How finance and revenue teams can build better forecasting models | Parker Crockford, Qover

Finance and sales teams are not the most obvious partners, but as accountability and accuracy are more important than ever they need to find a way to marry the aspirations of a forecast with the reality of the market. 

In this episode, Parker Crockford, Chief Revenue Officer at Qover, explains the role and responsibilities of a CRO in a B2B framework, the importance of working with finance teams to build reliable forecasting models, and how the finance team helps sales stay on track to build a sustainable business.

What is the role of a Chief Revenue Officer?

The role of a Chief Revenue Officer (CRO) is to oversee the go-to-market strategy of a company, specifically in the areas of marketing, sales, and partnerships. Their focus is on generating revenue from initial engagement to customer success and driving growth for the company.

One of the key aspects of the CRO's role is to understand that B2B sales operate in a timing framework. That means revenue teams need to maintain a consistent and repeatable sales process, from prospect outreach to customer onboarding and management. This involves aligning marketing efforts with sales and partnerships to effectively address the needs and concerns of potential clients.

Why is collaboration between sales and finance teams important? 

One of the key challenges in aligning sales and finance is the need to balance short-term revenue goals with long-term financial sustainability. The key is to communicate the direction of travel and the future potential of the product or service as part of the sales process. This is particularly relevant in B2B sales, where the sales cycle can be lengthy and the product may not be immediately used by the customer.

Selling a roadmap of what will be built can be challenging, as customers may be hesitant to invest in something that is not yet fully developed. However, selling the vision and potential of the product, even if it is not fully realised at the time of sale, requires a delicate balance of managing customer expectations while also maintaining transparency about the current capabilities of the product.

While the sales team is responsible for hitting targets and driving revenue, the finance team plays a crucial role in ensuring the financial sustainability of the business. Finance teams are and always will be responsible for determining pricing and margins in the business. And as such, building business that is rooted in the principles of sustainability.

How to align sales and finance teams? 

Sales and finance collaboration is crucial for the success of any organisation. Take forecasting for example - by understanding what is in the pipeline and the closure rate, sales teams can predict the revenue that will be generated over the next 12 months. This in the bedrock for setting budgets and determining the company's financial trajectory.

While the sales team is incentivised to hit numbers and achieve targets, finance teams play a critical role in ensuring the budget is accurate and has sound methodology the leadership team can present to the board and investors. Sales teams need to provide accurate and timely insights to finance about their activities, revenue projections, and any challenges they are facing. On the other hand, finance brings cold, hard calculations to the table. Together, they can find the sweet spot that challenges the team but also ensures attainability.

What should finance teams understand about sales? 

Some salespeople are motivated by earning commission and thrive in a fast-paced, results-oriented environment. Sales is a high-pressure, results-driven profession where success is measured by achieving goals and salespeople carry the weight of meeting targets and achieving revenue goals. That can create a lot of pressure and stress. It is important for others in the organisation, especially finance teams, to understand and appreciate the pressure that salespeople face.

What helps driving alignment is when sales and finance work together to set realistic targets, make informed decisions, and accurately forecast revenue. Salespeople rely on finance teams to provide the necessary support and resources to meet their goals, so its essential when creating a scalable business that is also financially viable.

What is the best advice you have received? 

"Don’t say no to something just because it scares you".

The regret of not pursuing your goals is always greater than the fear of failure. Failure should not be seen as a negative thing. I have made many unconventional choices in my life, and while some may have resulted in failure, it has always been a learning experience.