Más contenido relacionado La actualidad más candente (20) Similar a Delivering Value with Financial Performance: Leading FP&A Practices of High-Growth Companies (20) Más de Proformative, Inc. (20) Delivering Value with Financial Performance: Leading FP&A Practices of High-Growth Companies1. Delivering Value
and Financial
Performance Leading FP&A
Practices of High
Growth Companies
Presenters
Eileen Tobias, Sr. Director Financial
Planning & Analysis, NetSuite
Eric Zimmerman, Financial Planning
& Analysis Manager, Infusionsoft
2. Agenda
• FP&A – Challenges Today
• Planning - Business Strategy and Value Creation
• Planning Cycles
• Designing an Effective Process
• Process Overview
• KPI Framework
• How Cloud Helps
• Key Takeaways
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3. NetSuite: World’s #1 Cloud ERP
Background
Performance
Founded 1998
World’s most deployed cloud ERP
Publicly traded on NYSE: “N”
Used by 20,000+ organizations
Offices in 10 countries
Fastest growing top 10 ERP
2,400+ employees
Used across 100+ countries
$414.5M revenue FY13 (34% Growth)
#1 Cloud ERP Suite
Industry Recognition
Best Financial Management
Best Cloud Infrastructure
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Fastest Growing
Top 10 FMS Vendor
3rd Year Running
Top 10 Cloud Companies
to Watch
4. FP&A – Challenges Today*
•
•
Strategic Initiatives – FP&A is increasingly is tasked with contributing to organizational strategy, as well as meeting
demand for operational insights.
•
Getting Insights - data is not translated into information quickly enough to be useful to business units.
•
Single View - information is not sufficiently detailed to be meaningful. A unified view to data and information is
essential to gain visibility to financial and operational performance.
•
Closing and Reporting - takes twice as long for an average company vs. a world-class enterprise.
•
Lacks a Standard Discipline - example standard chart of accounts, common processes, globally mandated
standards, common data definitions etc.
•
Information Gathering Process necessary to generate timely, relevant insights can be extremely challenging.
•
Inefficient Budgeting & Forecasting - iterative processes that frequently yield inaccurate results.
•
4
Confronting Global Change - not fully equipped to analyze and deal with new business risks leading to forecasting and
transaction processing errors.
Internationalization - diverse business structures, assorted systems and processes
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*Rethinking the FP&A Operating Model – FTI Consulting
5. Planning - Business Strategy and Value Creation*
Basic Practice
Progressive Practice
•
Annual plan with no longterm forecast
•
•
Strategic initiatives not
quantified
•
•
Strategic planning is shortterm and reactive to
immediate problems
•
•
Planning is a nuisance:
Business ignores targets,
participation is a necessary
evil to avoid corporate
retribution
•
Finance acts as the steward
for the process to assure
some minimal level of
accuracy amid business
pushback
Process
Characteristics
Business
Integration
Value Finance
Brings
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Benchmark Practice
Annual plan with re-forecast
during year, long-term forecast
independently managed
Strategic initiatives are prioritized
and approved annually, but not
translated into targets
Strategic planning focuses on
improving current operations
•
Long-term forecast integrated with annual
plan, budgets, and revised interim forecasts
•
Strategic plan and strategic initiatives are
core inputs into planning process
•
Strategic planning focuses on realizing a 3-5
year vision that addresses most critical
market and organizational challenges
•
Planning is tolerated: Finance
establishes a plan and everyone
accepts the need to complete an
orderly and accurate process
•
Planning is core: Planning process is critical
to governing business decisions, goal setting,
and performance management
•
Finance strives to be an efficient
process operator to minimize pain
and assure accuracy
•
Finance is a strategic player that uses the
planning process as a catalyst for achieving
performance goals
*Rethinking planning, budgeting and forecasting - A Deloitte perspective
6. Leading Practices in Planning Cycles*
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*Rethinking planning, budgeting and forecasting - A Deloitte perspective
7. Planning, Budgeting and Forecasting - Principles
•
Our Philosophy
•
Fund top line growth while maintaining profitability and generating cash
•
Focused and valued externally on revenue growth
•
Forecast used to manage the business
•
•
•
Robust feedback loop between Finance, Executive team, and business owners
Top-down approach
What do we forecast?
•
•
Rolling eight quarter view updated monthly
•
•
Revenue, Expenses, Deferred Revenue, Operating Cash Flow
P&L forecasts saved as different versions in Financial Planning module
Forecasts that are unique to SaaS companies
•
•
Customer-level revenue forecast by month
•
Churn
•
7
Deferred Revenue
Headcount – expense lever
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8. Planning & Forecasting – Designing an Effective Process
Integrated Planning Capabilities
Forecast Inputs and Outputs
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9. Budgeting and Forecasting Calendar
• Annual planning done Q3 / Q4 for the next fiscal year
• Targets are locked down for operating, quota-setting, and other
compensation purposes
• Completed and reviewed by Board in December
• Final version completed and approved in January
• Rolling forecast updated monthly
• Eight quarter view
• Reviewed with CFO and Executive team
• Each forecast is saved and documented
• Multi-year planning done annually
• Completed each year during Q3 and reviewed with the Board
• Multi-year planning at a software company is used as a framework
for broader strategic discussion on competition, new
markets, verticals, etc.
