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Episode Description
In this episode of Diving Deep, Subscript's CEO, Sidharth, has an engaging conversation with Ruchi Kasliwal, VP Finance + Ops at Zededa.
Sidharth and Ruchi discuss:
- How modern finance leaders can leverage GenAI
- The changing role of finance in early-stage vs. later-stage companies
- Balancing new headcount and technology investments
- The critical partnership between RevOps and Finance
- And more!
Show Notes
Follow Sidharth: https://www.linkedin.com/in/sidharthkakkar/
Follow Ruchi: https://www.linkedin.com/in/ruchi-kasliwal-0b62842/
Follow Subscript: https://www.linkedin.com/company/subscript/
About Diving Deep with Subscript
Diving Deep with Subscript is a video series where we dive deep and explore SaaS metrics with leading investors, CEOs, and finance leaders.
Watch the entire series of Diving Deep with Subscript
Get caught up on the entire series right here: https://www.subscript.com/diving-deep
Episode Transcript
Sidharth Kakkar
Thanks for taking the time, Ruchi. I'm really excited to dig in. And the first thing I actually really want to know about is your newsletter. What inspired you to start it and what's the goal?
Ruchi Kaliswal
Yeah, and thank you so much for having me. It's a pleasure to talk to you guys, and I'm excited about this as well. So talking about the newsletter, it's called FinOps Frontier. The reason I started this was more like everybody and anybody is talking about Gen AI, and what does that mean? I started digging a little bit more into it, and I figured that finance are not the first ones who go and explore new technology, new tools. They're not as adventurous. That was one of the reasons I started putting some thoughts on paper and saying that, Okay, let me help the finance and accounting community by just identifying the use cases on where we can use Gen AI technology. That was the initial starting point of why I launched the newsletter.
Sidharth Kakkar
No, that's really cool. I think in particular, when it comes to... Gen AI is one of those things where it hallucinates a lot or the results aren't predictable. I feel like an awful amount of finance leaders, you're telling me it's going to give me a different answer every time. That's not how Excel works.
Ruchi Kaliswal
Yes, but that's the beauty, right? Finance is not just about numbers. It's way more than numbers, right? There are so many. We are like the back-end infrastructure that keeps the company going. And that's why it's important to understand that other than numbers, we also look at processes, we also look at controls, we also look at opportunities where we can streamline and automate steps. That's the whole premises of launching the newsletter, because if you go back and look every month, I pick a different function in the finance and accounting org and try to build on the use cases, how you can use Gen AI in different functions.
Sidharth Kakkar
I really love that because I feel like it's a very old-school way of saying, Oh, finance is pretty much just about accounting, more or less. But I think modern finance, as you point out, is a much more important critical function. I'm curious, if you were to try to draw the differences between what finance is now and what it was conceived as before, like the less impactful? How would you draw those differences?
Ruchi Kaliswal
Sure. I would say in my first job, our team was called the bean counters. Everybody thought all we do was just count numbers numbers, numbers. From there on, if I look at what I do today, it's night and day. Bean counting or counting numbers is one critical part of my job, but then we are the strategic partners. We help the CEO do his job so that we can be their right-hand to run the company. The CEO shouldn't be managing, Hey, accounting, did you close the books? Hey, finance, give me number members here, all those things. Also, looking at other functions, we are strategic business partners for product, for example. When product is launching a new product, it's not just about selling. How do you sell it? What should be included in the collateral? What pricing do you give? All this is part of the finance function because we have a better idea of, are we seeing something in the collateral which is going to go bite us in the future because we committed too much and we have revenues impacted because of that. Similarly, with marketing, we have to be careful on what marketing is saying, what spend they are asking for.
Ruchi Kaliswal
It's all about strategic partnership with all the different departments, what modern finance does.
Sidharth Kakkar
Yeah, that's such a good point. I feel like in a lot of sense, it's a much more impactful and as a result, much harder job. I'm curious, what are the most impactful parts? What are the most notable parts of your career that prepared you to be able to do this more impactful work?
