How Bitly extended their runway by six months by choosing Sage Intacct

When SaaS or subscription companies hit the revenue goals around Series B, processes that got them to that stage start to break down.  I had the chance to speak with Peter Nesbitt, director of finance at Bitly, about how they knew they had to make a change to move off Quickbooks, when they decided to do it, and what upside they leveraged from upgrading to Sage Intacct for cloud financials.  They found some big business value by:

David:  What​ ​were​ ​some​ ​of​ ​the​ ​things​ ​your​ ​company/organization​ ​was​ ​struggling​ ​with​ ​prior​ ​to​ Sage ​Intacct?

Peter:  The​ ​two​ ​things​ ​Bitly​ ​struggled​ ​with​ ​before​ Sage ​Intacct​ ​were​ ​revenue​ ​recognition​ ​(rev rec)​ ​and​ ​reporting.  We​ ​used​ ​Quickbooks​ ​before​ ​switching​ ​to​ ​Sage Intacct.​ ​ Since​ ​Quickbooks​ ​doesn’t​ ​do​ ​rev rec,​ ​we​ ​used​ ​Excel​ ​to calculate​ ​revenue​ ​recognized​ ​as​ ​well​ ​as​ ​deferred​ ​revenue.​ ​It was very challenging to track invoice changes or credit memos across 800 paying customers and no check on whether SFDC was correct. The​ ​reporting​ ​tools​ ​in​ ​Quickbooks​ ​were​ ​very​ ​limited. I could export a P&L and balance sheet, but everything else was non-existent or challenging to report on. Now​ ​with dimensions​ ​in​ ​Sage Intacct, we​ ​can​ ​do​ ​reports,​ ​such​ ​as​ ​P&L​ ​by​ ​department​ ​or​ ​location.​ ​ Also,​ ​we​ ​can​ ​upload budgets​ ​to​ ​report​ ​on​ ​actual​ ​versus​ ​budget.​ ​ Finally,​ ​the​ ​revenue​ ​related​ ​reporting,​ ​such​ ​as​ ​deferred​ ​revenue​ ​forecast and​ ​revenue​ ​by​ ​customer​ ​are​ ​also​ ​very​ ​helpful.

David:  How​ ​has​ ​switching​ ​to​ ​Sage Intacct​ ​helped​ ​your​ ​company ​improve​ ​performance?​ ​

Peter:  As​ ​I​ ​mentioned​ ​above,​ ​we​ ​used​ ​Excel​ ​to​ ​calculate​ ​revenue​ ​recognized​ ​and​ ​the​ ​deferred​ ​revenue​ ​balance​ ​each month.​ ​ It​ ​was​ ​a​ ​very​ ​time​ ​consuming​ ​and​ ​error-prone​ ​process.​  ​With​ ​Sage Intacct,​ ​each​ ​invoice​ ​is​ ​entered​ ​with​ ​the starting​ ​and​ ​ending​ ​date​ ​of​ ​the​ ​revenue​ ​and​ ​then​ ​Sage Intacct​ ​does​ ​all​ ​the​ ​calculation​ ​down​ ​to​ ​the​ ​invoice​ ​level.​  ​This granularity​ ​ensures​ ​that​ ​each​ ​customer​ ​is​ ​being​ ​invoiced​ ​correctly​ ​and​ ​we​ ​are​ ​recognizing​ ​revenue​ ​correctly.  The​ ​time and effort​ ​saved through superior technology​ ​like Sage Intacct has​ ​allowed​ ​us​ ​to​ ​continue​ ​to​ ​scale​ ​efficiently.​ ​ Further, the​ ​accuracy​ ​around​ ​invoicing​ ​and revenue​ ​reporting​ ​has​ ​enable​ ​Bitly​ ​to​ ​feel​ ​confident​ ​in​ ​the​ ​numbers​ ​we​ ​report​ ​as​ ​well​ ​as​ ​in​ ​the​ ​cash​ ​we​ ​expect to​ ​collect.​  ​Since​ ​80 percent ​of​ ​all​ ​business​ ​failures​ ​are​ ​related​ ​to​ ​cash​ ​flow,​ ​visibility​ ​into​ ​cash​ ​helps​ Bitly continue to build on its industry-leading link management platform.

David:  When​ ​thinking​ ​about​ ​the​ ​processes​ ​you've​ ​streamlined​ ​since​ ​switching​ ​to​ ​Sage Intacct,​ ​what​ ​are​ ​the estimated​ ​time and cost​ savings​ ​through​ ​these​ ​improvements? 

Peter:  We​ ​have​ ​seen​ ​huge​ ​time​ ​and​ ​costing​ ​savings​ ​just​ ​from​ ​the rev rec​ ​and​ ​reporting​ ​piece.​ First off, our monthly close has moved from being four weeks down to one week.  Also, we​ ​save​ ​about​ ​two​ ​days​ ​per month​ ​on​ ​rev rec​ ​and​ ​one​ ​hour​ ​per​ ​day​ ​for​ ​other​ ​reporting​, ​for​ ​over​ ​400​ ​hours​ ​saved​ between two accounting team members in​ ​a​ ​year.

