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Streamlining Order To Cash in a Fast Growing Startup

What’s an ideal O2C process in a fast-growing environment? Who are the stakeholders? What are the workflows? Come explore with us in our interview with Naga Subramanya BB. Naga leads Finance and Legal at Airmeet and is in the middle of the action when it comes to fast-growing start-ups with global customers. Naga is also an avid speaker and has spoken about the rise of SaaS, AI, and its impact on the Finance profession in professional forums. In this episode, Naga discusses what's an Ideal O2C process in a fast-growing startup is like- also touching on Tech Stack, Stakeholders, workflow, and MIS Tracking. Catch Naga here - https://www.linkedin.com/in/naga-subramanya-b-b-a9951411a/

Transcript

Aravind Gopalan  0:08  
This is Aravind Gopalan CEO and co founder of Growfin. Welcome to our series, the cash heroes the place where global finance experts can talk, learn, share and get insights on fast growing b2b environment on cash flows financing topics later.

Today we're going to talk about auditor cash, and in particular as streamlining audit to cash in a fast growing environment we've seen

We've spoken about this enough in the past, but we felt there is not enough information out out there which helps people understand and how to set it up in a fast growing space in a fast growing startup an assassin wonder. And that's why we have Naga today from our Airmeet with us. Naga leads finance and legal at our meet and is in the midst of action. In a fast growing startup environment with a lot of global customers acquiring day in day out. He's Naga is also an avid speaker. He has spoken, you know, in about multiple topics on the rise of SaaS, AI, and its impact on finance and finance professionals in multiple forums. So, welcome Naga to the show. Thanks for having us. Yeah.

Naga Subramanya BB  1:18  
Hi Aravind, thanks. Thank you for having me. Pleasure to be here.

Aravind Gopalan  1:22  
Amazing. So with that said, we'll, you know, get into the topic today. You know, we have multiple sections or, you know, themes of topic that you want to question that you want to talk about. First, we'll start off with, you know, particularly about auditor cash process, right? Particularly on the process part, where, you know, what, according to you would be like an ideal audit to cash process for in a fast growing environment, he changes over time, we understand that, what do you think would be ideal, or, you know, close to ideal, you know, in a fast growing sector.

Naga Subramanya BB  1:58  
So the way that I think about order to cash or any of these finance processes, I'd like, you know, I visualise them as feedback loops, right. So when whenever somebody raises a request to raise an invoice, that is where the feedback loop starts, right, or even at the start of the customer interaction, and essentially, the moment you sign the contract, and getting the cash back is the end of that particular feedback loop. So we just look at all of these customer, or even supplier touch points, as you know, the opening up of feedback loops and how they get close. So and that that framework really helps us because when when we think of it from that perspective, we make sure that the person who raised the invoice can come to know that they received a payment from the customers that they are working with, whether it's customer success, finance or sales, that individual needs to know that, you know, that customer loop has been closed, they've signed the contract, the entire process is completed. So that's how we broadly think of, you know, any kind of financial process, and what we work on is figuring out how can finance get into the picture and figure out how can we complete the feedback loop are facilitated in such a way that you have the kind of information scaffolding in place, when it challenges by multiple different teams, or you don't have like a, like a really mature tech stack, per se.

Aravind Gopalan  3:18  
Make sense. I mean, you know, from first principles, I think it makes sense that, you know, it's closing of the loop the passage of data from each stakeholder, and each stage of the process really makes sense. But if I try to understand, you know, there is no one size fits, all right, in a in a process like this, you have different revenue models, you have different revenue streams, and then there is nuances towards how you approach you know, your order to cash process in general, right, once you close a deal to the cash in the back. So, can you from your experience that add me? Can you give us some examples and anecdotes of, you know, cases that you've seen how you structured, you know, and what is your 80/20 rule? You know, look like when you're prioritising your Odyssey.

