Written by David Appel – Sage / April 2023
It can be tempting to view sales and finance as separate and distinct units within your company. However, this mindset—especially for a SaaS CFO—can lead to missed profit opportunities that could be captured by fostering shared understanding on funding and scaling the sales funnel. By bridging this divide, your sales and finance teams can work together to set clear financial goals, coordinate sales activities, and ensure the overall sales strategy aligns with business objectives. When both teams embrace a cross-functional approach, they generate valuable insights that support growth, maintain customer satisfaction and maximize key performance indicators.
Rather than treating sales and finance as completely separate teams, recognize their strong potential to create a positive feedback loop. When sales and finance are aligned and unified on business goals, targets and KPIs, you unlock growth and gain clarity on where to invest. Aligning financial goals between departments also supports a strategic planning framework that drives sustainable growth. In this environment, real-time data becomes a cornerstone, enabling each team to make data-driven decisions that reflect market conditions, promote revenue growth and capitalize on opportunities for strategic alignment.
This article will guide you through that process from start to finish. You’ll learn how to identify financial objectives, develop a collaborative sales strategy and business model, and establish the cross-functional synergy needed to stay on top of key performance metrics. By aligning financial goals and focusing on key performance indicators, both sales and finance teams can communicate smoothly, share a vision for success and follow a clear path to business growth.
Why finance teams should be a strategic, data-driven partner with sales teams
Sales and finance both play critical roles in driving new revenue and maintaining it as recurring revenue as you scale. Historically, these teams have operated in silos with different priorities and metrics; however, this approach can hinder business performance and limit growth opportunities. By working together, these departments can achieve exponential results by combining their strategic strengths and aligning sales and marketing objectives with company-wide financial goals and business targets.
A quick note before discussing the benefits of departmental alignment.
Cloud-based accounting software should be an essential part of your team alignment strategy. It utilizes a single source of truth (SSOT) to enable full communication and data sharing between sales and finance. With an SSOT, team members in both sales and finance have seamless access to the data they need for their specific roles. This level of visibility supports sales and marketing alignment, helps define and measure performance indicators (KPIs), and provides a framework for continuous sales performance improvement.
Once finance and sales are working in tandem with an SSOT, they are ready to execute on critical business objectives, respond to evolving market conditions and refine their sales processes.
Maximize profits
Sales and finance must work together to maximize profits by providing full-lifecycle customer value. Sales teams typically focus on revenue generation and handle lead sourcing and onboarding, while finance teams focus on managing costs and maximizing profits. However, these goals are interconnected. For example, sales teams may offer discounts or extended payment terms to win deals, but these decisions can impact the profitability of the business.
By collaborating, sales and finance teams can find the optimal balance between revenue and costs to maximize profits. This approach ensures that each sales activity meets business objectives and supports financial goals, such as protecting cash flow and strengthening strategic alignment. It also sets the stage for sustainable growth by encouraging real-time data sharing on profitability, sales data and market conditions.
Reduce customer churn
Customer churn is a common challenge for many SaaS businesses, particularly in competitive markets. Sales teams may focus on acquiring new customers, while finance teams monitor customer retention and lifetime value. However, reducing customer churn requires a cross-functional effort.
Finance teams reduce customer churn by ensuring the company’s SaaS tech stack facilitates a smooth user experience. Churn management also involves sending automated dunning emails to avoid involuntary churn. Meanwhile, sales teams combat customer churn by providing valuable customer success and support bandwidth and feeding those metrics back into finance for detailed analysis. By integrating these efforts into a cohesive strategy, both departments can enhance customer experience and maintain sales goals and financial benchmarks.
Scale revenue reporting
Ideally, finance manages SaaS revenue reporting in granular detail through the cloud. Spreadsheet-based software like QuickBooks can hold companies back by creating manual inefficiencies. Cloud-based reporting enables instant metric readouts and detailed data drill-down on every transaction with every customer.
This allows both finance and sales to spot and act on critical usage trends to achieve the previous two goals—reducing churn and driving profits. Furthermore, with clear KPI indicators available, stakeholders can make data-driven decisions that elevate sales strategy, boost sales performance and keep the organization on track for revenue growth.
Now that you understand the importance of aligning sales and finance, let’s look at actionable steps you can take toward that goal.
How to align cross-functional team processes
When aligning functions across sales and finance, be mindful of both departments’ shared or overlapping responsibilities. These are the areas where you can most effectively foster cross-team unity, particularly in aligning sales and marketing, achieving strategic goals and solidifying team alignment.
Some primary examples include processes such as:
Forecasting
Budgeting
Customer retention
Churn analysis
Pricing strategies
The following steps will help SaaS CFOs facilitate success through cross-team alignment and ensure everyone works toward the same financial and strategic objectives.
Evaluate current sales and finance goals
Bring the two teams together, virtually or in person, and discuss their goals for the coming quarters and financial year. Pay close attention to anything that could disrupt unity or any goals whose implementation might come at the expense of the other team. By identifying potential conflicts early, you can plan for alignment around sales activities that drive performance indicators and shared business growth.
Identify targets
Once each team understands and appreciates the other’s goals and needs, identify concrete targets. These typically include annual revenue benchmarks, churn management, boosting profits from customer upgrades and expansions, and similar KPI measurements. This step is essential—you’ll never reach a business goal unless you define it as specifically as possible. Clear targets help ensure that sales and finance teams remain synchronized on key performance indicators and align financial goals to drive sustainable growth.
Track and measure KPIs
After both teams have agreed on their broad goals and specific targets, the next step is to track and measure KPIs in as much detail as possible. Cloud-based accounting enables sales and finance teams to eliminate manual workflows and use role-based dashboards for total transparency on all KPIs.
If you accomplish all of this, you’ll be well ahead of other SaaS CFOs still treating finance and sales as separate business units. Combining sales data with financial objectives and analyzing KPIs in real time can reveal strategic opportunities for improvement, streamline sales processes and fuel sustainable business growth.
