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As we finish Spaulding Ridge‘s 2019 budget and fine tune our ongoing monthly forecast process, I am reminded how much time finance organizations spend on cost containment without focusing nearly enough time on the revenue plan. Too often, finance relies on sales and marketing to set the revenue plan doing little to truly integrate revenue planning into the forecast. At Spaulding Ridge, the following three suggestions are employed to better drive our strategy through execution in the market while providing a complete view of revenue through profitability. Although this post is professional services focused, there are applications for all businesses.

1.     Sales and Marketing what-ifs must be integrated into the Financial Plan. I get it ” the Cx owning the revenue and marketing plan reports to the CEO (or their org) and not the CFO, but the CFO must have better access to the models that sales and marketing are running for budget and forecast. This is where Anaplan‘s Connected Planning platform comes into play for us. We run a revenue forecast model that captures various sales and marketing plays that are integrated with Salesforce for pipeline information while also being connected to our classic budget model downstream. We can look at different sales incentives by practice to increase topline while understanding the impacts to profitability with increased sales commission and potentially increased bonus expenses for our consultants hitting their utilization accelerators. The days of maintaining these forecasting relationships across multiple spreadsheets and tools are long gone.

2.     Stop slowing down the process between booking and billing. In Professional Services, we are constantly negotiating contracts and SOWs. It seems like it is almost a daily occurrence that we are struggling to compare various versions of a MSA with a prospective client that can delay a project start, which results in delayed revenue and consultants on the bench. We build our proposals using SpringCM/DocuSign, which is based on our Salesforce opportunity details. We let SpringCM manage the contract redline process between legal. Our proposals are also assembled within SpringCM, which directly pulls opportunity details from Salesforce, instead of copying / pasting old proposals together to create new ones. This system of agreement saves us hours if not days of productivity driving profitability by starting projects faster while decreasing contractual risk. As an added benefit, when the contract is finally executed, automated feeds are pushed to our G/L for project setup and billing.

3.     Don’t let the G/L account structure dictate how you plan. Too many organizations pull forward their G/L account structure to budget. We align our budget reports to the G/L for budget to actual comparisons, but we should not confuse reporting with strategy. Borrowing one of the main principles of zero-based budgeting, plan around an account structure that is based on price times volume relationships. Assuming minimum levels of materiality, building price times volume relationships that tie to aforementioned integrated what-ifs around revenue create a much more strategic tool than the traditional growing random expenses at inflation or other growth rates.

In closing, every business has unique needs, but almost every business can do a better job of integrating sales and financial planning across commonly distinct Cx organizations. At Spaulding Ridge, we are not the cobbler’s children, we use the tools we implement to run our own business.

Founded in 2018, Spaulding Ridge is a top management consulting firm, dedicated to client success and helping organizations implement and adopt best-in-cloud technology to solve their most pressing challenges. We provide the office of the CFO financial clarity to Sales and Operational complexity by integrating financial and sales SaaS Platforms.

We help:
• Finance gain control ” Increasing financial effectiveness, insight and impact
• Sales increase Productivity ” Hitting quota more quickly, consistently and efficiently
• Operations increase Competitiveness ” Through productivity rates, customer service outcomes, and efficiency