Ruchi Kaliswal
I would say, first of all, let's be honest, finance and accounting is a thankless job. People don't come and say, Hey, great job. You closed the books on time.
Sidharth Kakkar
It's more of a pass/fail activity rather You can't get an A plus for closing the books. You can only get a pass. Exactly.
Ruchi Kaliswal
That's understood. You should be closing the books on time. But I think one of the things that made me pivot and think of finance and accounting as more on the strategic insight is when I got a lot involved with the sales guys, when I had launched a deal desk. That was a very critical function because it helped sales identify, how do I structure the deals? When we are talking about structuring the deals, it's not just about what products to sell, but it's about how do I bundle the products? What pricing do I put out? What discount should I give? Going down to legal terms and conditions, what What T&Cs should be there? What payment terms should be there? That expanded the role of finance from just being a note taker or policing everything, instead being a partner and helping the company grow by building the right deals for the company.
Sidharth Kakkar
That's such a good point. I feel like maybe... I don't know that you agree or disagree with this, but I feel like the best piece of advice I've heard for earlier career, finance folks is to just get really curious. Even if you don't have any interaction with Dealdesk, get curious about Dealdesk, because if you get curious about it now, later in your career, you might end up running it and you will know what you're doing.
Ruchi Kaliswal
Yeah, and that's so true. I started off just knowing revenue recognition. But then because of that skill set, I was able to add more value. Asking questions is ingrained. You have to ask a lot of questions to understand that's the right thing. Yes, people may say that they ask so many questions we don't have time to answer, but it's okay. I would rather do the right thing after asking questions instead of assuming that I think that's the right thing. Deal Desk is a very critical function for any new finance leader who wants to expand. At least that's how I have grown also. Expand the footprint because you get to talk to sales, you get to talk to product, you get to talk to marketing, you even talk to engineering to some extent, because when you're thinking about, How am I going to get my data for these deals? You go to engineering and ask, What can you give me to track the licenses or the usage of the product? So it gives you a very wide scope and exposure in the organization as well.
Sidharth Kakkar
Yeah, that's awesome. I think another good framing I've heard around this is thinking of finance as the owner of not just the accounting statements, but all numbers in the organization, or at least a really party in all numbers in the organization. And I'm curious, because deal desk is obviously a really important function for all the reasons you mentioned, you end up with all this interaction across teams, and it drives a lot of the post-close numbers. I'm curious What are other functions that you think that finance should either be quite closely involved with or own or finance folks should just be really familiar with?
Ruchi Kaliswal
So one that pops up right away, I wouldn't say they should own it, but should be a key stakeholder in that is product management. Because you are working with your sales guys, you know exactly which product is selling, which feature of the product is selling? Where are we ending up giving so much more discount because either the price is not right or the product is not right, something is not right there? Those metrics and data points, finance can and get all of those analytics done. That's useful for product management. If product management is putting a lot of time and effort on a feature that may not be as successful, then we need to course-correct early on. That's why having finance as a stakeholder and a key stakeholder in those product road mapping decisions is very important. Because ultimately, then you end up saving the time and resources, and you're actually putting something in the market which will be acceptable by the customers. That's one of the functions which I really believe finance should be a big part of it. Infrastructure in terms of not the core engineering infrastructure, but how we run our business or how we run our company.
Ruchi Kaliswal
That's where finance should be involved. A lot of times, like SaaS businesses, the cloud cost is so much. You can't leave the cloud cost just for engineering to figure out how do we optimize the cloud. That's where you really need finances help. What's the best way to structure the cloud? What numbers to look at? Do we go for reserved instances or not? Those thought processes bringing in a lot of number impact, but the storytelling and the cost impact that will happen is going to be really helpful for engineering or infrastructure to buy the right stuff.
