Precision in Practice: Strengthening Nightingale Security’s Financial Operations with Scrubbed
How a leader in autonomous drone security built audit-ready financials, managed a $5M to $40M scale-up, and accelerated monthly closes.
The Challenge
Untangling Undocumented Financials
"The company had very, very part-time, rudimentary work done... I really needed somebody to come in and recreate records, create supportable documentation, and keep the company current with anything from reconciling accounts to posting financial statements." — Mike Tschiderer, Executive Finance Consultant
The Partnership
Establishing Operational Accounting Excellence
Nightingale partnered with Scrubbed's Accounting and Bookkeeping Group to overhaul daily operations—from Accounts Payable to Payroll and the General Ledger. This transitioned Nightingale from fixing past errors to managing a streamlined, forward-looking finance function.
"They are very diligent, very attentive... They communicate timely, get work done quickly, and they’re smart. They recognize things that need to be done that I may have forgotten about or just haven’t got to. I have my go-to point of contact, and that’s for all the basic needs like expenses and reporting, and then we also have a leadership contact who’s really thinking about across our financial portfolio."
Michael Tschiderer
Executive Finance Consultant
The Results
Reliability in the General Ledger
Audit-Ready Workbooks
Created structured "workbooks" and supportable documentation for 2019–2021 financial statements that helped pass rigorous external auditor scrutiny.
High-Volume Scalability
Seamlessly handled spiking transaction volumes across AP, payroll, and GL as company revenues grew from $5 million to $40 million.
Timezone Productivity Advantage
Turned the East Coast / Philippines timezone difference into a productivity asset, enabling work to be completed overnight for faster month-end closes.
M&A & Complex Debt Readiness
Established a scalable foundation ready to handle complex financial scenarios, potential mergers, acquisitions, and debt arrangements.
Why Scrubbed
Advice on Building a Finance Team
For finance leaders seeking to stabilize accounting without over-hiring, Nightingale recommends outsourced models for efficiency and risk mitigation.
Avoid Hiring Risks
Contracting an outsourced team avoids the lost time, high costs, and operational setbacks of a bad internal hire.
Unified Team Approach
Operates as a cohesive unit rather than isolated contractors, ensuring someone is always available to respond promptly.
Disciplined Systems
Replaced rudimentary records with a disciplined, documented, and professional accounting setup.
A Foundation for Strategic Growth
"Scrubbed is a trusted partner that delivers excellence. They genuinely feel like part of the team—and that's exactly how we treat them."
Michael Tschiderer
Executive Finance Consultant
Related Insights
How SaaS CFOs Can Optimize Spending Without Compromising Growth
Investors are increasingly rewarding efficient growth over speed, and that means SaaS CFOs need to strike the right balance between fueling expansion and maintaining financial discipline. Cost optimization is the key to increasing operational efficiency, improving cash flow, and ensuring a sustainable path to profitability that satisfies investors and internal growth goals.At Scrubbed, we’ve worked with many SaaS businesses and have seen firsthand how smart financial management can drive profitability and keep growth on track. Here are a few of the successful strategies we’ve observed and supported.Build a Cost-Optimization MindsetProactive financial discipline rather than reactive budget cuts helps CFOs build relationships with department heads and team leads. With their help, you can create a culture of cost awareness and identify inefficiencies before they become major financial drains.Regularly review financials: Routine financial reviews will help you identify areas of excessive spending and potential inefficiencies so you can take corrective action before costs spiral.Leverage variance analysis: Comparing actual spending to budgeted figures helps CFOs pinpoint any unexpected deviations. Your forecasting and cost allocation will also benefit if you have greater visibility into variances.Prioritize value-generating investments: Assess spending to differentiate between necessary growth investments (e.g., product development, customer support) and expenses that don’t directly contribute to revenue or efficiency.Optimize Customer-Related CostsCustomer retention and acquisition are two of the biggest financial levers in a SaaS business. Minimizing your churn and reducing the cost of acquiring high-value customers to aim for a