Naga Subramanya BB  4:02  
Yeah, sure. So, the 80/20 rule when it comes to prioritising is that, again, first of all, one of the startups fail is because they run out of cash, right? And the best sources of cash is cash from our customers, which is why this is such an important topic. We always are, by the time it's the 15th of the month, right? We start following up with all open invoices that are there on our books. And you know, typically, organisations take two approaches is either a centralised approach where finance or revenue operations take control of the entire, you know, raising the invoices and following up with the customers or you can take a decentralised approach where the sales reps directly raise the invoices and they follow. Right. So what's what's important and what what we need to ensure is that regardless of whether you're taking a centralised approach or a decentralised approach, a come back to my previous point that the respective stakeholders are informed that the customers has paid or not paid so that we follow up with them or stop that service. And be you never give your services to anybody if they're not paying, right. And that's how the product, this needs to be set up, even, especially in a SaaS context, unless you have like a customer contract where you have that they are like an enterprise customer and somebody who is equal 30 to 45 days kind of payment term. But that the first, the first point that we'll need to make sure that our stakeholders understand is that the moment you give access to the tool or the platform, you kind of start losing leverage. However, if you have a contract in place, then the contract needs to have language that specifically says that on payment for X number of days, we are going to cut off access to a platform. So these are some of the basic building blocks when it comes to O2C right. So one is making sure that we are stakeholder knows, what is the process? Who do we need to follow up with and that the feedback loop gets completed. Second, you enter into a contract with your customer. And after the contract, the invoice that is getting based needs to reconcile and specifically aligned with what is the contract? And the third thing is that the contract needs to carry specific language that spells out what is the payment term being afforded to your customer. And what will happen in case those payment terms are not adhered to. A lot of people say oh, it's a legal contract, no, you can you can sue them, you can do this, you can do that. But practically it's not possible, right? If you have like 1000 customers, and none of them are paying or you want to send legal notices to like 1000 customers, it's not something that is typically, we also need to understand that if you're if you're working in like other jurisdictions that are outside of India, legal costs are extremely high, right. So unless you have a series of a few million dollars, you're not chasing somebody and asking them to make payments, just because he signed signed a contract doesn't really make sense. So these are some of the some of the basic things that that we'll need to keep in mind. And that will, that will take an organisation a really long way. Because this way that will make sure that your cash is hitting the bank and you know, the people who have raised the invoices are being followed up with whenever money doesn't come on, like a 7, 14, 30 whatever pre-defined period of time.

Aravind Gopalan  7:17  
Makes sense! To me very interesting, when you said that, you know, that is that is the start that there's two approaches we can take whether it's a centralised approach where the entire O2C comes to the the finance team and the revenue operation operations teams review, or, you know, there's a decent ways approach where, you know, multiple stakeholders can get involved in the entire process, including the sales team and the customer success team, etc. You know, to be part of the process, which which leads me to the next question. And a follow up of that as well, which is when do you think this is more for founders? And you know, first time, you know, first finance hire in a startup, right? When do you think that, you know, founders or finance team should consider streamlining and putting up an audit the cash process and basically educating people that deserve the process should look like, right? And what it takes? When Should people start considering it? Right? Naturally, in early stage startup, everything is about growth, right? It's about revenue first making, simulating your revenue process, then your revenue to cash process comes in, when when is an ideal time to start thinking about it? And how should they think about it? How does the change happen over and evolve over time as well?

