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Igniting SaaS business growth through automation

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By Tarmo van der Goot, VP EMEA, Chargebee

 

The subscription-as-a-service (SaaS) sector is experiencing some of its strongest growth ever, as an increasing number of businesses start thinking outside the box and offering up attractive packages for customers. However, finance teams are under pressure to stay on top as competition ramps up by winning new opportunities in different markets and shaking up pricing models. It’s certainly an increasingly competitive market when you consider how ubiquitous SaaS products have become: in 2021, organisations reported using 110 SaaS applications per annum, a significant increase from 2015, when they were barely using eight.

SaaS vendors are also facing the challenge of fast-changing customers tastes, with many quick to change or cancel subscriptions altogether if those aren’t to their liking. This is leading to an increase in churn rates, which should be setting alarm bells ringing for all SaaS vendors.

Automation is one sure-fire way to make certain SaaS businesses aren’t left behind when it comes to meeting customer demands, and more and more businesses are taking advantage of it. Rather than have to resort to outmoded techniques such as data entry with spreadsheets, an automated approach can provide finance teams with the tools they need to drive continued growth, particularly in three areas: accounts receivable, account reconciliation and billing.

Keeping cashflow in check with automated accounts receivable

Just as the human body can’t function without a steady blood flow, neither can businesses do without a healthy cashflow. Key to this is ensuring accounts receivable (AR) is collected on time and correctly. Errors in manual accounting or partly – and poorly – automated processes can cause the numbers to stop adding up, and mistakes made in AR can impede other areas of the business before you know it.

Ensuring that the whole process of AR collection is fully-automated can eliminate such headaches, by giving finance teams visibility and control over which customers ought to be charged when, and using which method. This is a particularly important issue for SaaS businesses that give their customers flexibility to amend their plans as they choose. Any fast-growth company opting to manually work out these complexities risks losing sight of more holistic considerations about customer and business priorities.

Once AR is fully automated, the difference is noticeable. Teams can have all the necessary information provided to them on dashboards, so they can keep track of cashflow regularly and act on issues before they fester. Having one’s ducks in a row in this way not only allows businesses to avoid building up a string of bad debts, it also frees up finance teams to focus on proactive, strategic decision-making.

Errors become a bygone concern through automated account reconciliation

Another area where automation can make a real difference is account reconciliation (AR). Not being able to trust account figures through poor AR can cause an under- or overestimation of figures, meaning overspending can ensue. Worse still, businesses can face difficulties paying salaries to their own workers or suppliers, or fail to spot potential instances of fraud, incurring fines that can cost them greatly.

The ability of automated systems to reduce the likelihood of human error in AR collection is an evident advantage here, too, but beyond that, automation can also make payment gateways easier to work with, as businesses can configure and immediately match customers’ preferred payment method and currency to the right gateway account. No need to bring in a finance team member to double-check the process, and no accounting errors to deal with.

Breaking into new markets with automated billing

When presenting a SaaS product to the world, vendors can be juggling numerous features such as add-ons, different price points, coupons, use of foreign currencies or simply unpredictable frequencies for billing. Whether they occur in isolation or all together at once, these issues can make billing processes near impossible to keep track of at times. To compound matters, businesses face the danger of customer churn when payment cards are declined, taking a needless toll on the bottom line.

Compliance across different territories must also be borne in mind, with regards to the varying tax regimes a business may be operating in or data protection laws which might exist. When moving to new markets, employing billing automation software isn’t just a convenience but a necessity. Automated billing allows businesses to remain compliant through improved revenue recognition, helping them stay on the right side of standards such as ASC606 and IFRS15.

The aforementioned problem of declined payments can also be resolved, as dunning management can be automated to the point where revenue leakage is minimised. Automated dunning means customers receive prompts for using out-of-date credit cards, or payment methods can be updated. Put together, these improved practices help prevent revenue falling through the cracks.

In automating billing, businesses can exercise maximum financial visibility and control over existing product families as well as scale billing capabilities to accommodate further growth, be that launching new and exciting product families or services, domestically or abroad.

Automation truly pays in 2022

The world of fintech has been in the grip of a dramatic technological revolution, but not all are equipped to adapt. Moving into a subscription-based model can create a host of new opportunities but these come with challenges of their own which have to be faced head-on. In this environment, financial automation allows businesses to turn their gaze from avoidable mistakes in the rear-view mirror and focus on the tremendous growth opportunities directly in front of them.