CAC payback period of 12 months or less can significantly improve your profitability.Reduce ChurnImplement Customer Health Scores: Satisfaction and usage data can help you identify at-risk accounts and proactively approach them.Improve Onboarding: Ensuring customers realize value quickly can measurably boost retention rates. For instance, providing new users with a guided walkthrough or interactive tutorial that highlights key features and helps them achieve their first success can reduce time-to-value and improve the likelihood that customers will stick with you.Enhance Engagement: Clear communication and value-driven support will help you build trust and stronger relationships.Lower Customer Acquisition Costs (CAC)Target the Right Customers: Creating an Ideal Customer Profile (ICP) helps focus marketing on the prospects most likely to convert and stay.Invest in Content Marketing: Reducing your reliance on paid ads with other forms of content ( Case studies, SEO, and thought leadership) can be an effective way to reach more potential customers earlier in the buying process.Leverage Referral Programs: Encourage referrals to generate high-quality leads at a lower cost.Improve Cloud and Infrastructure SpendingFor CFOs managing burn rates and investor expectations, cloud hosting is often one of the largest and most variable operational expenses. If you don’t monitor scope creep and spending closely, these costs can start to erode your margins.Review Your Cloud Usage: Regularly audit your cloud instances to identify and eliminate any unused resources, improve utilization, and reduce unnecessary spending.Explore Reserved Instances or Savings Plans: Consider committing to usage agreements with your cloud provider that allow you to access discounts, which will make your long-term cost savings more predictable.Adopt Auto-Scaling Practices: Auto-scaling dynamically adjusts your resource allocation based on demand. It’s a way for your firm to optimize performance while avoiding over or under-provisioning.Review Vendor Agreements: It’s a good idea to assess and renegotiate contracts with third-party vendors from time to time to align costs with current needs and uncover any opportunities for savings.Streamline Internal OperationsOperational inefficiencies can quietly drain your resources. Automating repetitive tasks and standardizing workflows can be the key to reducing overhead without compromising on agility.Automate Finance and Accounting Tasks: Cloud-based tools can help you simplify and streamline invoicing, reporting, and reconciliations.Standardize Workflows: Creating documented processes enhances efficiency and reduces the likelihood of errors in your accounting operations.Eliminate Redundant Tools: Conducting regular audits of your tech stack helps you find opportunities to consolidate overlapping software, reduce redundancies, and cut subscription costs.Additionally, CFOs can evaluate hiring efficiency:Align Headcount with ARR Growth: If you have uncertain sales cycles, it’s easy to hire more employees than you need. Tying hiring plans to revenue milestones or customer metrics can help you keep staffing levels under control. This is where outsourced services come in, helping SaaS teams scale efficiently without overextending internal resources.Use Data for Smarter Decision-MakingData-driven decision-making empowers CFOs to maintain flexibility and optimize costs in real-time.Conduct Financial Modeling and Scenario Planning: Use forecast cost scenarios to evaluate potential cost scenarios and prepare for various growth paths.Track Key SaaS Metrics: Metrics like CAC, LTV, burn rate, and ARR efficiency offer valuable insights to help guide strategic decision-making and align actions with long-term business goals.Deploy Business Intelligence Tools: Real-time dashboards can deliver the actionable insights CFOs need to make informed and timely decisions.Scrubbed supports CFOs with scenario planning, dashboard creation, and metric tracking to guide strategic direction.Scaling Sustainably with Cost OptimizationCost optimization means aligning spending with business priorities to drive sustainable growth. By embedding cost-conscious practices into financial strategy, SaaS CFOs can maximize efficiency, reduce risk, and ensure long-term success.At Scrubbed, we help SaaS businesses navigate financial complexities, from cost forecasting to revenue recognition. Our team specializes in optimizing financial operations so CFOs can focus on strategic growth. For more information, check out our post on Strategies for Cost Optimization in SaaS Businesses.Contact us, and let’s talk about how we can help your SaaS business achieve financial efficiency without compromising innovation.
