10 Financial Operations Predictions for Small and Mid-size SaaS CFOs and Controllers

A great thing about seeing a big white 2 replace the big white 1 following 202, is of course the prospect of a new year and all that it entails, from closing the books on last year’s financials, to planning and re-planning budgets and forecasts with a large dose of optimism and perhaps a dash of inflationary uncertainty.

Additionally, industry outlooks and predictions lists start to pop up and can either bring a smile to your face or drive a tingling of nervousness.

Enjoy this list of predictions from a handful of our best-in-class partners and discover several peak-into-the-future views authored by VCs, analysts, and financial leaders from across the Web for a multi-faceted view of what’s to come in 2022.

1. Consolidation of Credit Cards

“The days are over when specific credit cards were allocated depending on the department, the end-user, or the purchasing type. The once-specific cards for T & E, executives, department purchases, and one-off transactions, each managed by a different issuing card provider, are giving way to one card program for them all. Further, modern cards are software-enabled, which means that the workflows by which transactions are approved, captured, reconciled, and booked can be automated. 2022 will be the year of one software-enabled card program for all use cases, while having one platform for all end-users to interact with and manage these transactions within.”

–Dan DeVall, VP of Business Development at Airbase

2. Orchestration Between AR & AP Will Be a Growing Focus

“Managing revenue collection and supplier purchasing have historically been viewed as distinctly separate activities and workflows, but increasingly businesses are recognising the benefits when they operate synergistically. It’s been a tug of war between these two departments that have opposite incentives; collect money owed faster or delay payments due slower. The days of this thinking are behind us, and now we must operate collaboratively to understand the value of each dollar within the network. The give-and-take relationship between AR and AP is now possible and quantifiable. The sooner buyers and suppliers learn to harmonise and articulate the value created between each other, the sooner both departments may gain efficiencies and optimise their KPIs.”

–Dan DeVall, VP of Business Development at Airbase

3. The Recovery Path Leads to IPO

“Many companies are well along on their journeys to recovery after the pandemic turned the economy upside down. More funding is being introduced into the market, and investors are looking for new, exciting ventures to support. In fact, the market capitalisation of venture-capital-backed firms that went public last year amounted to a record $200B and it is on course to reach $500B by the end of this year. With capital available to businesses, finance teams will begin to prepare for IPOs – and we will see a wave of public companies emerging as we recover from the economic downturn.

As a result, rather than navigating unknown territories in search of recovery, companies will be navigating the exciting pathway to IPO and seeking solutions to inform the nuanced strategy required for such a huge milestone — especially from an accounting perspective.

It’s easy to overlook the back-office work that needs to take place before an IPO — because it’s not nearly as cool as ringing the bell — and that leaves businesses vulnerable. Whether it’s instituting complex internal controls to support SOX compliance, instituting a formalised financial reporting process, or ensuring a scalable effort for ensuring audit readiness — both pre- and post-IPO — accounting teams will have a lot on their plates. Chances are, many companies making the decision to go public don’t have the experience or skill sets to go public and they’re facing a tough market for hiring that talent.

Technology is the common thread impacting a company’s ability to prepare for an IPO and successfully meet the demands of being a public company. At the end of the day, the IPO event itself is a small component — it’s what comes after you ring that bell that really matters. From reporting to FP&A to cybersecurity, companies will double down on technology resources to be efficient, run the business, give their accountants more time back, and not blow up once they’re required to meet the demands of public company reporting.”

–Mike Whitmire, Co-founder and CEO, FloQast

4. State Governments Have Lots of Money and Will Use that Money to Reduce Taxes.

“They will focus on personal and corporate incomes taxes.  Politicians from several states want to repeal both of those taxes. Doing so requires an immense amount of money and a repeal will take several years.”

–Scott Peterson, VP of Government Relations, Avalara

5. States Consider More Tax Exemptions

“Most states will consider exemptions for diapers and feminine hygiene products.  There is an organised national effort to exempt both. (See the Software section for more tax changes.)”

–Scott Peterson, VP of Government Relations, Avalara

6. States Align on Marketplace Taxes

“States will continue to expand the types of taxes and fees that marketplaces must collect to get them in alignment with other retailers who already collect those taxes and fees.”

–Scott Peterson, VP of Government Relations, Avalara

7. A Greater Focus on Reporting

In a recent article by the Controllers Council, they discussed some of the Financial Controller statistics and trends for 2022. When looking at reporting, they noted:

“Tomorrow’s companies will increasingly be driven by data and analytics. This means that controllers will have to adapt to technological resources that provide real-time analysis of the company’s finances.”

Communications skills will become more important as Controllers will need to be able to help shareholders and executives understand the action plan being put in place.

They continued: “ … we’re witnessing a shift from quarterly (or even weekly) reports to an on-demand system, where business data is readily accessible from a cloud-based system. Controllers will have to adjust to new practices surrounding the tracking and management of this data.”

8. Volatility and Uncertainty Create Opportunities for Efficiency and Growth

Companies will want to continue to invest in automation and position themselves to be able to take advantage of market opportunities, such as an acquisition or real estate. A recent Pudget Sound Business Journal article from Umpqua Bank looked at five predictions for 2022. One item that stood out was:

“We’re seeing more businesses automate and digitise basic functions in response to the talent shortage and to avoid gaps in productivity,” says Kathryn Albright, head of global payments and deposits at Umpqua. “One smart way is by automating payments and accounts receivables processes. It’s relatively simple and can yield significant savings.”

9. Converging Data and Analytics platforms

In an article on Gartner.com, Jackie Wiles shared several data and analytics trends. One trend focused on the convergence of data analytics platforms, noting:

“Analytics, business intelligence and data science tools are becoming less defined as tools. This overlap potentially creates more complete and effective links among data and analytics investments, practices, processes and key business outcomes. This, in turn, speeds D&A maturity, which translates into greater resilience and competitive advantage for organisations. 

To capture these opportunities, finance teams must tackle the fragmented state of their data and analytics networks. Although data and analytics has grown as a priority for CFOs over the past five years, and spending on it accounts for a significant part of the finance budget, much of that investment has occurred in a piecemeal fashion, with finance adopting individual tools and systems that are incompatible. This has left analytics capabilities in silos and made it more difficult to create comprehensive analysis to inform effective decision-making.

To ensure a constructive convergence of analytics tools and governance, you will need to expand analytical capabilities, roles and processes, anticipate changes in products and practices, plan for this convergence of platforms and facilitate collaboration between data and analytics communities across the organisation.”

10. Digital Networks Will Power the Future of Accounting

Accelerated by the pandemic, Cloud and Software as a Service continue to be key drivers of innovation across all industries. According to Aaron Harris, Global Chief Technology Officer at Sage, digital networks will comprise the next stage of technological advancement. At the Sage Transform conference in Las Vegas, Harris noted:

“Digital networks are the new enabling architecture. In SaaS, we say that digital records the business; in a network, we say digital conducts the business. SaaS was designed for everyone in the business; digital networks are designed for everyone in the business ecosystem. In SaaS, customers share computing resources; in digital networks, people are sharing data and activity.”

SaaS CFOs and Controllers in need of a scalable, future-forward platform, take a brief tour of a cloud ERP built from the ground up specifically for the subscription business model.

Wishing you and your business success in 2022!

The Akuna Solutions Team