*Check out the full Two by Two Playbook here.*
Original article
CFO Playbook: Mastering metrics and managing boards for SaaS finance success
Key takeaway
- For entrepreneurs: Focus on a core set of 5-6 KPIs that truly drive your business, evolving these metrics as your company grows to ensure you're always measuring what matters most.
- For investors: Look for CFOs who can translate complex financial data into actionable insights and strategic recommendations, as they are key to driving company growth and success.
Summary
The CFO Playbook from Bessemer Venture Partners outlines essential strategies for SaaS finance leaders to identify key metrics, manage board relationships, and drive strategic impact. It emphasizes the importance of evolving metrics with company growth, building a "Financial Hypothesis," presenting data effectively to boards, and leveraging the CFO role beyond traditional financial management. The playbook provides actionable advice for CFOs to excel in their roles and contribute significantly to their companies' success.
Insights
- Limit core KPIs to 5-6 max, focusing on metrics that prompt decisive action
- Evolve metrics as the company progresses through different growth stages
- Build a "Financial Hypothesis" to align the board, management, and organization on key drivers of success
- Present metrics to the board using simple visual systems (e.g., red/yellow/green) and focus on future decisions
- Structure board meetings to balance strategic and operational discussions
- CFOs should position themselves as strategic advisors, not just financial gatekeepers
- Usage metrics are crucial, especially for B2B companies, as leading indicators of business performance
Implications
- CFOs need to develop strong data analysis and communication skills to effectively present complex financial information
- Companies should regularly reassess their KPIs to ensure they're measuring what truly matters at each growth stage
- Board meetings should shift focus from past performance to future strategy and decision-making