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For SaaS companies, the topic of scaling usually means renewing their tech stack to remain efficient while growing. Excel automation tools and FP&A software are often used among business leaders to streamline financial planning and SaaS forecasting. However, that process isn’t always fast nor easy so many finance teams maintain their business forecasting and planning on spreadsheets.
The old-fashioned 30-tab model with a crazy assumption buried somewhere in a spreadsheet isn’t likely to be enough for most companies in the near future. Thus, as an FP&A Manager or finance professional, you need to keep up with the latest FP&A trends, so your entire team can continue revamping and evolving your business’ financial planning practices.
A company’s survival depends on its finance team’s ability to quickly generate actionable insights and drive decision-making for senior management to predict future growth rates. Before we get started with the SaaS forecasting checklist, let’s briefly discuss what SaaS forecasting is and why it is so important today.
Financial forecasting and planning can have a significant impact on a company’s growth month over month. Forecasting helps an organization analyze its financial performance, identify gaps that may hurt the company, and plan for future growth stages and business scalability.
To expand a business, top finance leaders must be aligned on financial goals and opportunities. Most importantly, if a company experiences any pitfalls or disturbances in its operations during a certain period of time, a solid financial plan will be able to help them adapt and create a plan of action moving forward.
Financial forecasting is an overarching term that covers several sectors and includes different types of forecasting, such as sales forecasting, revenue forecasting, and cash flow forecasting, which are all used when creating SaaS financial plans to help companies set clear objectives.
A financial forecast is an estimation of future financial outcomes. These outcomes can help define a company budget and plan for generating future revenue. Just like any other company, SaaS businesses use financial modeling and SaaS forecasting to predict future recurring revenue, gain better insights on managing cash flows, and create more accurate business plans.
If you are still using spreadsheets and want to keep it real with SaaS forecasting strategies, here is the checklist you need to set accurate forecasts:
There is a sweet spot between identifying causal links and overcomplicating things. Don’t make the mistake of using a wildly wrong market growth figure as a key component to drive organizational decisions.
Eventually, as your SaaS startup continues to grow, your spreadsheets are going to get out of hand and in your revenue forecast, future cash flow projections, and sales process you will begin to feel the need for SaaS budgeting and forecasting software.
Even though you can stretch the mileage of spreadsheets with queries, macros, Power BI, or AppSheets, it is not a forever solution. You end up with just a few people that can actually operate your SaaS business models and it is not really scalable or user-friendly.
Excel may seem like the perfect solution to handle all of your SaaS forecasting capabilities. However, if you are truly trying to grow and scale your business, spreadsheets will only add manual processes and slow you down.
Instead, you can integrate into your tech stack FP&A software that is adaptive, intuitive, and customizable to your company’s unique needs. So, how do you find a SaaS FP&A software that is robust enough to manage all of your SaaS financial forecasting needs?
Abacum is a collaborative FP&A solution that is changing the way startup teams do their financial modeling and qualitative forecasting. Instead of sifting through endless Excel spreadsheets to create a single financial model, our FP&A software serves as a centralized hub for all things Finance, allowing CFOs to create more accurate forecasting and faster models.
If you are a SaaS company looking to modernize your revenue model, financial budgeting process, and cash flow forecasting, our platform is the perfect solution.
With Abacum, we empower finance teams of high-growth tech companies to become true strategic partners in their organization, by driving time-to-insight with powerful automation and seamless collaboration.
Request a demo now to see the product live and start your transformational journey.
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