What financial metric is top of mind when it comes to growing a software company? Join us as Marc explains why cash flow is king when it comes to advancing RES Software’s customer-centric business model.
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Key Metrics
“For us, growing the top line is one of the most key metrics, which in our case consists of two underlying key measures: the growth of our license business as well as the growth of our recurring revenue. In addition to this, it’s gross margin … and as we drive top-line growth, we are really reinvesting all our profits to fuel the growth of the top line. It should be no surprise that it’s really the cash flow metric that becomes so important at the end of the day.”
Adopting a Month-End-Close Mindset
“Companies I’ve worked for before RES have typically begun to assess the financials at the end of the month, but there were always multiple opportunities throughout the month to really assess the business. You can assess at midmonth, and this can be done from the revenue side, cost side, and cash flow side. Once you are assessing cash flows on a weekly basis, then the monthly assessment is the same.”
Mentoring Round
“You always need to be looking for key business drivers and measuring these capabilities within the organization in order to determine how to invest in them for the both the short term and the long term. This is really what becomes critical for CFOs … because this is what allows you to connect to your counterparts in the business.”
Book Pick
Behind the Cloud: The Untold Story of How Salesforce.com Went from Idea to Billion-Dollar Company-and Revolutionized an Industry
Interview Links
- Marc’s Site
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