Propel Your SaaS Business: Proven Marketing Strategies for Sustainable Growth
At Scrubbed, we have extensive experience helping SaaS businesses achieve financial success. We’ve combined our knowledge and best practices into a clear and actionable 6-part series designed to maximize your profitability.This sixth installment focuses on marketing and growth strategies to boost your SaaS businesses.In today’s competitive landscape, achieving sustainable growth requires a well-defined marketing and growth strategy. You need a comprehensive approach encompassing various tactics that will help retain existing customers, attract new ones and, ultimately, increase revenue.Looking for Expert Accounting And Finance Support For Your SaaS Business? Click here!1. Build a Successful Marketing StrategyA comprehensive marketing strategy is a strategic investment that fuels customer acquisition, brand awareness, and sustainable business success. Following these steps will help you develop an effective marketing strategy:Understand your target audience: Knowing your audience is essential. Not all users will benefit from your product in the same way. For example, a project management SaaS might target freelancers looking for affordable solutions differently from how they target enterprise clients seeking robust collaboration features. Start by defining your ideal customer’s demographics, needs, pain points, and online behavior. From there, you can develop clear buyer personas and identify distinct segments to allow tailored marketing messages and product offerings that resonate effectively.Set goals and objectives: Determine what you aim to achieve, whether that’s growing brand awareness, boosting leads or improving customer acquisition numbers. Then set Specific, Measurable, Achievable, Relevant, and Time-bound (SMART) objectives that can help you track progress and assess success.Develop content marketing: To generate a steady stream of high-quality leads, position your SaaS company as the go-to expert in your field. Content marketing continues to be a powerful tool for SaaS companies. Create valuable, informative blog posts, whitepapers, case studies, and how-to guides that demonstrate your product’s benefits and solve your target audience’s problems. This strategy establishes trust and makes your brand synonymous with industry leadership.”Leverage diverse channels: Utilize a mix of marketing channels to reach your target audience. Some ways to get started include driving traffic to your website by sharing informative snippets from your content across social media platforms, engaging in industry conversations and discussions, or running targeted email marketing campaigns.Optimize your website: Ensure your website is user-friendly, optimized for conversions, and mobile-responsive. This allows potential customers to easily navigate, understand your value proposition, and take desired actions.2. Deploy Data-Driven Marketing and AnalyticsAnalytics tools and relevant metrics, like customer acquisition cost, website traffic, and conversion rates, can help you track the effectiveness of your efforts and refine your marketing strategy.Measure: Monitor how campaigns, channels, and individual tactics perform against your KPIs, ensuring a clear understanding of what’s working and what’s not. Constant measurement helps you gather valuable data-driven insights to refine your marketing processes and strategy, making better-informed decisions about campaign optimization, resource allocation, and future acquisition strategies.Experiment: Don’t settle for what you know. Continuously test different marketing approaches, website layouts, and landing page copy through A/B testing to identify the variations that resonate most with your target audience and optimize your strategy accordingly.3. Expand Your Reach and Build CredibilityBoosting your reach and solidifying your reputation can be achieved by collaborating with complementary businesses to unlock new avenues for growth.Reaching wider audiencesJoint marketing initiatives: Partnering on marketing campaigns, co-hosting webinars, or participating in industry events together allows you to access each other’s customer bases, extending your reach to new and relevant audiences.Bundled solutions: Combining your offerings with those of a complementary partner creates a more comprehensive value proposition, attracting customers seeking holistic solutions.Cross-promotional opportunities: Leveraging each other’s channels and marketing materials for cross-promotions introduces existing customers to new products or services they might find valuable.Enhancing Credibility and Trust:Industry influencer collaborations: Partnering with respected figures in your field adds a layer of credibility to your brand, leveraging their reputation and audience trust to your advantage.Joint research and development: Collaborative research projects or product development initiatives demonstrate expertise and innovation, showcasing your commitment to advancing your industry.Case studies and testimonials: Featuring successful collaborations in case studies or customer testimonials provides concrete evidence of the value derived from your partnerships.Careful selection of partners is key to maximizing the benefits. Align your values, target audiences, and expertise to ensure a relationship that drives mutual growth and strengthens both brands.4. Prioritize Customer Success as the Engine of GrowthPrioritizing customer success isn’t just a feel-good metric; it’s a strategic investment in your SaaS product’s future. Some steps to strengthen you customer relationships include:Deploy a robust customer support system dedicated to prompt, efficient, and personalized service is the cornerstone of this approach. By consistently exceeding expectations, you cultivate satisfied customers who become vocal advocates and organic catalysts for growth.Prioritize proactive engagement to maximize customer potential. Delivering relevant content and educational resources equips users with the knowledge to fully leverage your product’s features, maximizing its value and fostering a sense of trust.Personalize: Targeted upgrade or upsell opportunities at opportune moments provide seamless paths for customers to expand their engagement and contribute to your company’s growth.By nurturing strong customer relationships, you build a loyal and invested user base. They drive sustainable growth, provide valuable feedback, drive product improvements, and advocate for your brand. It’s a virtuous cycle: prioritize customer success, reap the rewards of their satisfaction, and reinvest in further strengthening those relationships.Growing your business is an ongoing process, not a single finish line. By following these practical steps and focusing on making your customers happy, you can confidently steer your SaaS company toward long-term success.
