XACTLY WEBINAR - Month End Close

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  • Theme of slide- Finance team roles are changing and with it bringing new types of challengesNot just the same routines of accts payable, AR, and closing booksBecoming an integral strategic partner for the entire organization needed to help strategic direction and give insight to the org.New pressures and here's what finance leaders are saying in a study conducted by IMASo this clearly shows finance teams are under pressure to provide the insights, needs the process and productivity to deliver a lot in a time crunch and really want and need to improve on the reporting cycle
  • SO let’s dive into the issues and challenges on the reporting cycle a but furtherTheme of slide- The key challenges of the reporting cycle make it difficult to successfully deliver on the important area of improving the management reporting cycle. Looking at more revelations from the IMA research we see a few areas that cause challenges:First: is timeliness of reports and analysis No wonder when you have inefficient processes. With pressure from, management team and investors and the need for instant results this makes life more difficult for finance teamsSecond: Integrating multiple data sources. If you’re a growing company you certainly are using many applications..SFDC for CRM, SAP or NetSuite for ERP and many other applications. IT can be difficult to get and integrate data from all these systems to help paint a picture of how your company is doing. We talked about the added pressure on Finance teams. This is one area the evaluation and purchase of business applications that is starting to fall more squarely on the shoulders of the Finance teams.Lastly, the time required to close the books is an enormous challenge. There is a time pressure to get it done, and more importantly, be accurate. Another study was done with similar type of companies and believe it or not about 12% of the companies surveyed said it takes them longer than 3 weeks to close their books.So a lot of pressure from internal and external sources to deliver information and analysis that is accurate in a short time frame and doing with your data spread out all over the place really makes successfully completing the reporting cycle very challenging.
  • Theme of the slide: Closing the books and getting them out in a timely fashion is one place that has to be correct!And of course it has to be accurate and you are not allowed to make any mistakes. This is one area where 99% correct is not good enough.
  • Simple transition
  • Theme: Closing out Incentive comp creates its own reporting and end of period challengesClosing out incentive is part of the period end close you may do your incentives monthly, quarterly or annually. Regardless of what timing you use to incentivize your sales team it is always going to contribute to the challenges and complexities.And those complexities are numerous and have same of the same root cause problems as the general reporting closeHow do you figure out the accrual. What is the amount and how accurate is it. Who is included in what deal. What are accelerators on the deal that have to be accounted for. Is the information your using, which is probably in a spreadsheet, correct. IS it the right version. I bet you have worried about these same questions.2. Next is the sales reps commission statement. OF course your reps want to know what they’re getting paid and why. They’re probably doing their own accounting on it. If you’re lucky your sales ops or camp admin can get these reports created but not likely in a timely basis and not without checking for accuracy. And guaranteed reps will be standing outside your office questioning reports if they’re lucky enough to get them.Lastly time pressure of payroll. You have to get the commission calculated and sent to payroll and that payroll has a time commitment to it. It is really difficult to get reps paid their commission on the very first time pay schedule after the period ends because of all the reasons we have discussed. And the longer you delay in paying your reps the less impact your incentive compensation has. And the great reps will not be happy about it. And you want to keep your best reps happy in order to continue driving performance.Transition: Overall you have a lack of visibility across the organization and risk in the accuracy of your numbers not to mention getting. So what causes these challenges in the incentive comp piece of closing your books .
  • You will see the causes of incentive comp pain again find their foundation in many of the causes of pain in the general closing of the books:First, you have high errors rates and need to check and double check. IF you’re using spreadsheets Gartner research shows there is between a 3-8% chance of error. If you pay $1mm in incentive comp annually that could be about $80,000 lost from these errors.Second, you need to build accurate commission statements for all your reps. The time consumed to develop and make these accurate for one rep is significant. Now do it for twenty reps or fifty reps. And enjoy having all those conversations with disgruntled reps who think they’re statements are incorrect.Third, the ever present problem of data integration to get the information needed to calculate the commissions and statements. About 70% of finance leaders in that same IMA research study said they integrate data with Excel spreadsheets. SO If you do that you are not alone…but it doesn’t make it a good solution to your problem of needing accurate data, mitigating risk and wasting time on inefficient data collection.Lastly, determining who is involved in deals is another enormous pain. If you run incentive comp for your company you now how challenging this can be. Different people involved at different levels. You may have a rep but also an ADR or sales engineer involved at different levels. You may have a BD person who helped with an introduction and they’re camped of that. Lots of variables you need to make sure you capture.And that IMA research study again shows how finance teams biggest challenges in getting the books closed and nothing new here. As you see in this the #1 reason is excessive manual effort. And these pieces , unless you’ve got a streamlined process you control, contribute to the manual effort.