Naga Subramanya BB  8:32  
So I will, I'm a very conservative person, right, like, so my answer has a very conservative bias. So having said that, I feel like from the first day, right, the first day you start, you're basing your first invoice, you need everyone to be on the same page in terms of what are the payment terms? What happens if they don't pay? How much lenient you're going to give them? What is the contract? And how are things supposed to look like? Because what is going to happen is that, you know, you can start doing all of this manually without having a formal system in place. But getting all stakeholders on the same page in terms of this is how we do work. And how you need to engage with us becomes very critical. Because otherwise what's going to happen is that as as you scale, and as you get more and more customers, though, while your revenue is growing, your problems are also compounding, right? And these are skeletons that are there in your closet. So if you don't if you don't maintain like a clean AR book, your does it like a due diligence disaster that is waiting to happen, right, then somebody is just going to come review books and say, Oh, you told me a revenue of $2 million. But out of that 1 million is not even recognised and the customers are not using the product. So basically, you're just you know, you're lying to us, and your revenue is actually like $1 million, but you're telling me that it's $2 million. And that's the that is a basic problem that we're trying to address. So from day one, at least make sure that we get everybody on the same page in terms of you need to sign a contract. This is the process to get an invoice raised. And these are the kind of follow ups that will go, it's okay to do all of this manually. But the in principle by the end of the respective stakeholders, whether it's your head of growth, the founders, the finance team, whether they have one or not, and revenue operations is very, very important. So that everyone is aligned, right? Otherwise, what's going to happen is that people will start thinking of whatever they want, and spin it for them, right? So save stuff, start making decisions in on behalf of the company. Now, the sales leads start making decisions on behalf of the company. And only only when somebody comes and puts in a barricade to them and say, No, you can't do this anymore, is when they'll start saying no, we were not told anything, we did not know anything in the first place. So when we're doing what we thought is the right thing. Okay.

Aravind Gopalan  10:48  
Makes sense. I think having a process do and make sense? And how do you iterate and evolve it? You know, whether you bring in systems in place, whether you automated or do it manually doesn't matter? Awesome. So, I mean, this, this study leads me to the next question, which is particularly around since you mentioned that, you know, each stakeholder needs to be aware of the process from day one, right? So can you can you walk us through who are all the stakeholders involved? Right? And how does from the start of the process? You know, who are the stakeholders involved, you know, in your early days, and how those stakeholders involved in the process have grown over time as well. And you know, what does typical, you know, workflows or handouts happened between them, right? And what is their responsibility? What do you expect of them to do while you know performing a particular you know, O2C work, like? Whether it be capturing the data or entering collecting and putting the data in a certain place, etc, etc?

Naga Subramanya BB  11:50  
Sure, sure. See, though, the first thing is that, let's let's answer these questions from both the Centralised and de-centralised approach, right. So when if it is, if it is a decentralised approach, then typically the people who will be making the request to raise an invoice will be the either the account management team, or the sales reps that whoever customer facing and has those interactions. Now, they can either raise that request to raise an invoice either to the finance team, or to the revenue operations team, or they can have an option to generate an invoice by themselves. If they're CRMs are sophisticated enough, if somebody is running a Salesforce, and that is linked to a subscription management tool, they can raise a request to generate an invoice or a quote by themselves. But if that sophistication is not there, those functions will be taken over either with the finance team or the revenue operations. Now, once either of these teams raise an invoice now, there will be like a list of requirements that they will need to fill in, it will be like, who is the customer? What is their address? Where are they located? You know, what is the duration of the subscription? What type of product are they buying, and you know, all the respective product nuances, and mostly all of these informations available in the contract, right. So they fill up all of this information, upload the contract, and the respective team then raises an invoice and sends that to the customer. Now, when when are they sending this invoice to the customer? Here, again, they can be two approaches. One approach is that you always raise the final invoice as since you've already got a signed contract, and you can follow up with the customer for the payment. Right. The second approach is to say that I always need money in the bank, in order for me to initiate your subscription process. If you don't pay me, you will not start your subscription. So again, there are two approaches that can be taken. Now, if you take approach number two, where we say that if you don't pay me, we are unable to start your subscription, it will lead to either your customers having friction in terms of their payment process or longer how they need to be addressed, etc. But in case you're not doing that, in case you're just a simple invoice in that case, then the follow up responsibility will then go back to a finance person who will be responsible or overseeing here, as well as the original person who raised the request in the first place, right? Whether it's the sales rep or the account management team member. So and and that that is the that's the feedback loop. And let's say if they didn't get the payment after 7, 10, 20 days, we ask them and we go back to them and say, Hey, why is this payment not received, or if the payment is received, they need to get a notification either on Slack or an email summary or some way to get that information that there is an invoices out of the 10 invoices, eight of them are paid, and then two of them are not paid. So this is this is typically like the workflow that that could be there and I don't think it will change significantly as as you grow, right, what the couple of things that will change is, let's say the number of fields that you have to fill in when you're requesting for an invoice, the tool on which you're requesting for an invoice or whether the invoice is getting auto generated on a sales force or whatever it is, and the end state But keeping in mind that framework of a feedback loop and every invoice being an open open loop that needs closure will help people think about this in a more structured manner. And once the cache hits the bank, that's when that feedback loop gets completed. And in addition to that, what is also a good practice is to maintain all of your customer contracts in a particular location, right. So depending on your ACV values, if you have small ACVs, you have a lot of customers, you have a lot of customers, and you end up having like a lot of customer contracts. Now, maintaining that and keeping track of it is also important. Otherwise, you know, later when there's an issue, the customer, you need to submit that for audit or due diligence, and those become a concern and are unable to pull out those contracts, etc.

