Key Takeaways for SaaS CFOs
In the latest episode of SaaS Expert Voices, Randy Wootton, CEO of Maxio, interviews Chris Morgan, CEO of LBMC W Squared, about outsourced accounting’s growing importance for SaaS businesses. LBMC W Squared specializes in financial services, assisting companies as they scale from $3 million to $35 million in ARR, especially at the critical juncture of transitioning from cash-basis to accrual accounting.
Chris emphasizes that SaaS companies often need outsourced accounting teams like LBMC’s to implement more sophisticated systems, ensuring financial transparency and control. With the right tech tools, like Sage Intacct and Maxio, businesses can keep track of their cash flow better and run more efficiently.
Any business that wants to talk to investors or the board needs to have clear and accurate financial reports. As Wootton highlights, miscategorizing something like ARR (Annual Recurring Revenue) can lead to confusion, which can then result in investors losing trust in the company’s financial reports. “You go to math camp,” as Wootton puts it, where you are forced to explain discrepancies in the numbers. CFOs have to make sure their reporting systems function properly and present data clearly and consistently to prevent issues.
Morgan further emphasizes the importance of consistency and accuracy, particularly when managing a company’s monthly close. He notes that having a disciplined accounting team and financial controls in place is vital. The CFO is responsible for always being able to see the whole picture of the company’s finances, whether they’re balancing cash, knowing deferred revenue, or taking care of prepaid expenses. Morgan says, “We say we’re audit and due diligence ready at any time.” This shows how important it is to be ready.
The role of the CFO has evolved significantly in recent years, transforming from a traditional back-office function into a dynamic strategic partner within the executive leadership team (ELT). Today’s CFO is no longer just focused on maintaining accurate financial records or ensuring compliance. They are at the intersection of data, strategy, and decision-making, working closely with the CEO and other executives to guide the business through complex financial landscapes.
Modern CFOs have to be skilled at communicating complex financial information to non-financial stakeholders, in addition to managing finances. Wootton says that to help CFOs better communicate, they must master data visualization. It’s easy to want to show detailed financial models, but not everyone in the boardroom is an accountant. CFOs can effectively share information with executives, board members, and investors by turning numbers into clear visuals like trends or graphs.
Morgan says, “Keep it simple when presenting to the board.” CFOs should share clear, high-level insights that tell a story instead of drowning stakeholders in details. The goal is to give enough information so that the board can make smart choices without overwhelming details.
This episode teaches CFOs how crucial it is to align with CEOs and boards, shifting from just compliance to becoming key partners in driving growth. Check out the full podcast on our YouTube channel.