  • So now we have talked about all the issues and demands that make closing books in general and for incentive comp specifically very difficult so now we want to bring some solutions and then bring Joe Consul into the conversation and have him talk to you how we do it here at Xactly.First, have your CRM and other systems like ERP talk to an incentive comp system like Xactly. The information and data you need is typically in these systems and our needed to calculate your incentive comp. They also have structure that you can leverage to make processing comp much more streamlined fashion.Real time reporting- Data is constantly changing especially at the end of a period. Having that information in real-time so there is visibility across the organization from rep to management team.Forecasting with what if scenarios will help with accuracy and understanding impacts of varying business results. Automate calculations- By eliminating spreadsheets and using a calculation engine that are structured to handle changes easily will do a ton to both increase accuracy and take the load of managing spreadsheets.
  • To demonstrate this a little bit let me share with you the viewpoints of two different types of finance teams. These results are from a survey done by CFO Research from CFO publishingOne that has its systems integrated represented in blue and one that has separate systems using manual processes to get data together. And the results are pretty clear. The integrated system teams believe they are much better prepared and have more confidence in the data.
  • Integrate Applications:-At Xactly we use Salesforce and use opportunities data and closed won deals to pay compensation. We use our Xactly Incent Express solution to run our incentive compensation and ADP for Payroll. Integrating these systems together allows for smooth worfklows and reduces the amount of manual processes,Real-Time Reporting- Using our Express offering we can see what the cost of our incentive compensation will be as we move through the period. We have visibility using data from Salesforce and our Express incentives calculations to estimate our costs. This means we won’t be surprised at the end of the quarter. There are stories of companies, even public companies who have missed their earnings estimates because they had incentives come in significantly higher due to better performance on “accelerators” and negatively impacted profit.Sales Dashboards: The real time information also helps our sales team. This also allows our reps to see their commission statements any time they want. Our sales operations person…and there is only one.. doesn’t have to continuously run reports for our reps. Ask yourself how many times a rep asks for commission statement to be run? Exactly! and more importantly, our reps don’t do their own shadow accounting on a spreadsheets. They trust and have confidence in the numbers they are seeing as the quarter rolls on. And they focus on selling, not accounting.
  • Speed up Close: Using these systems together we closed our quarter in five days. We are not open of those 12% companies that take longer than three weeks to close. Also, we get rid of many of the manual processes that happen during closing out Incentive compensation. This allows our finance team to focus on analyzing and helping the business, not doing things systems can handle easily.How many people do we do this with?? This helps us mitigate the risk that comes with unexpected high accruals from compensation. Get ACCURACY & ENGAGEMENT:An example of accuracy this most recent month that demonstrates how helpful getting visibility during the month or quarter and accuracy are tied. This quarter our estimated incentive compensation cost, which was in six figures, was off b $8..Yes $8. And again we do this with one person running our sales operations team..use the term loosely. So he is not spending hours upon hours running spreadsheets and checking formulas like we know a lot of sales ops and comp admins doREWARD ON TIME:We pay our sales reps within two weeks or the first possible pay check they get after the quarter closes. Reps don’t have to wait 45 days or two months like some companies have to. This leads to better reinforcement of tying the behavior to performance and ultimately performance to supporting the company goals which is the reason for making the incentive compensation investment in the first place.