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10. Customer Level Revenue Forecasting
• Revenue visibility and predictability creates unique forecasting environment
• We typically have a high degree of visibility into next year’s recurring revenue
• Tight ranges for revenue outlook and expectations of a high level of precision
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11. Measuring Actuals vs. Forecast
• Actuals compared against P&L forecast
• Ability to measure against multiple forecast
versions
• Results incorporated into the current
forecast
• Analysis done for Income
Statement, Deferred Revenue, Cash
Flow, and other key metrics
(Bookings, Churn, PS attach rate, Hiring)
• Monthly results and forecast update
reviewed with Business Partners, CFO, and
Executive team
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12. Benchmarking
• We compare our financial performance with other public SaaS companies
• Informs our short-term and long-term target operating models
70%
Revenue YoY Growth
70%
60%
60%
50%
50%
40%
32.6%
Peer group average = 28.3%
40%
30%
30%
20%
20%
10%
10%
0%
12
S&M as % of Revenue (TTM)
0%
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44.6%
Peer group average = 36.6%
13. Analysis and Reporting
• Dashboards
• Management reporting for Executive
and Board reviews
• Predictive analytics
– Sales coverage
– Cohort analysis
• Focus on metrics that matter for our
industry
– New customer acquisitions
– Annual recurring revenue
– Cost of customer acquisition
– Retention
– Lead conversion rates
– Average selling prices
– Sales rep productivity
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14. How FP&A Benefits from the Cloud
• Distributed Team
• Facilitates off-shoring / shared services
• Supports flexible schedules / team in multiple time
zones
• Real time view into centralized data
• Single system, single database
• Browser access, visibility from anywhere
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15. Key Takeaways
Discipline:
• Get into a routine of updating forecasts at regular intervals
• Develop a set of relevant metrics and review with regular frequency
• Use dashboards to monitor real-time results and KPI’s on a regular basis
• Strive to turn most ad hoc requests into recurring analysis
– Typically if a question is asked once, it gets asked again
Flexibility:
• Ensure you have the right team and tools to facilitate fast answers
• Update forecast models for changes in the business
• Make sure mindset is in synch with business environment
– Be ready to switch from cost control mode to investment mode and back
again
• Be open to new ideas and approaches
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16. Agenda
• About Infusionsoft
• FP&A Challenges
• Budget Cycle
• Key Objectives
• Forecast Inputs
• Calendar
• FP&A Lessons Learned
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17. Infusionsoft at a Glance
• Infusionsoft is the leading sales & marketing software for small
businesses, designed to help them get organized, grow sales & save
time.
• 20,000 customers around the globe
• Explosive-growth (+45% annual revenue growth)
• $59M in revenue in 2013
• 60K+ users
• 440 employees
• Headquartered in Chandler, AZ
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18. FP&A Challenges for Infusionsoft
• Culture Change:
Old
NEW
- Annual focus
+ Rolling refresh
- Few involved
+ Cross-functional owners
- Finance mandate
+ Finance partnerships
• Staff Changes: finding, training and motivating the right employees
• Software Changes: moved from Excel based to Cloud based forecasts
• Influence Changes: true business partners to add increased value to the team
• Business Changes: How to account for acquisitions, headcount growth, new
products, and organizational changes
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19. Budget Cycle Key Objectives
“Infusionsoft way” of forecasting -world class & continuous improvement
Improve the forecast relevance iteratively
Create a flexible, unified quarterly cadence to enable timely course
corrections
Investment in upfront process, resulting in back-end time savings
Focus on the right areas at the right time.
Trained focus on sustainable growth
Deliver results. Do what we said we would do.
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20. Budget Cycle- Not all forecast inputs are alike
Economic
Relevance
Variability
Speed of
Impact
Update
Frequency
Revenues
High
High
Weekly
Headcount
High
Low
Medium
Monthly
Events
High
Low
Medium
Quarterly
Advertising/Mar
keting
High
Medium
High
Quarterly
Commissions
High
Medium
High
Quarterly
Capital
High
Medium
Medium
Quarterly
All other
Expenses
20
High
Low
Medium
Medium
Annually
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21. Budget Cycle- High-level Calendar
Quarter
Start Month
Forecast Horizon
Deliverable
Q1
February
Current +3 Qtrs
Review Q1 goal attainment, make updates to
budget if outside guardrails.
Q2
May
Current +6 Qtrs
Review Q1 actual, Q2 goal attainment and First
look into next year. Update current if needed
Q3
August
Current +3 Years
Review 1H performance adjust 2H if needed and
3 Year Long Range Plan
Q4
November
Current +4 Qtrs
Review current Quarter adjust if needed and set
annual budget for next year
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22. FP&A Lessons Learned
• Culture Change:
Cross-functional buy-in: no more “Those are finance’s numbers”
• Staff Changes:
Adding staff is much more fun then cutting staff
• Software Changes:
Better transparency & accuracy through integrated, cloud-based planning tool
• Influence Changes:
Connecting strategy to daily business operations is the essence of planning
• Business Changes:
FP&A processes need to be flexible and allow for the only inevitable of
business….Change.
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24. Thank You For Attending
Delivering Value
and Financial
Performance Leading FP&A
practices of High
Growth Companies
Notas del editor Update with karen’s notes