Study those who have succeededWe looked at 6 startups that went from VC funding to profitability to determine their secrets. Although having a great product or service is important, that alone isn’t enough to guarantee success. What ultimately leads new companies to profitability is the ability to predict customer needs and proactively devote resources to solving them. This means building a fantastic customer experience into the product roadmap and financial plan from the beginning. Finance professionals are most valuable when they play an active role in decisions traditionally led by client-facing teams. Customer experience and other similar functions directly impact a business’ bottom line, so finance teams need to be involved from the get-go. Virtually no startup can reach unicorn status (a valuation of one billion or more) without the supervision of a great CFO. The startup CFO is not a bookkeeper; he or she is a highlevel, strategic force, a close and trusted adviser to the CEO, and a key player in taking unicorns to that next level of growth: going public. We studied 20 CFOs of billion dollar companies to identify their special sauce.
Learn from others’ failuresIn 2015, biotech startup Theranos was valued at $9 billion, and its founder Elizabeth Holmes was the youngest female billionaire in the United States. Fast forward three years, and Holmes was facing massive fraud charges from the SEC and Theranos had declared bankruptcy. There were several red flags predicting the company’s demise. Holmes fired Theranos’ original CFO and never replaced him, which was an early warning sign that all was not right with the company. Virtual assistant firm Zirtual went from a Silicon Valley darling to a financial disaster in less than a year. The company made several mistakes that forced them to halt operations and lay off 400 employees basically overnight. Both poor policy decisions (they transitioned hundreds of virtual assistants from contractors to employees without understanding the consequences) and poor financial planning (they chose to outsource their financial management role rather than hiring a full-time CFO) destroyed Zirtual’s potentially bright future.
Crush Your Career Goals in 2019
Improve your business processesAccounting automation tools are beneficial in many ways: they save time, reduce errors, allow real-time reporting, and decrease internal fraud. But with so many accounting automation tools out there, it is critical to identify which one is best for your business. Choosing the right tool means understanding what each of these applications do, how they work, and whether they’re a good fit for your particular situation. We provided basic information on 8 of the best accounting automation tools to help you determine which one is right for you. Once you’ve chosen a platform, make sure you leverage it fully. Research how to get the most out of the software (these NetSuite hacks and Xero tips, for example) and see what other apps will integrate with your chosen tool (like these QuickBooks integrations). This doesn’t mean you need to get rid of traditional accounting altogether. Knowing when to use Excel and when to automate is the key to employing automation effectively rather than simply adopting new technology for the sake of it.
Look towards the future
A McKinsey research study concluded that 42% of all finance functions can be fully automated, while 19% can be partially automated. To prepare for this shift, CFOs are identifying which processes can be automated now and in the future, and then reshaping their finance teams accordingly. Being proactive and maintaining transparency throughout the process will set up your organization for a more streamlined integration.But just because some functions will be automated doesn’t mean that accountants are going away. The value of accountants doesn’t lie in simply crunching numbers and entering data, but in the insights they glean by observing those numbers. Automation will free up accountants’ time to analyze the actual accounts and determine how to best maximize financial processes. The future of accounting will see finance professionals leveraging existing and emerging technology to become more strategic and effective in their roles. Because digital companies’ revenue may not be accurately reflected in the current generally accepted accounting principles (GAAP), Harvard Business Review proposed a new blueprint for financial reporting. Based on the idea that the factors driving revenue are often more relevant to investors than the actual revenue figures, these new reporting methods would more clearly define such assets to identify value-producing trends. Knowing the profit implications of a company’s assets will provide a more accurate representation of how profitable the business really is and how profitable it might become.