"No-BS" SaaS Forecasting Tips for Scale-Ups

Scaling to more advanced FP&A solutions isn't always an option. For those using spreadsheets, these SaaS forecasting tips skip the "BS" & go straight to the important stuff.

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For many SaaS companies, the topic of scaling usually means adopting new tech to remain efficient while scaling. Excel automation tools and FP&A software are often used among financial teams to streamline financial planning and forecasting. But that process isn't always fast nor easy so most SaaS finance teams maintain their business planning and forecasting on spreadsheets. Now to the real part.

For those that do, we know your FP&A managers and analysts are probably Excel or Gsheets pro and you already have a lot of modeling experience under your belt. Maybe you've even got some fancy macros or automation going on. But this is not your bulge bracket present value, future value or wild terminal value BS. Your fancy, 30-tab model that probably has a crazy assumption hidden somewhere isn't going to cut it. That’s why it is so essential to be following the latest FP&A trends so your team can continue revamping and evolving its financial planning processes. 

This is real life. Your company's survival depends on your ability to quickly generate insights and drive decision-making for senior management.

Before we get into the SaaS forecasting checklist, let’s quickly go over what SaaS forecasting is and why it is important.

What Is SaaS Financial Forecasting?

Whether you realize it or not, financial forecasting and planning can have a major impact on a company’s success. Forecasting helps a business analyze their financials, identify any gaps that may be hurting the company, and plan for future growth and scalability. In order to really expand a business, top finance leaders within the organization must all be aligned on financial goals and opportunities. Most importantly, should a company experience any pitfalls or disturbances in their operations, a solid financial plan will be able to help them adapt and create a plan of action moving forward. 

Financial forecasting is an umbrella term that covers a number of different sectors. Sales forecasting, revenue forecasting, and cash flow forecasting are all used when creating financial projections, helping companies set clear objectives. A financial forecast is basically an estimation of future financial outcomes. These outcomes can then help a company budget and plan for the future. Just like any other company, A SaaS business uses financial modeling and forecasting to predict future revenue, gain better insights on managing cash flows, and create more accurate business plans. 

Here's a SaaS forecasting checklist to keep it real if you're still using spreadsheets.

KISS

...because Keep It Simple Stupid

There is a sweet spot between identifying causal links and overcomplicating things. Don't make the rookie mistake of using a wildly wrong market growth figure to drive organizational decisions.

  1. Show intermediate calculations for easy review. You're not getting a bonus for long formulas.
  2. Aim for using variables you can control (e.g. marketing spend or sales team to drive revenue), not external variables (e.g. market growth).
  3. If you must use Lookup functions, use Tables for easy referencing.
  4. Aim to be (more or less) directionally correct: 80% right today vs. 100% right two days late.
  5. Keep your assumptions and dashboards in one place for easy scenario testing.
  6. Don't go crazy with scenario modeling. Stick to the tried and true Base case, Optimistic case and Down case.
  7. Ask yourself - can I explain this to an investor within 5 minutes? If no, then it's too complicated.

COLLABORATE

...because no one wants to do it alone

  1. Create a clear workflow (i.e. roles & responsibilities) with the different departments and stakeholders so you can improve your forecast accuracy.
  2. Have a tool or method to enable cross-department insights. You have the unique privilege of seeing the whole picture- If Sales expects a huge bumper quarter, Customer Success better get ready!
  3. Use separate workbooks for different departments so you can share without needing to separate tabs.
  4. Create shared inboxes or groups

Eventually, as your SaaS startup continues to grow, your spreadsheets are going to get out of hand and in your revenue, cash flow, and sales forecasting process you'll begin to feel the need for fp&a software tools.

Don't get me wrong, you can definitely stretch the mileage of spreadsheets with queries, macros, Power BI, AppSheets, etc. But having done that myself, it's not a forever solution. You end up with just a few people that can actually operate your SaaS business models and its not really scalable or user friendly.

So enjoy your Excel or GSheets while it lasts! Once you start scaling even more, it's probably time to throw in the towel and move on.

How to Ditch Excel Sheets Once and For All

We get it, excel may seem like the perfect solution to handle all of your forecasting capabilities. However, if you’re truly trying to grow and scale your business, clunky excel will only slow you down. Instead, you need a FP&A tool 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 handle all of your financial forecasting needs?

Abacum is an FP&A solution that is changing the way SaaS startup teams do their financial modeling and 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, budget, and cash flow forecasting, our platform is the perfect solution. 


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With Abacum, we empower finance teams of high-growth tech companies to become true strategic partners in the organization by driving time-to-insight with powerful automation and seamless collaboration. Request a demo now to see the product live and start your own transformational journey.