We were recently joined by three experienced CFOs – Corinne Hua, Chris Sands, and Marc Zablatsky for an online panel session titled “Spend Management and Driving Growth in 2020”.
In this session, we explored how finance leaders can drive growth through spend management, how to increase internal controls through a clear policy and approval process around spending, and how to approach change management from an executive level.
Business spending tends to happen in silos in organizations. While marketing is busy spending money on advertising, other departments like IT, HR, and Operations are also chipping away at the company budget.
Without a clear understanding of how money is being spent, it’s easy for a company to run into trouble—and run out of cash.
Many SaaS startups who were not able to adapt quickly to the changing economic conditions have unfortunately gone under in 2020, or at the very least, have locked down spending due to the lack of funding and loose spend controls.
As a founder or CFO of a software startup, understanding what people are requesting, where spend is going, and how spend is being approved can be the hidden lifeline of your company. Every dollar saved will maximize in value because these dollars can be reinvested in programs to grow revenue and extend runway.
Downturn or not, spend management gives companies greater control and oversight over the use of company resources so that they can be used for more strategic initiatives to grow the business.
In this session, we went over:
- How to monitor spend and budgets effectively to extend your runway
- How to establish a spending policy that is at once fair but catches spend leakage
- Ways to implement cost controls around spending that is proactive, giving spend visibility to committed purchases before the invoice even arrives
- How to increase internal controls through an approval process around spend, and how to approach change management to get your team on board
Here are a few of the top-level takeaways:
“How is efficiency driven through an organization? It’s really around standardization, in my opinion.
Think about what the world looks like in a recession – now is a good time to get discipline around some of our process metrics, define what’s important to the business, define what success looks like against those metrics, and really manage to it in a repeatable way and kind of build the culture around performance against those metrics.
So I think during a recession, when you’re maybe less focused on driving the absolute most amount of growth is a good time to look at some of those efficiency opportunities.”
Chris Sands, CFO of Mineraltree, on how to leverage a downturn as an opportunity to drive efficiencies
“We planned for different top line outcomes that considered new sales, what would happen to our existing customer base, we stress tested cost structures against various assumptions, and made sure we were prepared to weather all those scenarios.”
Marc Zablatsky, CFO for Startups at Burkland & Associates on action plans that leadership laid out during the downturn
“Have a longer term vision, whether it’s a couple quarters or a couple of years. At least it aligns people on what the company is trying to accomplish and how your team can get there. Once you have that plan, it is amazing what happens when everybody starts working towards that plan.”
Corinne Hua, CFO of Thinkific, on how on a growing tech startup can continue to drive towards profitability
As a bonus, here are a few other resources. Since we only had a short hour to cover the topic of procurement transformation, we hope you find these valuable!