Interview with Simone Rüschenberg, Member of the Finance Leaders League

Get to know Simone Rüschenberg , who led finance teams at four German unicorns you certainly know: HelloFresh , TIER Mobility , SoundCloud , Gorillas .?

?Simone, after having seen so many different consumer start-ups, what are a few things they all had in common? Which things were very different among the four?

?? All four companies had very different cultures. For example, Tier’s and Gorillas’ teams were very young, talented, and eager to build something big fast. It was a rollercoaster, however.

The common thing amongst the companies is the vibe and excitement during those hyper-growth phases. The team is pumped about the potential and grows so quickly. The companies need to stabilize while growing quickly, which is not always easy. All four companies were in “hype markets” - and accordingly had to compete with incumbents and copy-cats.?

?You’ve joined many companies when they were already growing super fast and often had an eye on the cost side of the business. Which approach did you take to balance speed and spending?

?? Cost control is a crucial topic when a company grows in all dimensions. Implementing budgets and enforcing them is mandatory to predict the cash burn & P&L results. That’s where Procurement tools are coming in.?

? Can you give an example of how a procurement tool can help to control costs?

?? Sure. A procurement tool can provide real-time spend tracking vs budget, which enables finance and spender teams to identify areas of overspending or unauthorized purchases.?

Procurement tools should be used to catch big cost blocks. You don't need a purchase order for every “pencil” - the goal is to catch the big spending upfront - before you get the invoice. Therefore it makes sense to set reasonable thresholds, e.g. POs are mandatory for expenses above 1k.

I saw often approval processes only for invoices. That is a good 2nd check - but in general, it's too late to stop the cost and cash outflow because the service has already been provided

??That sounds useful. What other advantages does a procurement tool offer?

?? Another advantage of using a procurement tool is that it helps to set proper accruals in your month-end closing process by providing greater visibility into outstanding invoices and purchase orders. This enables finance teams to close the month much faster and more accurately.

?And what is the benefit of having a faster month-end closing process?

?? A faster month-end closing process enables finance teams to provide more timely financial reporting to key stakeholders, such as investors and Senior Management Team. This can help to improve decision-making and overall business performance. Ideally, you should close the month as quickly as possible instead of “20 days” after the month's end.

?Finance tools often add a bit of intentional friction - and that’s not always in line with the goals of the other departments. What do you recommend to make the implementation of a procurement tool a success?

?? A few points:?

1. C-Level backing - only if senior management advocates the procurement process, the departments will adopt it.
2. User-friendliness & fit - choose a tool that has an easy and efficient UI. Test it with heavy-user departments (e.g. marketing, IT) before rollout. If they are happy to use it, most other teams will be, as well.??
3. Accountability and training - define one responsible person in each team (usually the cost center owner), train them, and make them accountable instead of various people per team. This will accelerate adoption massively.
4. A clear implementation timeline - you can’t just stop paying invoices from one day to the other. Communicate a clear cutoff date (“No Purchase Order - No Pay”) and share the different department’s progress in the ramp-up phase. The best form is having a leaderboard that shows who has adopted the process best, i.e. who’s first to have a Purchase Order on 100% of the invoices that come in.?

I’ve seen many implementations of procurement tools. The most successful ones were with tools that have an API to Standard ERPs like Netsuite -? such as Precoro . APIs are certainly a big success factor.?

?Besides your impressive career, you’ve also co-founded the Finance Leaders League. What made you start this network?

?? Back in 2017 Stevan, Sebastian, Sebastian, and I were all working in scale-ups’ finance teams and realized that we often went through similar challenges. The casual exchange on work-related topics massively helped each other. We knew the Builders’ Network founded by Christian Miele and saw how it was adopted. That’s when we realized that there is no good format in the region that fosters empowerment among finance executives and voilà - Finance Leaders League was born.