Establishing a Single Source of Truth for Smart Recurring Revenue Management

One of the biggest roadblocks encountered by SaaS companies involves a lack of data centralisation. An approach that puts all your company’s data in one centralised location across employees and departments is known as a single source of truth (SSOT).

Scattering different data sets for various employees and departments across an array of programs or spreadsheets is always a bad idea. It leads to logistical problems and lost revenue because:

• You waste significant amounts of time in reconciliations. Different teams have to engage in a tedious email or IM exchange to confirm who has what data and if that data is current and correct. Manual data exchanges also vastly increase the probability that incorrect data will end up in your reports. And that, of course, leads to inaccurate and ineffective forecasting down the line.
• Your sales and marketing strategies are doomed to fail. Without an accurate CAC (Customer Acquisition Cost) or CLTV (Customer Lifetime Value Measurement), your sales and marketing teams won’t be able to engage in effective audience segmentation and targeting. Your company’s message won’t reach the right people, and you’ll miss out on more and more MRR and ARR as time goes on. All it takes is a slight informational inaccuracy to result in lost sales opportunities and revenue.

Let’s delve a bit deeper into what an SSOT is and how it can help your business maximize its recurring subscription revenue generated.

Staying Organised With An SSOT

Data integrity (a fancy term for the accuracy of your data) is a fundamental concept in the world of SaaS companies.

We already touched on some of the negative consequences of inaccurate or disorganised data, but some additional issues include:

• Spikes in your churn rate. A common occurrence that results from a lack of an SSOT is that customers are billed incorrectly because of an error related to decentralized accounting practices. Incorrect billing communicates a massive lack of professionalism to the affected customers and could lead to spikes in your levels of voluntary churn. Put yourself in your customers’ shoes: if a SaaS you’ve subscribe to can’t even bill you properly, can you trust them to fulfil all the needs that led you to sign up in the first place?
• Board presentation problems. When you’re in front of your board of directors, almost nothing is worse than displaying incorrect data. The trust of your board and your investors is one of the most valuable currencies you can trade in as the CFO of a subscription revenue company. Endanger that currency at your own risk.

Many CFOs mistakenly believe that their CRM or ERM acts as an SSOT. While these are valuable tools in your business arsenal, they fall short of the revenue benefits that a true SSOT can offer.

Enhancing Revenue Management With An SSOT

Implementing a fully automated SSOT is one of the most important ways for any company to optimise its revenue management.

Think of manual or spreadsheet-based revenue management as being a chain of information. Each exchange of information between employees or departments represents a link in that chain. Sometimes the links are strong, and there’s no problem at all.

But there’s an inherent flaw in the design of any chain. All it takes is for one link to fail–one manual billing mistake, an incorrect CAC or CLTV–and the entire chain snaps.

An automated SSOT, on the other hand, is more like a rope than a chain. All your data–revenue stats, KPI’s, role-based dashboards, and more–is seamlessly woven together like the strands of a strong rope. And everyone in your company has a firm grip on that rope at all times.

Switching from manual processes to an SSOT like Sage Intacct will ensure that:

• Access to information is shared across platforms. Say goodbye to wasting time tracking down info when you need it. An SSOT gives your company’s key decision-makers instant access to all the data they need, whenever they need it.
• Everyone’s operating from the same playbook. Manual revenue management makes it perilously easy for miscommunication to occur. It just takes one forecast or marketing department strategy based on an incorrect SaaS metric to derail a perfectly profitable quarter.
• Clear hierarchies of responsibility are established. With an SSOT, you can appoint one person or a team of people–many SaaS companies have a separate revenue management team–to oversee your data. Having one person or group take responsibility for your data integrity helps you avoid the disorganization and inefficiency of manual revenue management.

Businesses are in a constant state of flow and flux, so you need a flexible system to flow with those changes in real time as they develop. To Learn more about this and the importance of embracing digital transformation you can also read this blog article, “Digital Transformation Enabled by Cloud Financials“.

The Akuna Solutions Team