Aravind Gopalan  15:49  
Awesome, I think, you know, be as you mentioned, we, you know, centralised or decentralised how the core principle is, how everyone how everything is in loop, and how the data flows between these different systems is that, you know, the stakeholders involved the different for these two different two different approaches. And make sense. That said, you know, I understand, in the last you mentioned, as a good practice, you know, maintaining all the data and customer contract in one place is helpful. Which, which leads me to the next question, which is, you know, from a process standpoint, or a practice standpoint, and tooling standpoint, people etc. What are the common challenges that you've seen, you know, in executing this process with these people, and, you know, typically challenges that happen during handoffs, etc. And if you have to give one or two key advices, to founders or finance, execs in other startup, fast growing environments, to avoid a particular Pitfall, now, if I do a Time Rewind and put you on your back, I would have probably corrected this, I would have ensured that this was smoother, so that I can avoid this today. Right? If you can point out one or two pitfalls like that, they'll be helpful.

Naga Subramanya BB  17:04  
The first and the biggest thing that I would suggest is be on top of your product catalogue, right? Make sure that you know, what are the products you're offering? How are they priced? And what are the discounts that are okay to be given on that product, right. And so essentially, you need some kind of like a, like a discount matrix, right, which has an he has the approval to discount, let's say up to X percent, the regional lead has up to Y, the head of GTM, up to 3%. So that that is important. Otherwise, people start selling at any any price point that they want, right, because our salespeople tend to be more focused in terms of getting the money getting the invoices raised, but they might not be worried about, let's say, like a gross margin or overall profitability of the product. So that is something to be worried about. So having a strong handle on your product catalogue will go a phenomenal way in terms of hiring clarity for the organisation overall, right, then, you know, what are the products you're selling? What's the price point you're selling? And what are the areas that you can flex and what are the areas that you cannot flex, and who has that ability to flex and who is the person that you need approval, if you want somebody to have flexibility more than what is what is different, I would say that would be like the largest. And especially if you're if you're if you're selling a SaaS product, we will need to make sure that all invoices are always raised as a subscription, whether you're on stripe, or whether you're on chargebee, or whether you're on Jura, all these invoicing tools provide you the opportunity to raise an invoice as a subscription as against a one time invoice. So most people start off with let's say stripe because it's so ubiquitous, and it has awesome API's to integrate with other platforms. So there are also some common mistakes people do is that they raise these invoices as one time. So let's say if I'm invoicing a customer every month, then there's a lot of load on your, you know, whoever is responsible for raising the invoice and they need to keep in mind keep raising a new invoice every month, right? And that has kind of like a cascading effect because then you're unable to track churn or unable to track your average, unable to figure out. So it's always important to have your product catalogue in place. And if you're in a SaaS business, always raise your invoices as subscriptions and never as like one time invoice so that it can either whenever you're migrating to like a larger subscription management tool, this data can be ingested. And also you can you can get your KPIs out of the box when you connect it to like a record revenue to like a chart mogul or whatever. It's

