Evolving from Excel for SaaS Financial and Metrics Reporting - with Ali Rizvi Founder and CEO, TrueRev

**Ray Rike** (0:00)
Hello, I'm Ray Reich, founder and CEO of RevOpSquared and your host of the Metrics that Measure Up podcast. We talked to a wide variety of B2B, SaaS and Cloud thought leaders, executives, investors, and people just like you to discuss the metrics and benchmarks they use to make metrics informed decisions. Now on to today's show.
Welcome to today's episode of the Metrics That Measure Up podcast. Today, we are joined by Ali Rizvi, the founder and CEO of TrueRev. Today, we'll be covering three main topics with Ali. Number one, signs that Excel is no longer the right tool for SaaS revenue recognition. Second, ASC 606, the good, the bad, and the ugly. And third, the top SaaS metrics for SaaS companies less than 5 million ARR. So with that, let's take a moment to give a brief overview of your journey, Ali, to becoming a guest on the Metrics That Measure Up podcast. Hi, Ray.

**Ali Rizvi** (1:16)
Hey, thanks. Thanks for inviting me. I'm glad to be here. Quick intro about my background and how I got here. I guess really I'll start quickly from sort of inception, which was after business school, I started my professional career at Ernst & Young here in San Jose, California, Silicon Valley, where I was primarily working in the audit practice focused on tech companies. As a financial statement auditor, I mean, the primary risk area we always focused on, at least when I went in and looked at companies was on revenue, which then was around Revrec, for revenue, etc. The risk was always that a company had potentially misstated their revenue, usually overstating revenue. That's the risk that we're after. So, after ENY, working as a fractional CFO, I continued to work with a lot of tech companies, and it was primarily helping them around getting their Revrec policy done correctly. In fact, I'm just going to share one story. I had one tech client at the time. This was a few years ago prior to TrueRev, and it was the reason I started TrueRev, by the way. It was a gaming SaaS company. It's now a unicorn. It was being backed by a large Tier 1 VC, and they wanted to make sure before they put their money in that the company had a proper audit and got essentially around their revenue. We were brought in, we looked at their revenue, and I'll tell you just what we found. Tens of thousands of rows in a spreadsheet, multiple worksheets, formulas everywhere, macros, pivots, you name it, errors throughout, billing events being exported from their accounting system and stuck inside the same spreadsheet. It literally took 10 minutes just to open the damn thing.
It was crazy. I literally would hit open and go get a coffee. But of course, we found that revenue was misdated, and it took nearly six months of us just fixing it all. But it was really that crystallized for me, that this is a problem that exists in a lot of companies, not just the smallest ones, but larger ones. And I had to create software to help address this problem.

**Ray Rike** (3:15)
Well, thank you for the introduction. And you kind of almost answered one of the first topics I want to discuss with you, but you talked about it as an auditor and someone who really understands revenue recognition and reporting. So let me flip it to those members of the audience who, they got their QuickBooks online, they've got Excel, maybe they've got $500,000 to $1 million of ARR, and they don't know what they don't know. So what are some of the common signs that you've seen that a SaaS company founder or their head of finance should say, well, maybe QuickBooks and Excel really isn't meeting the challenge of what I need to do for revenue recognition?

**Ali Rizvi** (3:56)
Yeah, you know, companies that are kind of at that $1 million ARR stage, QuickBooks tends not to be the big issue there. QuickBooks is really, it's just a general ledger, it's your accounting system, it simply just records what you tell it to record. I mean, the issue really is it's around how revenue is being calculated. That's kind of the big one there. It's not just how it's being calculated, it's where is it being calculated and who's doing the calculations. For those companies, that's usually where it is. And the reason they have that problem, to be honest, is in terms of the who is doing it, is when you're just trying to grow, your growth is typically the game. I want to keep my cost low and I just want to grow. So I'll hack my way through anything. And it's often they don't have the right resources in place or the right potential folks that they can rely on to help them to understand, one, how to record revenue and then how to report revenue. That's what I see as a problem. It's not so much the QuickBooks element.