FreightWise is a cloud-based supply chain logistics company based in Brentwood, Tennessee, that integrates with clients’ existing infrastructure to reduce shipping time and resources while solving challenges in clients’ visibility, optimization, manual processes and cost.
Founded in 2016, FreightWise has been on the Inc. 5000 list of America’s fastest-growing private companies for three years in a row, hitting the No. 2 spot in 2019 and reaching 733% three-year growth in 2021.
FreightWise uses Datarails for financial reporting, budgeting and forecasting, as well as for tracking the company’s sales – and ultimately, to stay flexible while growing fast.
Read more to see how the company’s CFO used Datarails to show management the way toward faster growth in 2021.
The problem: Reporting, budgeting and forecasting processes were too rigid and limited
When Bradley McKnight took on the role of CFO at FreightWise, he noticed a couple of issues right off the bat: The company’s financial reporting was quite limited, and its reporting, budgeting and forecasting processes were extremely time-consuming, requiring extensive manual effort and yielding results that were too static and rigid for the dynamic company’s rapidly shifting needs.
The biggest problem, he found, was that the company’s existing financial reporting and planning processes were just not flexible enough for as fast-growing a company as FreightWise.
I’ve been able to demonstrate to management that not meeting hiring goals is affecting revenue. They sort of knew it, but now I can show them it’s got this exponential effect on our revenue.
—Bradley McKnight, CFO
The reporting solution: Financial reporting that structures the data how you want it
Prior to using Datarails, FreightWise’s financial reporting was restricted because the company couldn’t change the way the data was structured based on requirements for the specific report, but had to reflect the exact structure of the general ledger.
For instance, McKnight wanted to view an expense in two different ways on different reports: as an operating expense on a financial report but rolled up into “other expenses” on a management report. But he couldn’t do that in the ERP because the structure of the general ledger dictated where the expense appears on all reports.
With Datarails, data can be structured in any format for any report, no matter how the source data is structured. And that adds a lot of versatility to the reporting process, said McKnight.
“With Datarails, I have the flexibility to format statements without the limitations of the general ledger structure,” he said.
Being able to access data easily and structure it in any format, along with the quick implementation and ability to get significant value in a short time, wowed McKnight. He recalled his reaction when he saw how easy it was to access his company’s budget data using Datarails: “I was like, ‘This is the greatest thing since sliced bread!’”
The sales solution: Tracking contribution margin to increase win rate
Sometimes, McKnight’s analysis of the financial data puts him in a somewhat unusual position for a CFO: advising the company to spend more. That’s what he did when he noticed a correlation between the lower-than-expected sales figures on individual sales teams and the lower-than-expected travel expense.
“They’re not getting out in front of the clients,” said McKnight. “Our product is very complicated, and understanding its abilities both during and after the sales cycle can go askew quickly.”
In addition to using Datarails for financial reporting and planning, McKnight is also using it to track the contribution margin for the sales team, down to each individual salesperson. This has given the sales team clear benchmarks for success as well as information about deal size and prospecting rate, in addition to the raw sales figures.
The visibility into the sales figures also helped sales managers understand the performance of specific account representatives, leading them to identify weaknesses and give them the tools to better close new clients.
“Once I was able to give management that kind of data, they were making better business decisions, whether it’s hiring or how are we spending our money,” said McKnight.
We’re growing, so I’ve got to have the flexibility that the company needs to do that financial planning: What is next month going to look like, or what is next quarter and next year going to look like. I really could not do that very frequently before using Datarails, and now I can.
—Bradley McKnight, CFO
The budgeting & forecasting solution: Seconds instead of 8-10 hours
As a highly dynamic company with a steep growth trajectory, FreightWise needs its financial planning process to be dynamic too.
What that means for McKnight is a flexible budgeting and forecasting process that enables him to regularly update the forecast based on the actuals.
Before using Datarails, this was a problem because it simply took too long, requiring him to load the budget into his ERP and then reload again whenever there was a change in the budget – for each account, each cost center and each month. “It was very tedious,” he recalled. “It took a long time.”
The company’s 20 cost centers made the pre-Datarails process even more convoluted and time-consuming – so much so that it used to take 8-10 hours just to get a budget comparison on the department level. That’s because for a change in the head count budget for just one position, McKnight had to go into the ERP to key in changes for each affected cost center to get the department-level data he needed. With Datarails, McKnight uploads his adjusted budget once and that’s it – “so it’s seconds as opposed to 8 or 10 hours.”
Using Datarails has made it possible for FreightWise to implement agile and robust financial planning, through a flexible budgeting and forecasting process that reflects the latest changes.
“The flexibility to make changes easily is something I didn’t have before,” said McKnight. That is crucial to FreightWise because it’s such a “dramatically growing new company,” he said.
“We’re growing, so I’ve got to have the flexibility that the company needs to do that financial planning: What is next month going to look like, or what is next quarter and next year going to look like,” he said. “I really could not do that very frequently before using Datarails, and now I can.”
Once I was able to give management that kind of data, they were making better business decisions, whether it’s hiring or how are we spending our money.
—Bradley McKnight, CFO
The impact: Pinpointing drivers with ‘exponential’ impact on revenue to hit 733% three-year growth
After FreightWise hired fewer salespeople than it had planned, McKnight used Datarails to come up with a revised forecast that showed management the impact that the slowed pace of hiring was having on sales goals, revenue and the company’s growth rate.
With the revenue projections that McKnight used Datarails to obtain, management was able to see that while pushing off the employment costs associated with hiring would save the company money in the short term and avoid a net loss for six months, it would also significantly slow down growth in the coming 18 months and beyond. “The forecast showed them the cost of their delay,” said McKnight.
As a result, the company decided to accelerate hiring – and ended 2021 with the remarkable 733% three-year growth that enabled FreightWise to make the Inc. 5000 list of America’s fastest-growing private companies for three years in a row.
“I’ve been able to demonstrate to management that not meeting hiring goals is affecting revenue,” said McKnight. “They sort of knew it, but now I can show them it’s got this exponential effect on our revenue.”
“By showing the effect of delayed hiring, management was then incentivized to meet hiring expectations in order to meet growth plans rather than ‘saving money’ with unfilled positions,” he said. “This inspired the direction of the company, which led to the 733% growth in 2021, exceeding expectations rather than falling short of projections.”