  • review----- Meeting Notes (9/24/12 14:17) -----
  • Need to call to action and express or xactly product slides
  • Need to call to ation and express or xactly product slides
  • XACTLY WEBINAR - Month End Close

    1. 1. Month-End Closing On Time With Control 8/14/2013
    2. 2. HOUSEKEEPING How to participate You can join the audio for today’s conference by selecting “Use Mic & Speakers” Or, to join by phone, select “Use Telephone” in your Audio window. See example Submit your text question using the Questions pane Note: A recording will be made available within 48 hours
    3. 3. TODAY’S PRESENTERS Jim Chidester Director, Product Marketing Xactly Corp Joe Consul Chief Financial Officer Xactly Corp
    4. 4. AGENDA Challenges In Management Reporting Cycle Challenges With Incentive Comp In Reporting Cycle 4 Reasons Why Incentive Compensation Is A Pain 4 Fixes – Close Faster, Increase Accuracy How Xactly Makes Incentive Comp Work - Joe Q&A A little about Xactly
    5. 5. CHALLENGES WITH REPORTING CYCLE* #1 Timeliness of Reports & Analysis #2 Integrating Multiple Data Sources #3 Time Required To Close Books Pressure to deliver with more rules and more data sources *Source: IMA Research - 2013
    6. 6. NO MISTAKES ALLOWED! Financial Close Demands 100% Performance
    7. 7. NOW LET’S TALK INCENTIVE COMP! The Importance of Incentive Compensation
    8. 8. INCENTIVE COMP-REPORTING CHALLENGES What’s The Accrual? Sales Reps Commission Statements Time Pressure- Payroll & Commissions Bad Systems Integration with No Visibility
    9. 9. 4 CAUSES OF INCENTIVE COMP PAIN Error Rates & Reconciliation Need Accurate Commission Statements No Integrated Data- Get Data through Excel Determining Who Gets Credited 21% 25% 45% 48% 48% 77% Excessive costs running system Serious Errors Lack of Timely Reporting Difficulties maintaining system Multiple "Versions of the Truth" Excessive Manual Effort 2 3 1 ALL 42 1 3 *Source: Institute of Management Accountants Research – “Rising to the Challenge”-2013 1 2 3 4
    10. 10. 4 FIXES FOR BETTER INCENTIVE COMP Integrate CRM & Other Systems Real-Time Reporting Forecasting “What If” Scenarios Automate Calculations
    11. 11. FINANCE TEAMS AGREE ON FIXES 82% 79% 62% 26% 35% 5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% "The accuracy of financial data supplied by operating units is highly accurate, requiring little correction or manual intervention "My company can easily adjust its current financial system to changes in business profile" "I'm very satisfied with the level of integration among our financial systems across the company" Separate Systems/Manual Processes Integrated Systems *Source- CFO Publishing Research: “Future Proofing The Complex, Modern Business” - July 2013
    12. 12. HOW XACTLY MANAGES INCENTIVE COMP Joe Consul Chief Financial Officer Xactly Corp
    13. 13. HOW XACTLY MANAGES INCENTIVE COMP INTEGRATE APPLICATIONS • SFDC, XACTLY EXPRESS & ADP • No Re-Entering of Data REAL-TIME REPORTING • See accruals before end of the month • Build commission statements SALES DASHBOARDS FOR REPS • Real-time visibility from anywhere • Execs and Sales Managers
    14. 14. HOW DOES XACTLY BENEFIT? SPEED UP FINANCIAL CLOSE • Post accurate accrual within two days of Period End • Get Commissions to Payroll on time • Credits are easy – smooth workflows GET ACCURACY & ENGAGEMENT • Mitigate Risk-See Accruals before end of the month • Easy Payroll Review • No “Discussions” with Sales Reps REWARD ON TIME • Commission Statements/Payments for Reps • Tie behavior to performance to company goals
    15. 15. “Closing” Remarks & Recap  Changing Environment Makes Closing Books Painful  Incentive Comp Closing Process Can Be Painful  4 Fixes Can Get you More From Incentive Comp  Xactly Principles To Close Faster, More Accurately
    16. 16. FIXING INCENTIVE COMP CLOSE! Close Faster.. …with Accuracy.. ..Reducing Risk.. .. Linking Performance
    17. 17. QUESTIONS
    18. 18. LEADER IN SAAS INCENTIVE COMPENSATION MANAGEMENT FASTEST GROWING PROVIDER – OVER 125,000 SUBSCRIBERS FOCUSED EXCLUSIVELY ON INCENTIVES AND COMPENSATION MANAGING BILLIONS IN COMPENSATION ANUALLY MEET XACTLY
    19. 19. >2x 7% 36% 37% 25% FASTER REVENUE GROWTH MORE REPS MAKE QUOTA SHORTER SALES CYCLES QUICKER SALES LOWER SALES TURNOVER SOURCE: Aberdeen Dec 2011 THE PAYOFF
    20. 20. VISIT US AT www.xactlycorp.com OR CALL 1.877.GO.XACTLY(469-2285) CONTACT US

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