Sidharth Kakkar
I don't know if you've experienced this, but not all, for example, product teams or engineering teams or sales ops teams necessarily see finance in that advisory light, and so may not proactively reach out to finance when they're trying to decide whether to use... How to optimize their cloud spend or whatever. I'm curious, what do you think a great finance leader or a great CFO can do to inspire the rest of the organization to see them in that advisory way?
Ruchi Kaliswal
A great finance leader should start from building relationships. You should not come across to other departments, Oh, these guys are going to cut my cost, cut my expenses, not let me spend so much. That's not the perception you should bring in. If that is the perception, make an effort to change that. Building those relationships and showing that, yes, I can help you by giving simple examples like what we just talked about brings in that trust that other leaders will start thinking of you as more like a partner and advisor, that if I'm making a decision, let me just double check with my finance person that, Hey, do you think this is right or this is right? Building relationships, I cannot stress that enough, is the core of getting yourself involved. You don't need to be every time a decision maker. You can just be an observer. That's the beauty, that being an observer and listening and saying the right thing at the right time is what will build the trust. That's why having those solid relationships from the get-go is going to be the super key skill that finance leaders should develop.
Sidharth Kakkar
To get really specific or tactical, do you have ideas like use these words rather than these words to not trigger defensiveness around cost spend? Do you have any super tactical advice?
Sidharth Kakkar
Just because I think that often is interesting.
Ruchi Kaliswal
Yeah, Okay, I'll share one that just comes to my mind with my CMO in one of the prior companies. There were lots of events happening in the company. Now, obviously, there's a cost to the company. If really don't see the return, then you have to question it. Now, you don't need to question it that, Hey, why are you spending so much money? The way to ask is, Hey, I love that you did this event, but would you mind sharing How many leads did you get from that? How did we track? Did we have any follow-up with these leads? If there's anything I can help you get more information, what can I do to bring these leads home and convert to real opportunities and deals. This is one way where you're not really questioning the event and the spend, but you're trying to get out of it, What is What's my ROI for this event? What's the result of doing this event? Was it just brand awareness or was it lead generation? That was a very specific example And then obviously, they did not feel like I was questioning the spend.
Ruchi Kaliswal
But I was asking, what can we do to convert these guys who you talked to?
Sidharth Kakkar
Yeah, that's cool. You talked a little a little bit about for the finance teams, understanding a little bit of how deal desk is structured and other teams are doing the work. Something that brought to mind for me, tying it back to Gen AI, is I'm an engineer. And for example, I was earlier working on... We're working on a lot of speed-oriented projects. I was thinking through, how do I optimize this type of data request? I end up often using something like GPT for that to try to understand what is... I treat GPT as a summary of the Internet. And so what does the Internet think of this request? How can you optimize it? And I'm curious, do you find that there are similar applications for financiers? And do you find that you yourself are using Gen AI, specifically in your either personal or professional life?
Ruchi Kaliswal
I do it on both, and I love it. Gen AI is my little assistant who can help me with so many things. Not just from a wider summary of the internet, but also create documents. One of the very simple one will be any new startup They don't have as much structure or policies or processes in place. Go in and ask a Gen AI to give you a template of, let's say, a T&E policy, a travel and expense policy. It's pretty good. That works as a shell for you. Then you just customize a few things and you're good to go. Leveraging Gen AI in simple things like policy creation, process mapping, what's the right questions to ask, what's the right business proposal, or when I'm doing an M&A, what are the things I should be looking at? This is like a guidebook for you. It's a teacher with no cost. Well, of course, a paid version has some cost to it, but it's a teacher with basically a whole lot of information that you can leverage and take it to your advantage. Similarly, I've used GenAI to build itinerary for our trips, and it's pretty good.
Ruchi Kaliswal
It tells you the prices, hotels, destinations, activities, everything. Chatgpt has been... I've tested all three: Bard, ChatGPT, and Anthropic. But so far, I'm happy with ChatGPT.