David:  What​ ​does​ ​the​ ​increased​ ​financial​ ​and​ ​operational​ ​visibility​ ​provided​ ​by​ ​Sage Intacct​ ​mean​ ​to​ ​your company?​ ​

Peter: With​ ​improved​ ​accuracy​ ​around​ rev rec​,​ ​we​ ​better​ ​understand​ ​the​ ​projected​ ​cash​ ​flows​ ​to​ ​the​ ​company.​ ​This has​ ​given​ ​us​ ​confidence​ ​in​ ​spending​ ​cash​ ​in​ ​other​ ​areas​ ​of​ ​investment​ ​like​ ​technology​ ​and​ ​people.​  ​With dimensions,​ ​we​ ​were​ ​able​ ​to​ ​do​ ​department​ ​budgets empowering managers to understand spend across categories. ​For example, now we can give specific budgets for software and T&E to each department, like engineering or product. Sage Intacct​ ​has​ ​enabled​ ​us​ ​to​ ​tighten​ ​up expenses,​ ​identify​ ​opportunities​ ​for​ ​savings,​ ​and​ ​provide​ ​transparency​ ​to​ ​the​ ​executive​ ​team​ ​on​ ​expenses​ ​and budgets.​ ​ We​ ​also​ ​implemented​ ​the​ Sage ​Intacct​-to-​Salesforce​ ​integration,​ ​which​ ​now​ ​gives​ ​real​ ​time​ ​insights​ ​to​ ​our sales​ ​team​ ​into​ ​invoices​ ​and​ ​aging​ ​customers,​ ​which​ ​empowers​ ​them​ ​to​ ​identify​ ​churn​ ​risk​ ​by​ ​lack​ ​of​ ​payment.

David:  What​ ​other​ ​business​ ​applications​ ​have​ ​you​ ​integrated​ ​with Sage​ ​Intacct?​

Peter:  We​ ​have​ ​integrated​ ​with​ ​Anytime​ ​Collect​ ​and​ ​Salesforce.​ ​With​ ​integration​ ​with​ ​Anytime​ ​Collect,​ ​we​ ​have improved​ ​our​ ​AR​ ​dramatically​ ​while​ ​cutting​ ​our​ ​AR​ ​staffing​ ​time​ ​in​ ​half.​ ​We​ ​implemented​ ​ATC​ ​in​ ​December 2016,​ ​we​ ​were​ ​able​ ​to​ ​cut DSO in half​ ​and​ ​improve​ ​CEI​ ​to​ ​over​ ​75%​ ​from​ ​50%.​ ​ This led to a change in operational cash-flow of additional months of runway which was like bridge funding but without any dilution in equity or additional liabilities.  With​ ​the Salesforce​ ​integration,​ ​we​ ​are​ ​having​ ​better​ ​communication​ ​with​ ​the sales​ ​team​ ​while​ ​cutting​ ​our​ ​staff​ ​time​ ​to​ ​10% less.​ ​Also,​ ​removing​ ​manual​ ​invoicing​ ​processing​ ​reduces​ ​human​ ​error​ ​in​ ​the​ ​quote-to-cash​ ​process.

David:  How​ ​has​ ​Sage Intacct​ ​enabled​ ​your​ ​finance​ ​team​ ​to​ ​contribute​ ​to​ ​any​ ​on-going​ ​business and organizational improvements?

Peter:  By ​switching​ ​from​ ​Quickbooks​ ​to​ Sage ​Intacct,​ ​we​ ​are​ ​definitely​ ​more​ ​audit​ ​ready​ ​in​ ​accordance​ ​with​ ​GAAP compliance.​  Sage ​Intacct​ ​tracks​ ​changes​ ​in​ ​transaction​ ​level​ ​and​ ​offers​ ​options​ ​to​ ​attach​ ​documentation​ ​for​ ​the backups.​  ​Also,​ Sage ​Intacct​ ​automates​ ​billing​ ​and​ ​revenue​ ​reconciliation​ ​which​ ​is​ ​a​ ​huge​ ​benefit​ ​for​ ​SaaS companies.​  ​Intacct​ ​has​ ​overall​ ​improved​ ​our​ ​financial​ ​accuracy​ ​and​ ​controls.

David:  How​ ​would​ ​you​ ​describe​ ​the​ ​overall​ ​benefits​ ​you've​ ​seen​ ​from​ ​using​ Sage ​Intacct?​

Peter:  Beyond​ ​the​ ​improvements​ ​already​ ​mentioned​ ​in​ ​terms​ ​of​ ​improved​ ​collections,​ ​improved​ ​quote-to-cash, improved​ ​budgeting,​ ​more​ ​accurate​ ​financials,​ ​and​ ​improved​ ​forecasting,​ Sage ​Intacct​ ​has​ ​let​ ​us​ ​scale​ ​the​ ​business without​ ​additional​ ​headcount.​ ​We​ ​expect​ ​to​​ ​easily​ ​double​ ​in​ ​size​ ​without​ requiring ​another​ ​finance​ ​headcount, where​ we ​would​ ​have​ ​certainly​ ​needed​ ​more employees ​if​ ​we​ ​had​ ​stayed​ ​on​ ​Quickbooks, saving us $200,000. 

Peter and the Bitly Finance team have a great story to share, and Bitly continues its leadership in link management. Using Sage Intacct for their cloud financials has increased cash-flow through automated order entry and billing, given collaborative consciousness to the executive team in decision making, and sped the financial close and reporting for accurate views on valuation and SaaS metrics.  

Also, go to our SaaS industry website for more stories just like this:  https://us.intacct.com/software-saas-accounting-software.

[ Published: September 21, 2017 ]