How to get Revenue Recognition right for your SaaS Company
Software-as-a-Service (SaaS) companies are one of the fastest-growing types of businesses, making critical software applications available through the cloud on a subscription basis. But while your SaaS company may have significant growth potential, the nature of your business presents accounting challenges. One of the biggest SaaS accounting complexities is proper revenue recognition.By understanding why revenue recognition can be problematic for your SaaS business and the two best ways to address this challenge, you can ensure you’re reporting your financials accurately and staying in compliance with relevant accounting standards and tax laws. Addressing these issues is also essential for effective risk and SOX compliance, helping your business maintain transparency and meet regulatory requirements. Partnering with experts who also provide corporate finance advisory can further strengthen your financial reporting and strategic decision-making.What’s So Complex About Revenue?Revenue recognition is all about determining how and when you will record revenue and recognize it in your financial statements. While this process can be complicated for any business—even for companies that provide a tangible product—revenue recognition is especially complex for SaaS businesses. In a SaaS business model, no physical product ever changes hands. Instead, your company retains possession of the software, so there is no specific point at which the customer receives the product. Further complicating the issue is that most contracts are recurring, and they often bundle a variety of add-on services into the monthly or annual fee rather than billing them separately.On top of that, the more flexibility you provide your customers in how they contract for your services, the more complicated revenue recognition can be. For example, a customer on an annual SaaS contract might have the option to cancel the service before the contract term ends, or a customer on a monthly contract might be allowed to switch to an annual arrangement at any time. Both situations can make accurate revenue recognition more difficult.How SaaS Revenue Recognition Can Go AwryThe accounting standards for revenue recognition changed effective January 1, 2018, for non-public companies with the Financial Accounting Standards Board’s ASC 606: Revenue from Contracts with Customers. This updated standard simplifies revenue recognition and brings greater consistency to financial statements across industries. Compared to the previous standard (ASC 605), the new standard requires more detailed disclosures and more information about a company’s contractual obligations.However, some SaaS companies may need to be aware of the new revenue recognition requirements and could inadvertently fail to follow the updated standards in their accounting. In addition, it can be challenging for startups and early-stage SaaS companies that don’t have a team of internal accountants to keep up with new standards like these and apply them correctly. But the consequences of failing to do so can be steep. If your SaaS company doesn’t recognize revenue properly, it can create a ripple effect across your business. Your financial statements will not be accurate. That will make it difficult to analyze your performance, make informed decisions, meet investors’ expectations (whether during due diligence or after the transaction closes), satisfy bank covenants, and respond to Securities and Exchange Commission (SEC) findings or comments. You will have to restate your financials. This is especially problematic if you have a business loan that requires annual audited statements or if a potential investor requests multiple years of audited financials.You might face tax penalties. Revenue recognition errors will likely cause you to overstate or understate your profit, which will cause you to miscalculate your tax liability. As a result, if taxes are underpaid, you’ll be hit with costly penalties and interest.Other calculations will be incorrect. Improperly recognizing revenue will impact any calculation that is based on your profit numbers, such as employee profit sharing or investor payouts.Two Ways to Get SaaS Revenue Recognition RightOne of the best ways to ensure you’re recognizing your SaaS revenue correctly is to follow a methodical process for recognizing revenue in accordance with ASC 606. At Scrubbed, our Technical Accounting Group follows a five-step process to help SaaS businesses recognize their revenue properly per ASC 606. Our technical accounting specialists take the following steps to carefully analyze each contract on a case-by-case basis and determine how to recognize the contract revenue appropriately:• Identify the contract with the customer • Determine the company’s performance obligations as outlined within each contract• Determine the transaction price from the agreement, breaking down the individual revenue streams (some may be upfront, while others will occur over time) and identifying any variable considerations, non-cash considerations, or financing components, for example • Allocate the transaction price, assigning revenue to every performance obligation in the contract • Recognize the revenue at the point that the company meets the contracted performance obligations or over the period the company performs the contracted obligationReviewing each contract individually is crucial since they may vary in ways that impact revenue recognition. For instance, some contracts bundle certain services (such as implementation, customization, support, or warranty) into the monthly or annual service fee, while others bill them as separate line items. In addition, some SaaS companies deliver their services solely through in-house staff, while some outsource certain services. Each of these scenarios presents different revenue recognition implications. The process of analyzing each contract individually is complicated and time-consuming—and the more your business grows and the more contracts you have, the more time and effort it takes. That brings us to the second way to get revenue recognition right: Partner with an outsourced accounting firm that understands SaaS accounting, like Scrubbed! Scrubbed provides accounting and finance services for many US-based SaaS businesses, so we understand the complexities of recognizing revenue in accordance with ASC 606. Our Technical Accounting Group works closely with clients in SaaS companies to analyze their contracts, determine how to recognize the associated revenue properly, and plot the correct revenue recognition over the contract’s life. These efforts cascade down to ensuring the company’s financial statements are accurate, which is critical for running the business effectively, meeting investor requirements, and satisfying loan covenants. If you lead a SaaS business, you can’t afford to get revenue recognition wrong. Contact the technical accounting experts at Scrubbed to learn how we can take this burden off your hands and ensure you’re recognizing revenue correctly.