CFOs and other business leaders have done it for decades - pouring over multiple, tedious spreadsheets to identify optimum pricing, secure business insights, and run revenue calculations.
This was never easy as the spreadsheets were inherently inefficient, and prone to errors and data leaks. But, somehow software companies used to make do.
That is until the advent of the subscription economy.
Today, B2B SaaS business leaders have come to realize that using spreadsheets to manually keep track of data related to subscriptions, renewals, billings, revenue recognitions, and upgrades is near impossible.
And if spreadsheets still play an integral role in your daily operations, be prepared for data inaccuracies or half-baked insights, which in turn can cause revenue leakages (click here for a webinar), poor customer experiences, or lost funding opportunities.
Spreadsheet software, with their many vulnerabilities and the lack of governance frameworks, can also pose a very real challenge of security breaches. This equals fines and losing the trust of your customers.
All things considered, it's time to retire the error-ridden and unwieldy spreadsheets and choose an AI-powered subscription management solution (SMS) that offers a single source of truth (SSoT) through system integrations.
Read on, as this post showcases how switching from spreadsheets to an SMS will allow you to cut across silos and make strategic and timely business decisions, every time.
What is a single source of truth
Business intelligence to manage your subscription portfolio can be secured from the data that resides within the sales CRM, financial system or ERP, customer support platform, and service desk system. But, these disparate systems only offer a narrow perspective on the business operations.
A single source of truth is built to store master data, from all these different sources, in one location.
Many businesses use spreadsheets as their SSoT. But, that's not good enough if you want to arrive at accurate and up-to-date plans and forecasting models, and attain a heightened level of control over subscriptions.
Enter: A subscription management tool that offers advanced SSoT capabilities.
Once integrated with your source systems, it offers a comprehensive, compliant, error-free and accessible view of your organization-wide subscription data, in one location. And since it's updated in real-time, you get to make more pertinent and informed decisions.
To easily build such an authoritative and centralized single source of truth, it would help to onboard a purpose-built subscription management solution like Younium.
Why spreadsheets are bad for your subscription business
Spreadsheets are a rudimentary SSoT – one that passively and manually captures and analyzes data.
If you are still using this software program, especially as your business is trying to scale, here is why you are fighting a losing battle:
- No real-time data visibility: Since spreadsheets don't get automatically populated and need human intervention, many times data tends to be out of date or inaccessible during certain periods. For example, assume that the client made an early payment. It doesn't reflect in the sales team’s system immediately. So, they will know whether to follow up on the last invoice only when the finance team shares the update with them.
Hence, you only gain a fragmented view of bookings and subscription metrics.
- Plays a passive role in subscription management: Spreadsheets don’t trigger any activity, which makes it a passive database. So, for example, you might make note of an upcoming renewal due date on a worksheet. But you may still miss sending the renewal email and invoices to the client, since the spreadsheets do not send any reminders. This, in turn, leads to a lot of revenue loss.
- Weak data security and governance: The thing about spreadsheets is that it can be downloaded, saved on to a USB or shared on email without any restrictions. Therefore your sensitive business data (including client information) can easily fall in the wrong hands. And meeting compliance and governance mandates also becomes a challenge leading to failing of regulatory scrutiny.
- Issues with data integrity: Did you know that 88% of spreadsheets contain errors? This could be owing to faulty macros, human error with data entry or formulas, or wrongly collated data.
Also, every team may have their own version or definition of the same data and it's difficult to know which data set to use when forming strategy or plans. For example, the start date for a subscription could be the day the client starts using your software in a CRM, while in a financial database it could mean the day the first payment was made.
So when collating data from different sources, the data points could be wrongly interpreted– affecting the integrity of the SSoT.
At a macro level, here is how all these shortcomings of storing all your data on spreadsheets affects your business:
- Dip in business revenue: A very distorted or error-filled view of bookings and subscription metrics could lead to operational errors such as missed or wrong invoicing or renewals, or even the sharing of loss-making quotes. Ultimately, this negatively impacts your bottom-line.
- Reduced business agility: Not having easy and regular access to accurate data and insights, slows down your business’ reaction to market shifts and opportunities. Also, the data management on spreadsheets gets too complex and overwhelming, if your business decides to grow its reach or clientbase. Thus, it limits your B2B business’s ability to scale.
- Missed SaaS funding opportunities: Especially for startups and smaller SaaS businesses, the biggest worry is funding and scaling up. And without the latest metrics you cannot get funding that you deserve.
Bookings and subscription metrics, such as CMRR, ACV, and MRR, tend to be outdated in the spreadsheets which may give a poor or incorrect view of the current and future state of your business. This and bad PR, from lack of compliance with industry norms, could really hit your business’ valuation.
- Confusion between teams: Owing to the lack of a regularly updated repository, different teams will contest that their disparate spreadsheet files feature the most reliable version of the truth. And you end up with no consensus about whose data to trust. Also, owing to the lack of version control, it's difficult to keep track of who changed what in that spreadsheet SSoT.
- Productivity loss: It puts a real strain on stakeholders’ to work with a centralized spreadsheet, only to realize that it was outdated or incorrect. And then, they have to request each team for the updated data, before reanalyzing it.
Also, it's difficult to put business rules on data, easily generate reports or backup the data.
These unmanageable spreadsheet problems are an indication that you need a more dependable, intelligent, and scalable system that brings together your business data.
Yet, as Wolter Rebergen, Commercial Director, Younium points out, “95% of B2B SaaS businesses still use spreadsheets.” This is interesting to note since they also recognize that the tool isn't a very user-friendly or accurate source of data.
And the top reason for not upgrading from spreadsheets is the lack of awareness of a better way to run their business. Learn more about B2B subscription management in our webinar where we cover the fundamentals of how you can gain more for your business with having the right tools in place.