 

Business

Hidden channel costs: how to find and tackle them

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By Mark Wass, Strategic Sales Director, UK and North EMEA at CloudBlue 

 

Growth for businesses will always be a key objective. However, in this digital age, if it occurs too rapidly, it can often unearth cracks that harbor hidden costs and pre-existing efficiencies.

 When it comes to channel distribution, for the majority of partners, hidden costs are widespread. A lot of partners work with multiple channels and systems, and this can become complicated. It can also affect their ability to track information.  On average, 30%-40% of IT spending  in large enterprises is accountable to inefficiencies caused by shadow IT.

 There is no single root cause of hidden costs. An array of issues such as wasted resources, labour, time constraints, poor implementation oversights and maintenance issues are all contributors, and the cuts only get deeper as partners scale. Here are the ways service providers can eliminate hidden costs.

 

Where to look for hidden costs 

 In general, unaccounted, or unattributed costs originate from four areas, with the first being shadow IT.

 Shadow IT is the use of systems, devices, software, applications, or services without explicit IT department approval. The phenomenon has grown in recent years due to the adoption of cloud-based applications and services, with the average company using 30% more unique SaaS (Software-as-a-Service) apps than they were in 2018. Thanks to the ease of adding new software, departments are going it alone and buying platforms that can be niche, or duplicate processes, and even in some cases using multiple versions of chat apps to communicate internally. 

Mark Wass

The next hidden cost stems from implementation and integration. Channel partners need to work within different systems, and almost always underestimate the budget needed to work with new software solutions. A consistent blind spot across the industry is the inconsistency of implementation and integration at budget.   

In terms of maintenance, it is especially difficult when partners create homegrown software to handle provisioning, relationship management, or data management. While such proprietary software might perform well for initial purposes, maintenance and upgrades can be a nightmare. Likewise, internal knowledge transfer in this situation is crucial.  

And finally, the scalability of expanding from one market to the next is not linear and neither is the cost. Partners that have already launched in one part of the world often think that it will cost around the same to expand into another region, like between the US and Europe. However, this thinking does not consider the additional effort to contend with the new currency, language, audience, and regulation, as well as local operations within the region.  

 

Tackling hidden costs  

The good news is that there are multiple remedies to hidden costs. Integrations, for example, successfully bring together disparate systems and improve efficiency. Partners that have manual processes and pull information from one system before typing it into another are wasting time and resources by dedicating an entire person to this process. Clearly, this should be automated to cut down on human errors and save in the long run. 

Along with integrations, partners should purchase software with scalability and unification at heart. There is no magic platform that does everything entirely so companies should opt for the best of breed, even if the initial investment is a bit more. This will help to offset the concerns of scalability, maintenance, lack of expertise, and potential unforeseen overheads. Moreover, best-in-class platforms help to paint a consistent long-term picture of the health of channel operations. 

For channel health, it is also integral to integrate outside experts to perform an overall business diagnostic. These can be consultants, solution architects, and those alike that know channel software and best industry practices to help architect a scalable and efficient platform. Working in conjunction with the team, these objective outsiders work to find the gaps and tighten any software screws. 

 

Helping the channel by combating inefficiencies

Hidden costs can become widespread, and this can lead to channel partners paying up to twice the price for half the output.

 More than the financial downside, though, hidden costs should be thought of as hidden inefficiencies. Especially in today’s accelerated digital transformation, inefficiencies can make or break fast-growing channel operations. Therefore, weeding out hidden costs with improved efficiencies can work wonders by saving budget and running a tighter ship. 

 Integrated software and platforms can then be used for change. By unifying and standardising existing systems, managers receive a single view of contracts, reporting, sales, marketing, and day-to-day operations. This  provides them with the right tools to achieve sustainable growth. Rather than overwhelming teams with several types of platforms and software, this single operational view allows for the much-needed oversight that is necessary to set a business up for success. 

 It is essential for channel partners to seize the moment and eliminate the perils of hidden costs, especially given the rapid growth of businesses in the digital and cloud spaces.

 

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Automation nation: Liberating workers from desks, data entry and the doldrums

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By

Gert-Jan Wijman, VP of EMEA at Celigo.

 

Just when businesses thought the tough times were over, even more challenges ensued. While still recovering from the financial effects of the pandemic, companies were hit with an economic downturn that’s now resulted in a recession in the UK.

