials need to be GAAP, ASC 606, and IFRS 15 compliant. A solution designed for recurring revenue rather than individually placed orders will:
- Automate compliance, especially revenue recognition and expense amortization.
- Save time and decrease the risk of errors.
- Gain visibility into unbilled, billed, and paid revenues.
4. Create Real-time GAAP and SaaS Dashboards
Understanding both GAAP and SaaS metrics is critical to your business. GAAP metrics show where you’ve been and where you are now, while SaaS metrics indicate where the business is going. Connecting your contractual obligations to billing, revenue management, and the general ledger can automate the creation of these metrics, providing:
- On-demand visibility for immediate and strategic decision-making.
- Faster action compared to your competition.
- A holistic view of your GAAP and SaaS performance.
5. Forecast and Plan the Future
Accurate forecasts are essential for guiding decisions on hiring, product investment, and more. They’re also required for business loans or investor funding. When you’re connected across CRM, CPQ, and financials through a contract, you can:
- Automatically generate forecasts.
- Get a single view of your customers across billing, revenue recognition, and cash.
- Shift from manually reporting the past to real-time forecasting for the future.
By implementing these five steps, you’ll be well-positioned to prove your recurring revenue model and drive your company’s growth to the next stage. Let LBMC W Squared and Sage Intacct help you achieve your goals. Contact us today at https://www.lbmc.com/w-squared/.
Written in partnership with Sage Intacct
