Key Financial Metrics and Strategies for Finance Leaders

Critical Metrics to Help Finance Teams Advance as Strategic Partners

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Are the metrics that you are currently tracking truly reflective of your overall business performance?

If you’re looking to get your finance transformation off the ground—it’s time to use data and analytics more effectively. Improving access to data will enable finance teams to speed up time-to-insight and empower the business to become more responsive in the face of uncertainty.

In this webinar, we take on the much-talked-about topic of the key metrics that finance teams need to be tracking.

We have Caitlin Haberberger, CFO at Mezmo, sharing first-hand information on how finance teams are already tapping into the immense benefits of tracking the right metrics.

Caitlin discusses strategies for finance leaders at all levels, to architect change for 360° value. That’s not all — you will also come across some rich insights on effective communication, building trust, and influencing business decisions. 

In short, we cover:

• How do you leverage financial metrics at different stages of your business lifecycle — from pre-product-market fit to publicly traded companies?
• How can businesses harness the strength of collaboration to guarantee data accuracy and consistency across teams?
• When is the right time to invest in a specialized tool to streamline workflows and free up valuable resources?
• What skills are essential for translating financial data into clear, actionable insights for CEOs, boards, and other teams?
• How do business maturity and scalability impact your decision to adopt new technology for data management?
• Success Paradigm for CFOs in 2024 and Beyond: As CFOs face an extraordinary number of decisions to make on compressed timelines, we also talk about how they can accelerate strategic decision-making, unlock greater shareholder value, and drive sweeping enterprise reinvention.

Speakers: 

 Caitlin Haberberger, CFO at Mezmo

• Two decades of experience in leading finance functions at renowned tech companies
• Previously worked with Amplitude, Turnitin, Flite, and Clever Inc.

Hosted by:

‍Apurv Bansal, Founder of Zenskar

Webinar Summary

1. How can finance professionals contribute to leadership within a company?

Listening and asking good questions are fundamental. Successful finance professionals immerse themselves in the organization to understand how each function operates. For example, partnering closely with infrastructure engineers allows a finance leader to understand cost drivers, such as AWS, and provide insightful business advice. By being the "go-to" person, you gain the ability to make connections others might miss. This leadership comes from understanding the whole business and offering solutions that span departments.

2. What role does curiosity play in a finance career?

Curiosity is essential. For junior or mid-level finance professionals, learning about other parts of the business is crucial. If you're analyzing the numbers and notice trends like deteriorating margins, ask why. This curiosity helps you uncover insights that aren't immediately obvious. It also allows you to understand the broader business challenges, making you a more effective business partner. Engaging with product teams, sales, or marketing teams helps you ask the right questions and provide meaningful insights.

3. How has the Chief Financial Officer's role evolved in modern Software-as-a-Service businesses?

The Chief Financial Officer’s role is evolving into that of a data steward and decision-making influencer. Instead of just managing financial projections, Chief Financial Officers must understand all data sources and their interconnections. For instance, when considering expansion into Europe, a Chief Financial Officer doesn’t just evaluate financial data but also questions market demand, data privacy laws, and operational risks. This broader perspective allows Chief Financial Officers to impact business strategy, mitigate risks, and guide teams to make informed decisions.

4. What financial metrics should Chief Financial Officers focus on in Software-as-a-Service companies?

Traditional metrics like annual recurring revenue growth are essential, but as companies mature, Chief Financial Officers should focus on customer acquisition cost, churn rates, and margin improvements. For example, reducing data storage costs with engineering collaboration can significantly improve margins. At one company, Chief Financial Officers worked closely with engineers to lower costs, which resulted in better margins—a team victory that was celebrated as part of company culture.

5. What are the key metrics that change as a Software-as-a-Service business matures?

Early in the lifecycle, the focus is on customer acquisition and learning from the first few deals, with less concern for efficiency. As the business matures, Chief Financial Officers need to track customer acquisition cost closely and measure the effectiveness of sales representatives. When moving from pre-product market fit to post-product market fit, it's crucial to focus on metrics like sales productivity and the cost of customer acquisition to ensure sustainable growth.

6. How do you communicate complex financial data to the Chief Executive Officer and the board?

Start by defining clear metrics and maintaining data integrity across the company. Chief Financial Officers should present key metrics that provide insights into the company’s overall health—things like cash runway, customer growth, and churn. For example, during board meetings, it’s crucial to present the metrics that align with the company’s strategic goals and highlight trends that indicate whether the business is on track or off track.

7. How do you ensure that finance data is communicated effectively to all teams?

While the finance team presents high-level metrics, other departments should have access to relevant data tailored to their needs. Sales might focus on sales productivity, while customer success might prioritize retention and lifetime value. It’s important that every department pulls from the same data set, ensuring consistency and clarity. Additionally, Chief Financial Officers should engage with other teams to provide their perspective and align on what metrics matter most.

8. What separates ordinary finance teams from exceptional ones?

Exceptional finance teams are connected to the business, communicate effectively, and are creative in solving problems. They look beyond just financial metrics and engage with teams to understand business needs. For instance, a creative finance team may find a way to structure customer contracts to benefit both the customer and the business, even when initially it seemed impossible.

9. Can you provide an example where creativity helped solve a financial challenge?

A memorable example was when a customer requested a contract structure that didn’t fit the standard process. Initially, the answer was "no," but through creativity, the finance team found a way to make it work while maintaining a revenue recognition system. This flexibility helped retain the customer without compromising the integrity of the process.

10. How do you handle disconnects between finance and other departments?

To resolve disconnects, the first step is agreeing on a single source of truth for data. For example, if there’s a discrepancy between product usage metrics in different systems, it’s crucial to document and align the teams on how data is pulled and transformed. Ensuring communication is key; understanding other teams’ workflows and speaking their language helps bridge gaps and resolve issues efficiently.

11. What are the top cost-cutting measures you have enforced during a market downturn?

Software costs are one of the first areas to review. Businesses often accumulate multiple tools with overlapping functionalities. By scrutinizing return on investment and clear use cases for each tool, Chief Financial Officers can cut unnecessary expenses. Additionally, evaluating the cost of goods sold and data engineering efforts can unlock savings. This proactive approach helps navigate a downturn while ensuring financial health.

12. When is the right time to adopt specialized tools for financial metrics analysis?

Timing is crucial when adopting new tools. Too early, and you risk overcommitting to a tool before your business needs are stable. Too late, and the cost of transitioning becomes higher. A good rule of thumb is when you realize that the data you're manually handling or managing with spreadsheets is no longer scalable. Look for flexibility in the tool to grow with your business needs. It's important to ensure the tool aligns with your evolving business model.