In this economic context, teams are being forced to do more with less. This means onboarding with reduced manpower, delivering ground-breaking marketing campaigns with less budget and mitigating outlay in the middle of a cost-of-living crisis. Being nimble and streamlining operations has never been more imperative.

That’s where automation comes in. While automating before the recession would’ve been the ideal scenario, it’s never too late to get ahead of competitors. It’s only a matter of when – not if – automation becomes standardised, as businesses insistent on using legacy tech and manual processes will be outpaced by those savvy enough to embrace smarter alternatives. In fact, it’s predicted that in just two short years, 70% of large global enterprises will have over 70 hyperautomation initiatives.

For finance teams and the tech-strapped CFO in particular, automation can be a saving grace. Tech stacks are more complex than ever due to the proliferation of specialised finance SaaS applications for quote to cash, Accounts Receivable & Accounts Payable (AR / AP), cash management, tax, accounting close and corporate performance management. Having the tools to automate these processes enables modern CFOs to adapt to changing tech needs, scale quickly and future-proof their organisations.

Automating today to prepare for tomorrow

Too often, automation is viewed as a job killer. We’ve all heard the apocalyptic narratives about ‘robots taking over,’ but that’s an outdated notion. Instead, automation is a job enhancer. Not only does it minimise errors, speed up processes and help businesses cut down on admin, it liberates employees to dedicate their time to be more creative or perform complex tasks.

Take a company like WeTransfer, for example. Bogged down by manual processes, the team struggled with closing financial books and completing billing cycles on time. After integrating its tech stack, quote-to-cash automation worked immediately and the time to close reduced dramatically, significantly reducing the hours dedicated to manual data entry.

Its revenue accountant was then able to work on core tasks in the finance department and alongside sales operations on the process improvements, no longer worrying about completeness issues associated with the sales and financial systems integrations.

Not only that, it liberated employees physically and unlocked access to more valuable talents. Beneath all the technical and monetary benefits, these are the core principles behind why automation will soon become impossible for firms to ignore.

Physical Liberation

Hybrid work has been one of the biggest positive developments driven by the pandemic. However, while employees surely won’t miss long commute times or the constraints of office life, a disparate workforce comes with challenges. It’s vital that organisations can trust their data and business processes in order for effective collaboration to be possible.

Automation can enable this, as it allows cloud-based systems to share data across a business through integration, ensuring all workers have access to the resources they need to work together effectively wherever they are.

This makes businesses nimble, able to operate across multiple locations when needed and well equipped to decouple entirely from headquarters if needed. Workers can then be as effective from home as from the office, ensuring they can maintain a better work-life balance without compromising productivity.

It’s no wonder then that 78% of organisations worldwide think remote working will increase the proportion of their workforce using automation, while over two-thirds (71%) that have already implemented automation are beginning to feel the benefits.

Liberating Talent

Automation also ensures talent is no longer wasted on manual tasks. 3 in 5 (60%) occupations could technically automate more than 30% of their tasks, highlighting the bevy of possibilities and offering a glimpse at the future of work.

When workers spend their time crunching numbers and organising spreadsheets, it’s easy for them to feel like a cog in a machine. With automation, however, they have more room to share their ideas and feel connected to the operations of the business.

With menial tasks taken out of their hands, employees are freed up to perform more complicated and creative jobs, the sorts of work that could never be automated. And by filling workers’ days with more of these engaging responsibilities, they’re able to feel like they have a real stake in the company’s success.

There is also research to suggest that workers can get as many as 100 hours a year back as a result of their manual tasks being automated, meaning everyone could get an extra two weeks of paid leave without productivity taking a hit.

Automating into the future

Already, over 80% of organisations self-report increased or continued investment into hyperautomation initiatives. So the appetite is there, now comes making it a reality.

Automation at scale is the dream, but the transition won’t happen overnight. In a perfect world, organisations will be able to assign all manual and tedious tasks to the machines, with employees only needing to provide oversight when necessary, but there’s a journey to get there.

That’s why it’s critical that CFOs collaborate closely with their CIOs. Only then can we realise a scenario where manual processes are eliminated entirely, and data across systems can be accessed and updated in real-time. But this will require leaders to understand each other’s needs and challenges so they can align their visions.

As organisations become more disparate, this partnership will only grow in importance. CIOs can empower the CFO and their teams to implement the automation initiatives best for them, with IT maintaining oversight to ensure compliance.

With the right structure and mindset, CFOs and the entire C-Suite can be encouraged to pursue digital transformation in a way that’s most effective for them and the entire organization.

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