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    05 / 11 / 2020

    Are Your Reports Investor Worthy?

    To quote Wayne’s World, “We're not worthy!”, is how most startups feel when reporting to investors, or potential investors, with their outdated Excel sheets riddled with manual errors. You started your startup on the core belief that your product or service is game changing, and you want the world to know it. But the minute you get in front of an investor you start to second guess yourself and your numbers.


    There’s nothing inherently wrong with spreadsheets; they’re excellent tools for many different jobs. But data visualization and data communication is not one of them. In fact, an Excel cut and paste snafu cost TransAlta $24 million and Barclay’s Bank lost millions due to hiding cells instead of deleting them in Excel. It pays to have good Excel skills, but would you bet the future of your organization on it?

    Recently Marcus Wagner, CEO & Founder at AcctTwo, and I hosted a webinar where we talked about the importance of real-time dashboards and analytics. Marcus showed an example of Domino’s Pizza Tracker, where you can track your pizza from creation to delivery. “When you think about your business, even if you are just getting started, this is what you should be aiming for or even expecting. Don’t compromise. You should not wait until the end of the month to figure out how you are doing. And you should have the level of reporting needed to manage your business.”

    Easily see SaaS Metrics with the AcctTwo Advanced SaaS KPI DashboardIf your passion could be bundled up in a report, what would it look like?

    Would it be the messy Excel document you have in front of you today? Or, would it be a slick real-time dashboard reporting on all the metrics that you need daily at your fingertips?

    Trying to report metrics from an Excel spreadsheet is a real challenge. The issues are well documented – manually intensive and error prone, but Excel is everyone’s go to. There is a fair amount of work involved in setting up an Excel document from a blank slate, especially if you want to use it for reporting purposes. If you are able to get a template with the metrics you want, one of our biggest issues with Excel is not its capability. Not at all, it has tremendous calculation and reporting power. The biggest issue is that it doesn’t give timely reporting and analytics. If you use Excel, by its nature, it means your data is likely out of date. You deserve real-time metrics capturing the data that you want to see.  

    How do you construct the perfect dashboard?

    Early on in a startup, you may be only concerned with revenue and profits. But as your business grows, and you want to attract investors, a deeper look at performance and financial metrics can help you spot potential pitfalls before they occur. 

    At AcctTwo, we’ve worked with hundreds of SaaS and technology companies and through that experience, have developed the AcctTwo SaaS KPI Dashboard. Our dashboard not only captures the metrics you need, it also leverages application logic to automatically analyze, and categorize transactional activity. We are able to identify and expose incredible insights into those transactional events and their impacts on CMRR. We go far beyond the typical expansion and contraction designations and track CMRR-level of detail that goes undetected and unmeasured by comparable systems. For example, we can track your discounted pricing behavior’s impact on CMRR by isolating recurring revenue into buckets, such as uplift and markdown and we can even handle the allocation of blank discounts to the appropriate products and associated CMRR categories. We’re tracking activities, such as cancellation and D-books to their own buckets – separate and apart from churn and can even account for nuance situations like late renewals, so that it doesn’t artificially overstate churn.

    SaaS Dashboard

    To put it simply, you get the metrics you need for investors at your fingertips in real-time. As soon as a transaction is entered in the accounting system, this dashboard will change! You could create something like this in Excel, but unless your spreadsheet is connected directly to the database of our accounting software, your dashboard will be based on latent data.

    What metrics should a startup track?

    No matter what reporting and analytics tool you end up using, at the very least you should track industry relevant metrics. The easiest thing to do is not “recreate the wheel”. In most industries, there are standard metrics used by almost everyone. For example, if you are subscription-based business, the standard measurements include things like:

    1. Annual Contract Value (ACV): the average annualized revenue per customer contract.
    2. Committed Monthly Recurring Revenue (CMRR): is a forward-looking SaaS metric that combines actual Monthly Recurring Revenue (MRR) data with known bookings and churn data.
    3. Customer Acquisition Costs (CAC): Customer acquisition cost is the best approximation of the total cost of acquiring a new customer/client.
    4. Churn: customer churn is the percentage of customers that stopped using your company's product (or service) during a certain timeframe.

    Identify and familiarize yourself which performance metrics that mean the most to you and your investors.

    You are worthy!

    Scott Lenet from Touchdown Ventures hits the nail on the head with his article in, “Narrative skill might be how entrepreneurs capture attention from investors initially; but at a certain point, the emphasis should shift to realistic assessments so that the board can help management navigate challenges, capitalize on opportunity, and thrive. Board meetings, in my opinion, should be grounded in reality.”

    You are worthy and having a great dashboard will help you go the distance and help you deliver more facts per minute than any Excel sheet ever could.

    About Glen Strack

    Glen Strack is AcctTwo’s Reporting and Analytics Practice Leader. As a tax accountant, programmer, and Sage Intacct reporting and implementation specialist, Glen has more than 25 years of experience in finance and technology.

    Watch Glen's Timely Reporting & Analytics on-demand webinar here >

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