We’re Ellen and Simone. After 36 years in finance, we’re ready to share what textbooks won’t tell you.

💛 Welcome to The CFO Playbook – your practical guide to real-world finance insights. A bi-weekly newsletter we’ll send out every other Thursday. The full read will take approximately 5 minutes. If you’re enjoying the newsletter, we’d greatly appreciate it if you shared it using the “Share the Newsletter” button at the end of this email.

📖 READ OF THE WEEK

Data-driven decision-making has become a buzzword, but what does it really mean for finance teams, and why does it matter?

It's simpler than you think.

At its core, it’s about using data to make smarter decisions, especially when it comes to where and how you spend money.

In finance, you don’t NEED tons of data to handle basics like invoices and reports. But let’s be realistic: Apart from the fact that you can train a machine to do most of this work, what value are you really adding for the organisation if you purely focus on transactional topics?

What if you go beyond the basics?

The true value comes from using (all kinds of) data to make strategic decisions that move the business forward.

Now, do you want to add value or keep processing invoices?

A finance team focused on value is crucial for data-driven decisions.

Finance sees the big picture and has a great view on the organisation as a whole. On top of this, finance teams can provide accurate data to help leaders make better decisions.

By integrating data from different sources, finance creates a Single Source of Truth (SSoT) for the company. SSoT at its core means a centralized repository of data that provides a consistent and accurate view on an organisation’s data. It basically ensures that everyone in the organisation has access to the same data. What is important here is consistent data across the org (we will speak more about this in the upcoming episode of this Newsletter).

What does this mean?

The modern finance team is value-driven. It looks beyond just financial data and serves as a Business partner: 

By teaming up with other departments and sharing our perspective, finance can help them make smarter decisions. This partnership makes sure everyone’s on the same page, even if they’re not in love with numbers. The result? A team that’s aligned and making the most of every resource.

Well, how does this work in practice?

Example: Data-driven collaboration between Finance & Sales

Case: the finance team analyzed historical data on Customer Lifetime Value (CLTV) and Customer Acquisition Cost (CAC) for two customer groups: enterprise customers and SMBs.

Findings

• The teams find that Enterprise customers (Large organizations with hundreds or thousands of employees) had a higher CLTV/ CAC ratio than Small and Medium-sized Business (SMB) customers which means these are more profitable in the long run

• The sales team spends 70% of their resources on SMB and only 30% of their resources on enterprise customers.

• Enterprise customers are not analyzed in more detail using industry, size and location.

Changes implemented

• More resources shifted from SMB to enterprise customers (yes, we are aware this needs training 😀) leading to 60% resources spent on enterprise customers

• The most sticky and profitable customer segments are identified within enterprise customers

• Sales & marketing efforts are more focused on winning these types of customers

• Both teams agree to track and discuss KPIs in regular meetings

Impact

• CLTV +19% → due to an increased Average Revenue Per User (ARPU) and lower churn rate.

• CAC -15% → due to a higher conversion rate and shorter sales cycle.

• The CLTV/ CAC ratio of enterprise customers increased from 2 to 2.8, meaning the company is earning 2,8 Euros for every 1 Euro spent on acquiring an enterprise customer (which equaly 40% uplift).

• The revenue of enterprise customers increased by 42% y-o-y.

But don’t be a grinch...

We are NOT suggesting Finance should be the guardian of the holy grail. We’re all about SHARING reliable and objective data to enable everyone in the organisation to get the big picture and make smart decisions.

💡 QUICK INSIGHTS

The Good, the Bad, the Ugly - Shared Learnings

Proactively manage your stakeholders

In Finance, we are oftentimes very focused on running daily operations and building the finance function of tomorrow - which keeps us from taking a step back

One thing we rarely take time for is to think and reflect about our key stakeholders in a structured way and INVEST in key stakeholder relationships. Start today by:

• Running through your daily business and projects and identify most important five stakeholders.

• Ask yourself: what are you doing to engage with them? Have you established a relationship of trust and rapport? Do you know their (current!) expectations?

• Schedule a coffee chat to touch base and receive feedback. Check in on a regular basis.

Must-Watch Finance Tools and Their Latest Fundings

Tabular - AI Autopilot for Accounting Firms

Investors: a16z, Accel, Index, YC, GV

💼 JOB SECTION

We’re connecting companies with the right candidates based on key criteria

• Remote work

• Salary expectations from both sides

• Technical skill set match

• Career growth opportunities

Companies: Register here
Applicants: Register here

Let’s find your perfect match!

🕵️‍♀️ EASY QUESTIONS - DIFFICULT ANSWERS

READER QUESTION OF THE WEEK

Question: What does “value driven finance function” mean?

Answer: Well, we could write a whole newsletter about this (which we might at some point 😄). If we boil it down:

A value driven finance function helps an Organisation and its people

• To achieve their goals and create value for the stakeholders

• By providing useful and reliable information, (forward-looking) analysis and advice.

Got a burning question? Send it to: [email protected]

UPCOMING READS OF THE WEEK

• Why a good data set-up and data governance matter  

• What can Finance do to promote data-driven decision making?

CLOSING REMARKS

Thanks for reading! If you enjoyed this edition, feel free to share it with your network. 📮 

Send your feedback, suggestions, or requests to feature something in future editions to [email protected]. We’d love to include your input.

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