Sidharth Kakkar
That's cool. Any other examples that come to mind? I'm curious to hear as many as possible.
Ruchi Kaliswal
Oh, sure. There's a ton. Actually, that goes back to my newsletter. It's a basis. It gives you ideas that you can use a Gen AI in lots of different things. For For example, mergers and acquisition. What market should I look at? What are the different metrics I should look at where I'm acquiring a company? These are the guidelines that ChatGPT or any Gen AI tool summarizes for you. Similarly, if you look at it from an internal SOX perspective, what controls should I put in place? It gives you a guidebook that for expenses, these should be controlled. Revenue, these should be controlled. Data management, data accuracy, these should be the controls because it's summarizing everything. You don't have to start from scratch. But of course, it has hallucination. It is not going to tell you exactly what you need to do. That's where you use your real brain and say, yes, this sounds right, but is it really right? That's where adding that experience, expertise, puts more value to whatever you do.
Sidharth Kakkar
I think the best trick I have on a lot of that is because of the way that the Gen AI works, it's just next token prediction. It's just giving you the next token after whatever it has before it. But that means it has no reflectiveness. It doesn't look back to think, Oh, does this make sense? But you can inspire reflectiveness by doing follow-ups. You can feel like, Oh, can you relook at this? Are you sure it makes sense? Then it will actually reflect on that, which can be a really good way to get a better output even before doing all your manual review.
Ruchi Kaliswal
Yeah. One example that comes to my mind is, and now full disclaimer, you should only do this if you have a paid version. Load a contract on the ChatGPT or I'll say Gen AI platform and ask specific questions that summarize my billing terms, summarize my payment terms, summarize my products with pricing, what is the total value? Are there any renewal terms, auto renewal or something like that. Let it do its work and see if it works. Because you have already review the contract, you already know those terms. That's a good check that is it doing what you really wanted to do. Also, you can always ask him, this does not, him or her, ask the tool, that, Hey, I don't think this is the right product. I want you to look for this product again in the document. You can give all these specific questions, and you're training the model as you are going. The more you talk to the model, the better your answers are going to be. This is a tested and tried process, but please make sure you're using the paid version because you do not want any your contracts to be out there in the public.
Sidharth Kakkar
Yeah. It's interesting. We actually have a feature on this in Subscript where you can upload a contract and we will create the RevRec terms and the billing terms and the different products and the prices for each product and the number of units that the customer purchase and stuff. But similarly, what we'll do is actually create the first version, and then we will say, Please check this. It's not like this is final because it's going to be wrong sometimes. But what it does do is save, I don't know, 70% of the time of the initial read of the contract, and now you can just do the final checking and say, Okay, this is good to go. It saves a lot of data entry time, actually, for folks who use Subscript.
Ruchi Kaliswal
Data entry time, and think of it when you have heavy loaded last week of the quarter where you're trying to review and process 100 contracts at the same time. This is a big saver for those revenue accounting teams and the controllers to make sure that, hey, they are reviewing the right things.
Sidharth Kakkar
Yeah, totally. I'm curious, actually, speaking of revenue accounting and controllers, are there other places for either accounting or finance workflows where it can help eliminate some of the more roped or boring things that you don't necessarily need a human to do?
Ruchi Kaliswal
Generation of invoices. To some extent, cash application, I still have to dig a little more deeper into that, but that has been one of the biggest challenges in a lot of places where I've been, where cash application is a nightmare because when the customer is paying, they are not calling out the invoice that they are paying, or they are paying four invoices together, so the amounts do not match. So There are lots of permutation combinations that happen. But I would love to see Gen AI taking that information and saying that, Hey, this payment applies to these four invoices, or this payment is paying is, but not in full, those things. But I think generating invoices is a big one because if you have all the information in the system itself, it's a matter of clicking a button. You have template, you have the order information, you have the customer information, you know what the billing terms are, and you should be able to train the tool to say, Hey, as soon as this is closed, one, generate the invoice, and maybe send it also, right? That's an easy one which people can start working on.