Aravind Gopalan  19:38  
interesting. I think that'd be useful. The one particularly on the product catalogue, I've experienced that in the past a lot on AV discounting, in particular. Awesome. I think, you know, this is this is helpful. I think we've got a fair understanding of you know, as of now how How does the process will look like in a fast growing setup? how it starts? Where does it you know, how does it evolve people involved in it, and the kind of challenges and good practices are involved to ensure that, you know, we have a good process at hand. Now, I'm jumping on to, you know, particularly to tools and tech stack, right. So you have, you have, you know, your processes in place, you have your people in place. And now, you know, when you come to tools, how do you want to think about when you should introduce a particular tool to a particular problem statement? One? And, you know, what are the layer of tooling that you also think about it? So, you, you start with the orders and invoices, and you know, your, your accounting system, then the cash system? It's a dumb one, how do you go about designing? Now, what are the different components, you know, tools that are involved in your overall stack. And if you can talk particularly about audit the cash, they'll be interested?

Naga Subramanya BB  20:57  
Sure, so the typical tool, typically finance tech stack, again, that is also something that evolves across stages, right, so let's, let's say you're talking about like C to Series A, and just the starting of revenue, or monetization, QuickBooks is a great option for the accounting platform. So that when QuickBooks also good, because it also integrates with all the other kind of software's that are out there, so QuickBooks for your accounting software, Stripe for payment processing, and just with these two, you should be good with whatever it is that you're doing, right. So and let's say, if you want, if you want to get like a little bit more sophisticated you want you're trying to find out KPIs, or if you're trying to have like, you know, a little bit more insights that you want to drive. Or, again, if you're working on a SaaS product, then realistically, you want to get into subscription management tools as early as possible. So the lot of people have some amount of confusion in terms of what is the subscription management tool, and how is it different from an invoicing tool, right, so are like a payment gateway. So what a payment gateway does is just accept a payment from a different method, right? Whether it's a bank transfer, whether it's a card, or whether whatever XYZ payment methods, depending on which region of the globe that you're operating in. The billing system is one on top of the payment method where they're able to send like an invoice to your customer, and which allows the customer to have the ability to pay. Now, if I'm talking about stripe stripe does pm processing also also has invoicing, and then something on top of invoicing, a subscription management where you need a tool that does the invoice thing for you also manages the state of the subscription in your product backend. So let's say if I'm, if I'm selling you, me from today, and if I'm raising an invoice on my subscription management tool, what it will do is that in the backend, it will talk to my talk my platform and say please upgrade Irwin's account, and please downgrade Evans account on like the seventh of next year. And it will send you a reminder when it's time for renewal, it will keep track of how many registrations you have consumed, or what are the other different customer touch points, right. So you have a payment processor, invoicing tool, or subscription management tool. And on top of everything is the CRM, right? So the way you structure and organise your CRM, again, it's going to go a long way, first in terms of keeping everyone together, and also making sure that everyone has like the right visibility of the customers. So the entire, the entire funnel in terms of who your customers are, how they're coming back what their behaviour patterns are, should be captured on your CRM, your CRM should talk to your subscription to your accounting tool, and that typically would be like an ideal finance tech stack, what will typically happen is that a company will invest in a CRM, the CRM will not be properly configured. So depending on how every region, they will configure a CRM their own way. So you will not have like consolidated reporting. So they'll be somebody who is extracting these reports out, consolidating them on an Excel and submitting them to different people. And that those now is where you come to those points of failure, right? Because you're not consolidating data in a single place. You don't have a single revenue, proof of truth, right? You don't have one place, which is like the truth for revenue, the truth for customers, which is why thinking about all of these things, and how they interact together becomes very important so that you don't have to keep going back and forth with your different stakeholders and say, hey there when he was like, you know, he had like a million dollars in revenue this month. And that guy is like- hey I thought it was like a million and a half and what what is the problem? And then you realise that, you know, the way it was invoiced or what happened or whether it came in on the last day of the month. There's a timezone difference of what what is the issue that that is really causing the difference to arise?

