Finance spends way too much time pulling numbers from various spreadsheets and source systems together month to month. Whether it’s to prep for a board meeting or complete the month-end close process, finance needs to answer questions about the business at macro- and micro-levels.
Yet finance doesn’t have the time to play the role of a strategic partner to the people that need it every day.
The best finance team, however, finds a way to elevate their role as a strategic finance partner. Instead of just spending time in the back office pulling the right metrics, they focus on financial storytelling (finding the “why” behind the numbers). But it’s a lot harder to extract the “why” when finance continues to be left behind in the financial technology revolution.
Financial storytelling is the overlooked key process between reactive and proactive decisions that help the company grow. Here’s how you can improve your financial storytelling to drive success.
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What Is Financial Storytelling?
Financial storytelling means telling the “why” behind your numbers by building a narrative around the company’s growth. The process involves extracting value from financial metrics and communicating them effectively across the company and with stakeholders.
Financial storytelling really starts with a deep understanding of what the business cares about and getting data in place to track it. Your data infrastructure — the financial technology you use every day — produces your story. If you set up your system properly and record your transactions, the story manifests easily. You don’t have to spend hours, weeks, or months putting the story together — the facts are automated.
That automation frees you up to focus on the narrative. It’s the fun part of finance where you get to dig into the numbers and distill complex topics into a language your business partners and investors can understand.
Financial Storytelling Examples
Effective stories offer an arc, where the protagonist rises to a challenge and works toward a resolution. For companies, financial information plays an incredibly supportive role in the decision-making process. Learn from these financial storytelling examples on how you can make company growth an adventure instead of mystery or thriller through the practical application of metrics and your company’s key performance indicators (KPIs).
Fivetran and the Journey to Unicorn Status
SaaS valuation sets a precedent for any company’s funding rounds — and to get a strong SaaS valuation, you need to know your numbers. When Fivetran was ready to enter a Series A funding round, the board urged the company to get their financial information together. Kalor Lewis joined the company in 2018 as a finance department of one.
Through creating a formal budget and project based around growth plans, Lewis helped Fivetran close a $15 million Series A in his first two weeks with the company. Lewis kept an eye on spending and headcount planning to lead Fivetran into a $44 million Series B less than a year later. And through maintaining strong financial fundamentals amid rapid growth, Fivetran eventually raised a $100 million Series C, solidifying unicorn status.
Gem and the Practical Automation of Their Month-End Close Process
The month-end close process is time intensive, tedious, and crucial to a company’s financial health. Gem Controller Temi Vasco advocates that a month-end close process checklist provides a financial story of its own: of how a company can close the books in as few as five days to ensure more time to focus the larger financial story and company strategy.
As the month-end close calls for the same metrics again and again, Vasco looked at the process and asked, “What is repetitive, and how can we automate it?” Finance automation provides plenty of opportunities to highlight strategic operational efficiency, which excites board members. Alongside setting the foundation for board meetings, your month-end close provides monthly opportunities to dive deeper into “why” numbers change month over month.
Zoom and the Successful Shift of Growth Metrics
In the midst of a global pandemic and market uncertainty, Zoom became a household name. CFO Kelly Steckelberg led Zoom into a projected 314% year-over-year increase. One important growth lesson was to shift the metric Zoom used as a marker for success from active users to concurrent users. This new focus broadened Zoom’s outlook toward making the strategic decision to increase its reliance on public cloud infrastructure.
While Zoom’s public performance has struggled post-pandemic, the storytelling lesson still stands — and there’s optimism that the company can get back on its explosive trajectory.
Zendesk and the Predictable Revenue Model Pre-IPO
Former Zendesk CFO Alan Black knows the importance of financial storytelling. He led Zendesk toward IPO in 2014, and has since advised other tech companies through IPO or M&A. For successful pre-IPO journeys, Black said that financial storytelling begins with an inspection of what you expect.
In the end, it's about being able to explain why something is happening, not just what happened. Because what happened is not super useful in and of itself.
Black noted that for Zendesk, collaborating with leaders across the organization helped build a culture of financial predictability. With a solid financial model and tracking against the right data, Black was about to keep his partners engaged for other business units. Without that type of visible transparency the finance team provided, Zendesk wouldn’t have been as successful as it moved from private to public.
How to Improve Your Financial Storytelling
Financial storytelling factors into nearly every task, from prepping your SaaS board deck and pitch deck for funding rounds to day-to-day operational tasks like the month-end close.
It’s imperative that you have the knowledge and skills to tell your company’s financial story from every angle. Here are seven ways you can improve and build your financial storytelling skills.
Ask the Right Questions
The best compliment you can get from a board meeting is, “You knew our questions before we asked them!” Understanding what questions they ask over time helps you understand the areas they’ll consistently focus on.