Sidharth Kakkar
Yeah. I mean, that's very squarely in our world at Subscript. So yeah, totally agree with that for sure.
Ruchi Kaliswal
Oh, perfect. Yes.
Sidharth Kakkar
Very cool. Searching gears a little bit, you've worked with a lot of different SaaS companies or generally companies in various stages. I'm curious what you find are the biggest differences for the finance team in early stage versus later stage companies?
Ruchi Kaliswal
Early stage, we are all about figuring it out and building, and later stage, it's all about executing. I'll I'll give you an example there. In Series A, I should say Bootstrap Series A, maybe early stage Series B companies, we should not have a full on dedicated finance person per se. All you need at that point is somebody who can manage your funding and capital and somebody who can do your regular accounting. As you get into more Series Late-State Series B, Series C companies, that's when you really need to bring in a good finance person, because that is when you start building things. You start building processes as it relates to AOP. Somebody needs to come and build an annual operating plan. Somebody needs to come and build department budgets. Communicate with the departments what their budgets are, what's the spend criteria. Somebody needs to build tools back in. If you don't have an ERP, put an ERP in place, put RevRec policy in place. I'm hoping by then they've had enough money that the SBC should be a part of that expense policy in place. Those basic building blocks is what happens when you are in late stage Series B, Series C companies.
Ruchi Kaliswal
After Series C and D and then going forward, it's all about execution. How can you scale the tools? What other processes do you need to scale? Because at that point, you're not building anymore, you're just executing. So streamline your CPQ process, streamline your AVB process, have more structured meetings, have very specific questions out there, your price book updates, have very specific schedule for your price book and product updates. Those things come in when you're in a more mature company.
Sidharth Kakkar
There's so many really good tidbits you just shared. Okay, so bringing some of it down, let's take something like departmental budgets. What do you think are triggers? You might need departmental budgets if... How would you finish that?
Ruchi Kaliswal
If you plan to do a lot of offsites and meet with your teams. If you plan to do a lot of events. And if you plan to spend a lot on tools and technology. There are three ways you can bifurcate that. If you're doing a lot of off-site and events, let's say engineering, they are spread out across the globe. Obviously, you need some interaction and bring teams together. If by doing events and off-sites, this is the way you are going to manage your employees and team coherence, then let's put a budget together. How much can you spend? How often can you do the off-sites? What locations you should be picking? Who should be attending? Because all of this will add to the cost of the company. If you're going to do a lot of events, that's marketing. Are you going to do brand awareness? Are you going to do lead gen? If so, what kind of events? Are you aligned with where the company is going? If the company is in retail, there's no point going and doing an event in industrial conferences. Those things, let's put a budget together for that. And then what was the last one?
Ruchi Kaliswal
I forget. There were three that I said. Tools, yes. So that goes to maybe finance, right? Are you going to get 20 new tools to help your team? Let's talk about it. Why do you need so many tools? What's it going to be? Am I not getting any more headcount because we are moving the budget to the tools? Those are the things to think about as to why you need a budget.
Sidharth Kakkar
Yeah. Where does headcount planning fit into all of this?
Ruchi Kaliswal
Headcount is an integral part of it. It all comes down to as part part of an AOP process, you should be talking about headcount and tools. When you're talking to the department leads, you should be giving them an option that, Hey, do you think Do you think three QA persons are needed? Or can we get one QA person with this particular tool which will expedite our QA process? Those are the questions you as finance people should start asking the department heads because a lot of time, they may not be thinking about all these tools and automations and whatever is out there. You need to start asking these questions so that they can also think differently. It's not all... Headcount is not always the solution for everything. And you cannot keep adding headcount.
Sidharth Kakkar
In a lot of ways, it should be the last solution everything.
Ruchi Kaliswal
Yes.
Sidharth Kakkar
After you've tried everything else.