Aravind Gopalan  24:52  
Makes sense? I think, when it comes to tech stack, right, and tooling, the the flow of data between these different tools is extreme. You know, how do you marry these different tools together and also, you know, married along with the process that you have, either that's extremely critical on, you know, capturing the data in one place and then getting insights. So I know typically when in a business system scale standpoint, there is, you know, they talk about the different layers of systems that you put in, right, there is a system of record software, as you mentioned, you know, CRM being one of the critical system of record software, QuickBooks which, which is an accounting software being one of the critical system or record. So, do you use any, you know, other layers, which is, say system of engagements, offers that help you automate some of these workflows, save a lot of time, you know, make the process more streamlined by by being on, you know, your system of record? And also, any system of intelligence offers, which now you capture data, and then you derive insights? And then you pull up reports? Is there any tool that you use today? And would you recommend any extra critical users?

Naga Subramanya BB  26:05  
Sure, sure. So in terms of the system of intelligence, right, so the tools that typically come to mind like this, this chart model right there, they're like, they're like the leading platform. But for your chart mogul to work? Well, you need to have configured your invoicing properly, you should have raised those invoices as subscriptions, you should have done all those other things in order for chart mobile or any data to kind of ingest your software. So the first point or like the major point of failure, is just at raising the invoice that you're not raising the invoices itself the right way. And again, depending on the size of your ACVs, this can be like a huge problem for some companies, or this can be like a, you know, non issue for some other companies. And that is where like, that's when the ACV range for a customer becomes so important because it impacts the scale of your revenue operations. It impacts the way you analyse your business, it impacts the way you do ar and it just touches each and every touchpoint of your entire like order to cash cycle or any finance process overall. Okay, I missed earlier question. Can you just repeat the earlier question that you asked?

Aravind Gopalan  27:16  
Now, as I was asking, more long, not just on system of intelligence, or we also had, you know, system of engagement software's where, you know, people can engage, collaborate, and then, you know, automate some of the workflows and help you streamline and get that visibility over and above your record software's? Have you have you had instances of, you know, putting any, any tool in that regard.

Naga Subramanya BB  27:37  
Now, obviously, you know, that we're working with you or when that for us to enable that this system of engagement software, right, we are, we are working with you for implementing Growfin for framing. So that that really helps us out, because you don't have to have this conversation on slack on disparate channels, right, you don't have to worry about different different people using their own mode of communication, we can, again, tell people that if you want to know about your invoices, you want to know about your payment status, is this come to this one single place, and it is always going to be updated. And you can also reach us that.

Aravind Gopalan  28:12  
Great. Makes sense! Happy to engage on the front. So one interesting question that I have for you here. Right. So this is related to spreadsheet, right? We all love spreadsheets, obviously, I use spreadsheets a lot, right? And I've interacted with in France, folks love spreadsheet delight. So what I understand from you that, you know, spreadsheets solves a lot of problems. But from your instance, from a stack tooling standpoint, right? Have you had instances where, you know, you've you've seen people have outgrown spreadsheet in a particular workflow or a process in managing seven process, right? Be it you know, people involved where it becomes Superman Well, or it becomes, you know, the data is not captured in the right fashion by you can have an religions layer on it, as you mentioned. So can you talk talk about when people should consider, you know, what are the, what is the silver line? When should they consider like, Hey, I think you requires dedicated software for this more than a spreadsheet.

