Last Tuesday, Leapfin hosted a cider tasting event focused on educating Finance teams on the best ways to optimize unit economics and pockets of profitability.
Our two speakers were Ian Booler, VP of Finance at Bentley & Co, and Leapfin’s first ever VP of Product, Caitlin Steel.
Ian and Caitlin are both seasoned finance leaders with years of experience in digital transformation and successfully navigating times of crisis. Prior to Bentley & Co., Ian was a CFO at Altitude Sports and Head of FP&A at Lightspeed HQ. Caitlin joined Leapfin with prior Finance and Product experience at companies like Blackline, Xactly, and OpenGov.
At this event, Ian and Caitlin shared their perspectives on how quickly changing business practices have changed the connection between finance and operational data.
They covered the prevalence of margin erosion and revenue leakage in financials and how Finance teams can address these areas to uncover ways to improve unit economics and increase profits.
In Ian’s words:
With the rise of online businesses, there are so many different segments you have to account for. Take the visibility of discounts as an example.
Keeping track of basket discounts, online discounts, in-store discounts, and additional costs can be difficult. These must be connected to the general ledger. Often, costs can be overlooked.
With real-time data being produced by your various systems 24/7, just doing a month-end close isn’t enough. To understand how your business is really doing, you need weekly insights, at the very least, to make better decisions. It practically becomes a continuous close process, and that can be very difficult.
Caitlin added:
It’s a recurring theme. Throughout my career, I’ve repeatedly experienced operational and finance teams struggling to understand what’s really going on. Back when Excel was the only tool used for analyzing finance data, it was difficult to know what business units were profitable, let alone product lines or some other segments of the business.
Despite that, Caitlin and Ian agreed that solving this problem has become much easier in recent years.. As Ian puts it:
We used to work with business intelligence (BI) tools with a lot of unstructured data and a general ledger, but there wasn’t a lot going on in between. This made it difficult to tie operational data to your ledger. In BI tools, you can see things like revenue by customer but not necessarily if there are any add-ons to the cost. You also have to wait for the month-end to analyze your P&L. In industries such as retail or e-commerce, and especially during peak season, you need that data weekly.
With a solution like Leapfin, there’s this middle ground of data that has financial integrity and gives you insight into your business from one place. It makes it easy to analyze data by segment, geography, or product line.
Walking the transaction throughout from beginning to end makes a huge difference
Companies without a purpose-built finance data platform often struggle to understand the data powering the aggregated numbers in their subledger and matching the subledger to the general ledger. Despite that, Ian believes there’s a way around this:
Finance teams need to do the exercise of mapping the journey of transactions. The power of those flows is to help you understand where margin can be affected through the data journey of cradle to grave. The effort of going through transaction mapping and how it’s affected creates value and helps you understand how general ledgers are impacted.
Caitlin agrees:
It’s something finance has moved away from but should address again. Finance teams are accustomed to looking at aggregated data, and that often isn’t enough to understand the entire transaction. As a result, those little revenue leaks add up.
That’s why I love the idea of going back to try to understand the flow of transactions. The exercise of mapping the journey of an entire transaction seems mundane, but it ends up being huge. For some people, untangling all of that data sounds like a scary task, but it shouldn’t be. With the help of a platform that can help you eliminate all the cutting and pasting from accounting, you can make finance a real strategic partner.
Caitlin also underlined the importance of working on the mutual understanding between operations and finance:
On top of being a data guru and understanding the flow of data through a business, people skills can play a very important role for Finance teams. Now more than ever, collaboration and being a better partner to various departments at your organization are key. You need to share the same language to find a path to more profitability.
The discussion was followed by a breakout session where participants got to ask Ian and Caitlin questions about their experience and received actionable tips about making their companies more efficient at tracking finance and operational data.
