This week on the Expert Voices podcast, Randy Wootton, CEO of Maxio, speaks with Alex Diaz-Asper, Principal & Founder of Tarsus, and an experienced figure in the financial dimension of SaaS businesses. With an extensive background in private equity and M&A, Alex shares key financial concepts and strategies within the SaaS landscape. Randy and Alex explore the importance of clean financials, the impact of accounting errors on M&A, and navigate through the potential risks and rewards of dealing with client concentration. Delving into the transition from PE to an operational role, Alex also shares insights from the strategic partnership between finance and sales divisions in scaling SaaS businesses.

Quotes

• “If you have large annual upfront invoices you can't assume cash comes in evenly over the twelve months. So if you signed everybody in Q4, you had a great Q4 and Q3, and you're starting to run out of cash and you know, you got it. You see down the horizon. Okay, here comes all the renewals and new cash is coming in. So that's super important from the cash flow models to be able to see those kinds of ebbs and flows of cash flow and having a tool to help you track the renewals.” -Alex Diaz-Asper [23:51]

• “One thing that has changed a lot is how the CFO is a big part of the collaboration, especially with the sales team, early stage. It is super important that we are partners with each other, the salespeople and the CFO, because we need to know how to manage cash and we need to know new sales as well.” -Alex Diaz-Asper [35:00]

Expert Takeaways

• Clean books and accurate revenue recognition inform go-to-market strategies for SaaS businesses.
• Managing client concentration: advocating for no more than 20% revenue dependence on a single client.
• Alex’s transition from a PE background to an operational role underscores the importance of building a strong finance team around you.
• Understanding revenue definitions: the distinction between GAAP revenue and analytical revenue (ARR), both crucial for different stakeholders.
• Staying on top of technology tools and adopting efficient RevOps strategies for SaaS growth.

Timestamps

(02:51) Accounting Errors as Deal Breakers in M&A

(06:02) Mitigating Risks of Client Concentration in Business

(10:03) Evolving Financial Roles in Early Stage Companies

(15:41) Decoding Financial Operations and Revenue Recognition

(26:30) Efficiency in Finance Through Technology Adoption

(32:10) Evolving Roles and Tools for Today's CFOs in B2B SaaS

(40:46) Speed Round: Favorite Metrics and Influencers

Links

MAXIO

Upcoming Events

Maxio Institute Report

Randy Wootton LinkedIn

Alex Diaz-Asper LinkedIn

This week on the Expert Voices podcast, Randy Wootton, CEO of Maxio, speaks with Rob Brown, Co-Founder of Accounting Influencers Roundtable (AIR), and author of the book “Build Your Reputation.” Rob and Randy delves explore the evolving responsibilities of accountants and accounting firms as they navigate an industry that demands a shift from traditional compliance to more strategic advisory roles. Rob touches upon the challenges faced due to an aging profession, technological advancements, and the shift towards value-added services. Listen this week as Rob shares effective strategies for making an impact and selling to accountants, highlighting the significance of establishing authentic partnerships and providing impactful solutions.

Quotes

• “Accountants have to be able to sell an argument, an opinion, an excuse, a statement, a fact. They have to be able to get behind the stats. You're asking much more of an accounting and finance professional now than you ever were. That is why it's rarefied air to get somebody that can do all of those things and this is why we've got a problem.” -Rob Brown [18:54]

• “There's so many different ways to define an influencer. There's a lot of people that make a lot of noise on social media and they look popular and they have thousands of followers, but their content is lousy. It's lame. It's unoriginal. It's not innovative. They've regurgitated it from other people or they've said the same thing for years. You would look at them and think they're influencers. But I measure influence by relationships rather than noise and social media metrics.” - Rob Brown[48:27]

Expert Takeaways

• The transition from traditional teaching to influencing the accounting industry is underscoring the need for education systems to instill real-life applicable skills.
• Accounting is an aging profession facing a talent shortage, prompting a shift from compliance-centric roles to advisory and consultative engagements.
• Technological savviness, commercial acumen, people skills, and selling abilities are identified as key skills for modern accounting professionals to remain relevant.
• Private equity firms are increasingly investing in accounting firms, seeing potential in streamlining operations and capitalizing on technological efficiencies.
• Selling to accountants is challenging due to their risk-averse nature; building strategic partnerships and establishing credibility is crucial for success in this market.

Timestamps

(00:02) Rob Brown intro

(06:23) The evolving relationship between accounting firms and startups

(11:33) Accountants are reinventing themselves as consultants, coaches, and mentors

(19:18) The need for additional certifications to develop business awareness

(25:47) AI may not have a rapid impact on the accounting industry

(34:05) Three ways to get the attention of accountants

(39:41) Understanding the target market

(45:15) Focusing on deep work

(50:37) The difference between influence and impact

Links

MAXIO

Upcoming Events

This week on the Expert Voices podcast, Randy Wootton, CEO of Maxio, speaks with Jim Delaney, CEO of Traction AI, and Kristian Marquez, President, CEO, and CFO of FinStrat Management. Randy, Jim, and Kristian discuss the significance of pairing robust revenue operations with meticulous financial strategies to foster startup growth. Jim shares his experience at Canvs AI and the intriguing role AI plays in gauging human emotions—a significant leap from traditional social media monitoring tools. He highlights the importance of unifying marketing, sales, and customer success teams with integrated systems to drive performance metrics. Kristian, with his telemedicine and financial expertise, unlocks the mystery behind early-stage fundraising and financial management, guiding founders through the journey from inception to exit by crafting solid financial foundations and leveraging key metrics to fuel growth ambitions.

Quotes

• “If your foundation is built on quicksand, what difference does it make? It's not up to us to set expectations that we're doing a lot of cleanup. We've become very adept at it. We share with our clients, our founders, and our CEOs that we don't like cleanup any more than you guys do. We like standard repeatable processes. It is essential to have a big focus on getting everything right because the old garbage in and garbage out dashboard models are meaningless if the underlying data is wrong.” -Kristian Marquez [46:19]

• “It's locking down a forecast, something as simple as that. And how well and accurate our forecast really says so much about our level of professionalism because of all the things that are incorporated in that. Especially with earlier stage ventures, where you're thinking about your cash-out date, you're thinking about your cash burn, you're thinking about your current cash position. How much cash is actually coming through business? It's absolutely imperative that it be predictable, reliable, and accurate. We're making funding decisions at board meetings about whether or not we're going to go hire those next two or three sales guys or customer success. So that's the basis of why it's so important.” -Jim Delaney [25:28]

Expert Takeaways

• How emotions can be measured through AI
• The vital role of connecting RevOps with FinOps for streamlined operations and informed decision-making, promoting efficient revenue generation.
• Christian Mark's approach to financial management emphasizes the importance of clarity on founders' ultimate goals, which can inform actionable financial strategies.
• The significance of establishing product-market fit before scaling operations for startups in the zero to one million ARR phase.
• Practical recommendations for early-stage SaaS companies on financial operations, including the necessity of professional bookkeeping and system integrity.

Timestamps

(00:04) Jim Delaney and Krstan Marquez intro

(12:06) CMS star ratings, the role of data, and minimizing biases

(16:29) “SaaS in a Box”

(21:00) Accurate invoicing and revenue recognition

(23:56) The challenges of data hygiene

(27:15) Identifying the best and worst performing campaigns and channels

(43:48) Focusing on customer volume with a billing module in b2b and b2c SaaS companies

(50:14) Establishing repeatability and predictability

(53:15) CAC (Customer Acquisition Cost) efficiency for go-to-market companies

Links

MAXIO