Naga Subramanya BB  29:19  
In startup land, people talk about doing things that don't scale, right. And finance is one of them. Because we're always in the back back end, nobody's thinking about us. Nobody thinks about cash flow, nobody's thinking about reporting, everything is just about growth, growth, growth, customer, customer customer. So that is where we start, right. And as you start and things start getting out of hand is when you figure out that okay, you need to consider a tool or a solution to solve this problem. There, the way that we look at things is that is this a problem that is going to grow linearly or is this a problem that is going to grow exponentially? Right and how is that tied back to our own growth plans and Let's say if we have like an exponential growth trajectory, then what are the things that need to do today on this for the legal finance side in order in order to support that kind of growth, right. And at the end of the day, it's also important to figure out that what what are the metrics that we're trying to move, right. So if I'm, if I'm using a tool, and that is making the life of my sales rep easier, even if it is an hour, two hours, I expect some kind of benefit, because they're able to shave off that portion of time from their sales cycle. That is the value that we see. And it may not be something that will happen today, it can happen 1, 2, 3 months down the line. And it's important for us to keep thinking about it. Because the the nature of the work that we do is that the ground on our feet, the ground that we're standing on, keeps changing, or crumbling, or getting rebuilt on, like, a sustained basis. So it's important that we forecast and figure out okay, will this process work? When I'm at 2x? My scale 5x my scale 10x My skill? And is it something that I'm able to manage? Or is it something that I'm able to, like, you know, cry tears of blood and finish? And for the most part, we ended up crying tears of blood, and then only we have like a tool, right? Because that is the nature, we want to understand what are the ins and outs of the tool? What are the things that we wanted to do? What are the what are the key failure points? What are the what are the expectations of the outcomes that we want a tool to achieve. So we always end up doing stuff manually understand the problem, so that we have a much clearer understanding in terms of what we want from the tool. But if you don't do that manually, if you don't do that initial processes that don't scale, then you don't really know what you're looking for, in your, you know, the visualise solution, right, and you might just be pigeon holed into whatever your specific vendor is selling you. And the nature of the problem is such that it is just weighing you down, right? So there, if you have like a tonne of customers that you need to follow up with, you don't have a tool, you don't have anything in place. The only thing that is there on the mind is, how do I get this problem out? Right? We don't think of a comprehensive review. Nobody engages like a SaaS negotiation provider or somebody to help you figure out what are the alternatives are the thing that we're focused on, unfortunately, is just on how do I take care of my short term misery. But my approach, but also thinking that, you know, I'm going to think long term, but I'm also gonna do things that don't scale, they're able to have like, a much more holistic understanding of the problem that we're trying to solve, and which is a tool that could potentially solve for us, and whether it will scale for us going forward as as we grow.

Aravind Gopalan  32:47  
Interesting. I mean, genuinely, just because, you know, you have to fail for us to understand where you want and learn. How do you want to even look at coming up with the solution? You know, that's, that's awesome. That That leads me to the next, you know, section, the final section, which is more on metrics, and how do you measure your overall performance of your process today? Right. So can you quickly talk about, you know, how does your amyas What are the key metrics that you think that you need to track today? With a superior O2C process? I understand it's a SaaS business in a SaaS, non SaaS. That's one and then two, analysing your, you know, this data on improving your performance, what are the key reports that you generally pull up? And you know, what, what frequency? Do you look up? Look at it? And then what are the actions of looting? So that's, those are my two questions here.

Naga Subramanya BB  33:43  
Sure. So let's start with just the first the most important metric, right? The most important metric is cash collection. How much cash have we collected this month? And why is it different from the next month? Or why is it different from the previous month? How much is it going to be the next month? Cash is the most important thing. It's the life line of any business. And the moment we start talking about cash, right? And the beauty is that the moment we'll touch upon that as a topic, you're able to kind of cut across the entire organisation. You just start with, Okay, why is this invoice due? Then you might find out the customer never signed a contract. Then you find out the sales rep was working on it went on leave. And then you find out the account was not assigned to somebody else on HubSpot, and then you find out oh, I don't have a HubSpot in the first place. Right. So that that is the beauty of it. Because like the moment you find an issue, then that that's a phenomenal opportunity for us to figure out you know, where the entirety of that invoice the process broke, right? So the first metric we look at his cash flow, forget everything else, just plain simple. Cash Flow money that has picked the bank. Why is it why is it different? What are the things that are getting? That's the first thing the second As we look at, we look at our sales cycle in terms of how long does it take for somebody to complete a sale? And when we're looking at the sales cycle, we break that down into a sales cycle, which is after customers in principle sign off, right? So if the customer has signed off, but I still took two months to raise an invoice, what happened wasn't because it was stuck with legal was it because it was stuck with it due diligence? And so that that within the sales cycle, what is the area that we can influence? And how can we cut that short? And then the third thing is we look at our day sales outstanding, right? How many days a particular invoice is outstanding? And why is that outstanding for that Trump? So these are like, typically the key metrics that we look at when it comes to our audit to cash process. And we are always trying to figure out how can how can we optimise this? And what what outcome to that and see for us?