Ruchi Kaliswal
Yes. After you have basically used all your resources. I have some awesome tools. I have everything working, but I need people to run those tools now. That makes sense.
Sidharth Kakkar
You've been at the intersection of finance and RevOps for much of your career. We talked a little bit about finances role in deal desk, but I'm curious, overall, what is your view on the advantages of having these two functions closely tied together?
Ruchi Kaliswal
I think this is an excellent intersection. I would say I don't see any negative disadvantages of having these two other than people's ego come in place. But from a functionality and productivity perspective, this is perfect. Because as finance, and especially as accounting, we are responsible for the Q2C process. The Q part of the process starts at the RevOps function. Even going beyond that, like we talked, getting yourself self integrated into product helps you identify, how do I build my RevOps so that I give the best service to my sales guys? Revops should be treated as an integral part, like a central nervous system of selling products for the company. Because then you get to work with product in terms of product like SKUs, and also features and also pricing, you can put that information into your CPQ tool if you have that, and train your sales guys that, Hey, this is how we should sell the product. That's why having that The RevOps connection helps quite a lot. When you're working with sales, you understand the customer feedback, which helps a lot on your side when we are doing, let's say, SSP, that's one of the...
Ruchi Kaliswal
I'm sure in ASC 606, that's one of the critical things that we have to do when we are doing pricing analysis. Because you've had the exposure, you know exactly where the pricing should be. That's another way to look at it. Then having all those metrics pulled out from a RevOps site lets you identify where our customers are, where our markets are, are we Are we churning too much? Are we doing net new logos or are we doing only expansions? All those information is super helpful from a finance perspective because you can take that information and bake it on into your next year's plan. Also in your commission's plan, how do you set the quotas for sales guys? It's super interesting. I love this interaction and the intersection that we've created between finance and RevOps.
Sidharth Kakkar
In earlier stage companies, often they can't afford full-time sales ops teams. Maybe one person to just manage the sales Salesforce instance or something like that, but rarely in an early stage company, someone to deal with the SSPs or the commissions or any of this stuff. I'm curious, who generally ends up taking on that work in your experience?
Ruchi Kaliswal
In the earlier stages, it is under finance. At least that's what I have seen, and I would encourage if it is not under finance, that be it under finance because it has the right control methodology mindset. In earlier stages, company, generally, things are not as complicated also. You don't need to do that, let's say, SSP analysis or that detailed analysis. This is still very young and less volume of transactions, though it's still manageable. The scope of work for RevOps in very early stage companies is very limited.
Sidharth Kakkar
Totally makes sense.
Ruchi Kaliswal
Yeah. As the companies grow, obviously, that scope of work increases and you will need more people.
Sidharth Kakkar
That's where having a full sales ops team with a commissions person and a tools person and strategy person, all that stuff makes sense, right?
Ruchi Kaliswal
Correct.
Sidharth Kakkar
Very cool. As we reach the end of this, I wanted to generally ask any takeaways from this conversation that you'd really want to highlight that you think are the most important things or anything that we didn't cover that you feel like you want other finance folks up there in the world to hear?
Ruchi Kaliswal
I just want to say that finance and accounting folks don't be afraid of adopting new technology. That's the biggest thing. Historically or traditionally, that's not the mindset we have or we grow up with. Use technology as much as you can, especially Gen AI, as this is just increasing your productivity. Obviously, you have to be careful. There are legal implications, there are financial implications, so don't let them create all your model. You have to still own the model and understand the assumptions and everything, but leverage the technology as much as you can because this is only going to help you and not hurt you.
Sidharth Kakkar
I love that. Yeah, the leverage that it can bring is going to just expand your impact.
Ruchi Kaliswal
Exactly. Let's be smarter, work smarter and not harder, right?
Ruchi Kaliswal
Yeah, totally. Thanks again for taking the time and for all the insights and all the thoughts. This is lovely.
Ruchi Kaliswal
Thank you so much for having me. It was such a pleasure talking about all these things with you.
