How to Align Sales and Finance Goals Along with Targets and KPIs

Written by David Appel – Sage / April 2023

It can be tempting to think of sales and finance as separate and discrete units within your company. But that would be a huge mistake–especially for a SaaS CFO. Falling into this view leads to massive losses in profits you otherwise could have driven by creating a shared consciousness on funding and scaling the sales funnel.

Instead of viewing sales and finance as completely separate teams, you should recognize that they have strong potential to create a positive feedback loop. If you can get sales and finance aligned and unified on business goals, targets, and KPIs, you’ll unlock growth and be clear on where to invest. 

This article will walk you through that process from start to finish. 

Why finance teams should be a strategic, data-driven partner with sales teams

Sales and finance both have critical roles to play in bringing in new revenue and maintaining it as recurring revenue as you continue to scale. These teams have historically operated in silos, with different priorities and metrics; however, this approach can hinder business performance and limit growth opportunities. By working together, these two departments can create exponential results by combining their strategic strengths.  

One quick note before we discuss the benefits of departmental alignment. 

Cloud based accounting software should form an essential part of your team alignment strategy. It utilizes a single source of truth (SSOT) to allow full communication and data sharing between sales and finance. With an SSOT, team members in both sales and finance will have seamless access to the data they need for their specific roles. 

Once finance and sales are humming along in tandem with an SSOT, they’re ready to execute on critical business objectives. 

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, the two 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. 

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 that the company’s  SaaS tech stack facilitates a smooth user experience. Finance’s churn management also involves sending automated dunning emails to avoid involuntary churn. On the other hand, Sales teams combat customer churn by supplying valuable customer success and support bandwidth and feeding those metrics back into finance for detailed analysis. 

Scale revenue reporting

Ideally, finance handles 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 facilitates 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–cut churn and drive profits. 

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, you must be mindful of both departments’ shared or overlapping responsibilities. These will be the areas you can most fruitfully capitalize on for cross-team unity.

Some primary examples include processes such as: 

  • Forecasting
  • Budgeting
  • Customer retention
  • Churn analysis
  • Pricing strategies

The following processes will help SaaS CFOs facilitate success through cross-team alignment.

Evaluate current sales and finance goals

Gather 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 between teams or any goals whose implementation would come at the cost of the other team. 

Identify targets

After you’re satisfied that each team understands and appreciates the other’s goals and needs, it’s time to identify targets. Most notably, these targets involve annual revenue benchmarks, churn management, boosting profits from customer upgrades and expansions, and similar KPI measurements. This step is crucial–you’ll never reach a business goal unless you specify it as concretely as possible. 

Track and measure KPIs

After both teams have agreed on their broad goals and specific targets embedded within those goals, there’s one more step. Both departments should track and measure their KPIs in as much detail as possible. Cloud-based accounting enables sales and finance teams to eliminate manual workflows and leverage role-based dashboards  for total transparency on all your KPIs. 

If you can accomplish all of this, you’ll be miles ahead of other SaaS CFOs still acting as though finance and sales are separate business units. 

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About TimeLinx
TimeLinx delivers innovative project & service management software as a complete solution that perfects the sell-track-manage-support-bill cycle that services organizations must have to delight their customers; TimeLinx brings the cycle together in a single application that offers less frustration, better project management, complete reporting, and improved profitability – all specially designed for Infor and Sage.