Aravind Gopalan  35:53  
That's, that's informative. So just quick thing here. How do you measure these numbers today? One, and in what frequency? Do you generally look at this data? And is there can you give me one anecdotal example of, you know, any corrective action that you've taken based on you know, looking at an insight from this data?

Naga Subramanya BB  36:15  
Treasure, so we'll be start following up on all our open invoices by the 15th of every month, right? So from from the 15th, I get like from the 15th to the 20th. At least I get like a weekly report in terms of how much we are in cash collection, from the 20th to the 30th, the frequency is bumped up, I get like a daily report in terms of how much cash we collected on a on a day to day basis. So depending on what time of the month, it is the frequency of our follow ups go up, right, whether it is internal for our internal customers, whether the sales, sales teams or the revenue operations who are raising the invoices, or whether it is to our customers. So depending on what time of the month, it is that that's how intense we get with our code to see and where where the invoices are.

Aravind Gopalan  37:03  
Makes sense, I think, very similar journeys and, you know, conversations I've had with buyers, right. You know, I believe that, you know, these are the end of the day, as you mentioned, cash, basically tracks everything towards an end, generating insights out of your cash flow impacts your overall business. It's not just, you know, understanding now. Thanks. Now that's been super insightful. I think we have had a tonne of insights from the conversation that we had so far. But before I leave you, I have quick four questions that I want to shoot out with the rapid fire round, where you know, this, just shoot out the answer that you get double the wind when I asked you these questions, works. Great. Sorry. Awesome. No, I asked you. Are you in for it? Yes. Yes. Sure. Awesome. So at what time do you start your day and end your day? And what is your typical workday look like?

Naga Subramanya BB  38:05  
I start at 9:30am end it at 11:30pm. That is how my typical workday looks like.

Aravind Gopalan  38:13  
Wow, that's that's a long time. So you how much how much sleep do you get?

Naga Subramanya BB  38:18  
I get eight hours of sleep. I can't function without my eight hours of sleep.

Aravind Gopalan  38:22  
Okay. That makes sense. Great. So if you have to suggest a podcast blog, or a book for a finance exec who's joining a SaaS for modifiers growing environment, what would that be?

Naga Subramanya BB  38:36  
The SaaStr Podcast

Aravind Gopalan  38:39  
awesome. I listen to that I'm yeah, I've listened to probably every episode that I'm missing I would recommend that as well folks. And then if there is any other skill apart from a core finance skill that you recommend other finance execs, who are joining a SaaS or a fast growing startup environment, what would that additional skill be? Adaptability. Okay, interesting. My final Rapid Fire question. Let's say you have a magic wand and you go you know, a few years back and if you want to take a different call or a different take or you know, choose a different path be personal or be in work or meet anywhere right? What what is the call the durability? What you changed?

Unknown Speaker  39:29  
I would have joined the SaaS startup we earlier in my life

Aravind Gopalan  39:33  
Okay. Great with that with that we are we are at you know the show. Really have great having you here. Thanks for taking the time. You know, really insightful and amazing to talk to you so far.

Naga Subramanya BB  39:47  
Thank you. Thanks. Thanks for giving me the opportunity.

Aravind Gopalan  39:49  
Yep, absolutely.