This is amazing content. As a B2B SaaS Finance leader I resonate with everything you've said and taken some pointers on questions to ask for our next renewal. Things I would add -
a. SaaS Management Tools - Tipalti and bill.com are AP tools and not SaaS management, that needs to be corrected.
I have worked with and continue to work with one of the (SaaS Optimization) vendors mentioned here and I must tell you they have saved us a tonne of money and time. It's almost table stakes these days to work with one of these folks.
b. Payment Terms - While most sellers offer annual upfront, I will also ask for an early payment discount, even if its 5-6% on the current or upcoming bill, I will take it.
c. Business Value Realisation - The best tools have iron clad CSM teams and they undertake something called a business value realisation where they work with customers to identify the ROI of the tool and provide tips on how to increase that. The SaaS buyer needs to have that handy and work with their tool CSM because this document will have the answers to most questions we ask as CFOs. (We are going through this process with Snowflake and am super impressed)
d. VP's Pet Software Tool - Most VP's who join come with their own set of tools that they are comfortable with and will try to rip and replace or overlay new tools, these questions should be asked to ensure that a tool isn't just being added because a VP or someone senior "wants" or "likes" using it / has used it in the past.
Great points! And good callout on point A - my point was there are various types of tools folks use to manage spend (AP tools help add with approvals and reporting and other tools help with SaaS sprawl and pricing). Lots of tools out there to help report and control spend!
Makes sense, 100% with you on approvals and reporting tools helping to manage SaaS sprawl. I'd go one step further and say that these tools (esp bill.com) in our case helped exponentially improve cost visibility across departmental leaders and reduce questions like - "why am I spending on this".
I keep saying that the Finance role has gone from being introverted and hoarding data to being super extroverted and putting as much data in the hands of the business.
As a SaaS seller I found this article both helpful and cathartic. Especially when we’re usually pressured to do unhelpful/destructive things to try and close deals by a certain date. Every CRO should read this. Keep up the good work!
I've had the privilege to do this on both sides of the table and I relate to these dynamics, especially in the recent COVID years. More scrutiny, more pressure, more uncertainty. One thing that helps a lot in these conversation is to keep in mind the humanity of every person around the table and that they are paid to do a job. Recognizing that and finding a common ground would go long ways.
This is absolutely phenomenal content. I shared on LI and tagged you (but next time put this there faster so I can share it directly! Not that you have better things to do or anything)
It is amazing to me how many SaaS companies got funding and ended up doing stupid things with that money, only to go out of business in a year or two. It is easy to go crazy on your tech stack and buy every tool possible, but is it really bringing that much value? In most cases, there is a free version somewhere that's at least 60% as good. For companies that are just getting started, that's good enough.
Great read here - it reminds me in some ways of CJ's 3 Bucket post from a couple of months ago. CFOs are applying more rigour around spend and there is an aligned thinking around this.
Do you have a dedicated "Procurement" team? Or is the activities of Procurement devolved through the business, with Finance acting as the approving force for the budget?
This is amazing content. As a B2B SaaS Finance leader I resonate with everything you've said and taken some pointers on questions to ask for our next renewal. Things I would add -
a. SaaS Management Tools - Tipalti and bill.com are AP tools and not SaaS management, that needs to be corrected.
I have worked with and continue to work with one of the (SaaS Optimization) vendors mentioned here and I must tell you they have saved us a tonne of money and time. It's almost table stakes these days to work with one of these folks.
b. Payment Terms - While most sellers offer annual upfront, I will also ask for an early payment discount, even if its 5-6% on the current or upcoming bill, I will take it.
c. Business Value Realisation - The best tools have iron clad CSM teams and they undertake something called a business value realisation where they work with customers to identify the ROI of the tool and provide tips on how to increase that. The SaaS buyer needs to have that handy and work with their tool CSM because this document will have the answers to most questions we ask as CFOs. (We are going through this process with Snowflake and am super impressed)
d. VP's Pet Software Tool - Most VP's who join come with their own set of tools that they are comfortable with and will try to rip and replace or overlay new tools, these questions should be asked to ensure that a tool isn't just being added because a VP or someone senior "wants" or "likes" using it / has used it in the past.
Great points! And good callout on point A - my point was there are various types of tools folks use to manage spend (AP tools help add with approvals and reporting and other tools help with SaaS sprawl and pricing). Lots of tools out there to help report and control spend!
Thanks, Naga!
Makes sense, 100% with you on approvals and reporting tools helping to manage SaaS sprawl. I'd go one step further and say that these tools (esp bill.com) in our case helped exponentially improve cost visibility across departmental leaders and reduce questions like - "why am I spending on this".
100%! Providing visibility and real time reporting helps a ton with accountability and controlling spend
I keep saying that the Finance role has gone from being introverted and hoarding data to being super extroverted and putting as much data in the hands of the business.
As a SaaS seller I found this article both helpful and cathartic. Especially when we’re usually pressured to do unhelpful/destructive things to try and close deals by a certain date. Every CRO should read this. Keep up the good work!
Thanks, Andy - Feel free to share it with everyone you know! 😎
I've had the privilege to do this on both sides of the table and I relate to these dynamics, especially in the recent COVID years. More scrutiny, more pressure, more uncertainty. One thing that helps a lot in these conversation is to keep in mind the humanity of every person around the table and that they are paid to do a job. Recognizing that and finding a common ground would go long ways.
This article is so awesome. Thank you.
Thanks, Patrick!
This is gold!
🙏Thanks, Kyle!
This is absolutely phenomenal content. I shared on LI and tagged you (but next time put this there faster so I can share it directly! Not that you have better things to do or anything)
Thanks, Elena! Yes, I need to work on my LI game. Still new there so a bit slow. I just added it!
https://www.linkedin.com/feed/update/urn:li:activity:7054840586335318016
Great post!
It is amazing to me how many SaaS companies got funding and ended up doing stupid things with that money, only to go out of business in a year or two. It is easy to go crazy on your tech stack and buy every tool possible, but is it really bringing that much value? In most cases, there is a free version somewhere that's at least 60% as good. For companies that are just getting started, that's good enough.
Great read here - it reminds me in some ways of CJ's 3 Bucket post from a couple of months ago. CFOs are applying more rigour around spend and there is an aligned thinking around this.
Do you have a dedicated "Procurement" team? Or is the activities of Procurement devolved through the business, with Finance acting as the approving force for the budget?
yc-tips.com