Client Introduction
“When I joined LiveAction as CFO, the Finance function was under-resourced and under-developed. Anthony and the RocketLabs team helped me build out an FP&A infrastructure from the ground up. I continue to rely on them for all of my FP&A needs including deep analysis around Bookings, ARR, Churn & Retention, Cash Flow Modeling, M&A Modeling, and ongoing Forecasting & Reporting.”
- Francine Geist, CFO of LiveAction, Inc.
Our Process
A Complete Infrastructure Build
LiveAction Hired RocketLabs to build their 2020 budget, it’s a straightforward request we get all the time. It’s also the reason when people as me how long something like this takes I answer from anywhere between 1 to 6 months. It’s entirely dependent on the current state of the infrastructure. The data, the tools available, the responsiveness of the senior leadership team, the processes, and the reporting rigor that’s currently in place are all factors for how long the budget process can take.
At LiveAction it was a complete rebuild that we kicked off by sifting through years of accounting entries to generate an initial view of the organization’s operations and culminated with RocketLabs building the core models, automating several key reports, and transitioning a finely tuned FP&A infrastructure to the in-house team.
Here’s how we did it.
Bucketing Costs To Generate A Summary Level P&L
We discovered pretty quickly that a large part of the problem was disaggregated data. We combed through thousands of line items from several data sources to identify major cost drivers, created summary groupings, and developed a system to map each detailed line item to its appropriate group.
By using vendor level detail to derive the summary groupings we were not only able to highlight major cost centers but also unlocked the ability to operate with greater precision going forward.
Often, this is the most time consuming part of any initial build and while it may not seem it from the outside, it’s also the most critical. A good data infrastructure truly is the only only way to deliver reliable and actionable insights.
Understanding The Past To Build The Future
With a more robust view of historic financials in place we were able to use what we learned to identify cost savings and determine the 2019 run-rate operating expenses essential to maintaining current revenue trajectory.
We used that run-rate to budget a foundation and worked with leadership to model a list of potential investments and associated impact.
Pressure Testing Cashflow
With the 2020 budget and investment plan in place we switched our focus to scenario analysis and planned for multiple outcomes.
We built ground-up Cash Flow Model by analyzing inflows and overlaying sales forecasts then leveraged the approved expense plan to estimate outflows.
We then identified triggered cost savings initiatives to ensure cash-on-hand remained at acceptable levels in each scenario and built additional investment strategies to ensure any capital increases were deployed effectively.
We then created a full reporting suite to present the plan, highlight key inflection points, and allow leadership to easily track progress to make informed decisions.