What finance metrics do they care about? What is the actual story these metrics are telling us? Do our concerns need to change? These questions help you create presentations full of “a-ha” moments that build toward an engaging story.
There are plenty of metrics to pull for your SaaS board deck and pitch deck. VCs will want to know about your company’s overall health, which you can provide through go-to-market metrics, customer retention metrics, expense composition, trailing twelve months, sales performance metrics, and more. Your board members desire an historical account of last quarter’s numbers, which will focus on any changes to your customer base, your prior quarter’s booking, sales performance, marketing campaign spend, and SaaS quick ratio, and forecasted annual recurring revenue (ARR) and monthly recurring revenue (MRR).
Maintain Consistency Over Time
The value of storytelling lies in extending into the next chapter of growth. Effective stories clearly present challenges and resolutions. Board members don’t want you to remain stagnant — they want to know how you overcome challenges and what you have on the horizon.
But many finance teams make the mistake of changing the story too drastically from quarter to quarter. Even as your story evolves, you want to root it in a similar set of metrics and goals so stakeholders can truly understand the narrative.
Rehearse Your Lines
Your storytelling skills rely on more than just a solid presentation deck. Knowing where your punchlines are — the metrics and big wins that excite your audience — allow you to inflect that energy into your voice and tone.
Questions may range from sales pipeline metrics to headcount planning to balance sheet forecasting — and you need to understand these numbers and their “whys” from every angle. Allow yourself to roleplay with your team and other department leads to ensure you’re hitting the high notes and can answer any potential questions. Share the deck with your executive leaders to gain insight into where there may be holes or what someone would want to dig deeper into.
Get Your Data Infrastructure in Order
Your data is only as valuable as your ability to collect it, aggregate it, and visualize it in time to get people the insights they need, when they need them.
The sooner you get your data infrastructure in order, the easier it will be to scale financial storytelling. There’s no one-size-fits-all way to build a financial data infrastructure. But if you think about it like a framework for FP&A, you’ll be able to bring data together from all corners of the business and keep everyone informed with real-time insights.
Address Any Changes in Numbers
You rely on metrics and KPIs to indicate growth trends — yet they can fall at any time for any reason. When you’re able to explain and own the “why” these important markers are down, you build trust and transparency for your company’s growth narrative.
You want to provide visibility to the numbers across leadership and management. Finance could make the data storytelling fall into high-powered Excel formulas, but it builds a silo where you can’t share the story or focus on the story of why numbers are changing. Especially if numbers are trending down, you want to ensure you collaborate with your department leaders to create a few proactive solutions to implement over the next quarter.
Snowflake had the biggest software IPO ever when they achieved a valuation of over $65 billion in late 2020. When they changed their SaaS pricing strategy to a consumption-based model, they achieved near-total market dominance. Yet they didn’t discuss how the new pricing benefited their business, which resulted in their stock dropping 30%. This is a lesson in how to tell a story and frame it so that people clearly understand and aren’t left to interpret it in their own ways.
Embrace a Customer Service Mindset
One of the best CFO qualities finance teams can embrace is to consider their colleagues as customers and be in service of their peers. A customer service mindset allows you to focus on collaborating with each department to ensure they have the data they need to make the most informed decisions.
Marketing could look at their budgets and consider their ad spend for social media, or dive deeper into how LinkedIn converts potential customers into the sales pipeline. Sales would value knowing where customers begin to downgrade or churn, which you get from evaluating your monthly recurring revenue (MRR). And if the reason for churn falls on product development, your engineers need to know so they can reprioritize their development plans.
Optimize Your Tech Stack
The CFO software stack allows you to engage and dig deeper into your finance functions and daily responsibilities. You must make your tech stack as frictionless as possible to ensure ease of use versus having to jump around your core systems of record for data.
To that end, you need to minimize how many tools you have to reference. More tools means longer review cycles, which keeps finance looking backward instead of forward toward better growth initiatives.
Building a roadmap and timeline for 12-24 months of tech implementation allows for these tools and systems to be put in place when they provide the most value. It’s another point of operational efficiency, which contributes toward overall brand culture, retention, and employee growth.
Financial Storytelling with Mosaic
The role of the CFO is to tell the company’s financial story. The data comes from a lot of different places: the ERP, the CRM, the HRIS, the billing system — the list goes on.
Mosaic connects to those systems, creating an analytic integration that helps measure how the business is performing. Through preloaded templates, dashboards, and metrics, you can build your financial model within the tool that illuminates and connects the changes throughout your financial story, whether it’s month over month or year over year. Each metric and template updates in real-time, so that you have access to the most up-to-date information at every turn.
You can take your company’s narrative from the backward-looking “here’s what we thought” to proactive “here’s what we think, and how we’re trending to achieve our growth goals.”
Request a personalized demo today, and discover how Mosaic can help you write your financial story with more immediate impact.
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