Two CFOs Walk Into a Bar
Welcome to another edition of the Weekly Financial Digest!
Each week, the team here at Lola bookmarks our favorite articles about corporate finance. Then, we take those and summarize them for you.
This week, we're featuring content from Financial Management Magazine, Baremetrics, the New York Times, and more.
Let’s kick this off with a candid discussion from two CFOs about financial transformations.
A CFO Conversation: The Journey To Finance Transformation
Two CFOs walk into a bar…
Surprisingly, this isn’t a set up to a joke. It’s just the set up to this article from BlackLine. Gina McNamara, CFO of SAP ANZ, and Mark Partin, CFO of BlackLine, recently sat down to talk about finance transformations.
According to Partin, a finance transformation is about making finance a more strategic partner to the business. As a strategic partner, finance help growth, decision analytics, and so much more.
Gina McNamara agrees and says that for finance to pull this off, they need to step outside of their comfort zones. Learn new tools and processes and let automation handle the tedious parts of your job. That will free up time for you to focus on ways to become a more strategic partner at your company.
There’s a lot to learn from these two. Tune into the rest of the conversation.
SaaS Pricing Models & Strategies Demystified
Let’s talk pricing for a minute. Pricing is something you should revisit annually. That doesn’t mean you have to redo your pricing strategy every year, but you should take time every year to give it a hard look.
That’s why Baremetrics recently published their in-depth guide to SaaS pricing.
If you’re not sure where to start with pricing, Baremetrics suggests that you use a pricing calculator.
So what pricing models are popular with SaaS companies right now?
- Flat-rate pricing (Basecamp for example)
- Usage-Based Pricing (Stripe for example)
- Tier-Based Pricing (Lola for example)
There’s a lot more to learn from this Baremetrics article. (You might want to bookmark it).
The Greatest Staffing Challenge Facing CFOs
Robert Half recently released their annual benchmark report of accounting and financing functions. If you don’t have time to download and read the full report, FEI Daily sat down with Paul McDonald, senior executive director at Robert Half, to talk about the report.
The conversation centered around attracting and retaining talent because that’s a tough task for finance departments right now.
Specifically, companies are having trouble finding and keeping finance professionals who have 3 - 5 years experience. That’s why you’re seeing a lot of companies highlighting their efforts to becoming more socially responsible.
Social responsibility is an important factor for employees in that range of experience since those employees are likely Millennials and Gen Z.
Read the rest of the conversation from FEI Daily.
Insight for CFOs Struggling With Agility
Attracting and retaining talent isn’t the only struggle for CFOs these days. Financial Management Magazine says they’re also struggling to keep up with the pace of change. It’s easy to see why. New technologies and new expectations are changing the CFO’s role quicker than ever.
If you’re looking to stay agile and keep up with the pace of change, FM Magazine has a few tips:
- Start with manageable goals. You can’t do everything at once. Even if you set a few pie-in-the-sky goals, break those down into bite-sized, manageable goals.
- Anticipate changes early. Development teams often use a management strategy called agile. Finance teams should adopt this same strategy to stay ahead of the curve.
- Use tech to free up time. We’ve mentioned this before, but you should use tech to automate a lot of your tedious, repetitive tasks.
Plenty more to learn from FM Magazine.
A Recession Is Coming (Eventually). Here’s Where You’ll See It First
We try not to focus too much on the doom and gloom of potential recessions in this column, but we do need to be honest: one is coming eventually.
That’s why the New York Times studied a few recession indicators that economists are watching. These indicators should give us an idea of how close a recession is.
First up, unemployment rate. You probably already know that the unemployment rate is low, but economists are watching small spikes in unemployment that indicate a recession has already hit. So far, no one is seeing anything concerning.
Next, NYT looked at the yield curve. When interest rates on 10-year bonds fall below 3-month bonds, a recession is usually coming. That’s already happened.
That’s two of the eight that NYT studied. Read the rest for all of the indicators.
Here’s one to pay attention to: Cloudflare reportedly filed a confidential S-1 earlier this summer and is preparing for a September IPO.
Why does this one matter? Well, one of Cloudflare’s competitors, Fastly, went public earlier this year and had a great IPO. On top of that, profitability probably isn’t far off for Cloudflare -- right now they’re running at breakeven.