XU: Fathom was founded a decade ago, can you tell us a bit about the journey?
GC: Fathom began in a basement den in Brisbane, Australia. What drives us today is what drove us back then: to build powerful tools that give you a deeper understanding of your business performance. We want to help businesses - and the accountants that advise them - to make better decisions so they can survive and thrive. I still remember our first customer in 2012, a rental car company in Atlanta, Georgia, who’d found us through the Xero Marketplace. Since then we’ve grown to a global team of over 70 people, spread across four continents and helping more than 50,000 companies in 80 countries.
XU: How did the pandemic impact Fathom?
GC: As the COVID crisis developed, we saw a huge upswing in advisors and businesses using Fathom to forensically analyse their numbers to gain better insights and guide decision making. It’s incredible to see our customers use Fathom to help them get through difficult times. One of our customers who had just recently implemented Fathom, said that if he didn’t take action quickly, he would have been out of business in under six months. He had no idea, and Fathom helped him not only bring his company back from the brink, but also keep staff in jobs.
XU: Forecasting was a major development for the product, wasn’t it?
GC: It sure was! It took over 40 people, hundreds of customer interviews, thousands of lines of code, and nearly two years to research and build. In fact, the code for Forecasting was actually bigger and more complex than the code for our very first version of Fathom. It was worth it though! Forecasting is a pivotal feature for Fathom, joining our best-in-class reporting and analysis tools to help drive better outcomes for businesses. We now have a completely integrated solution for businesses and accountants looking for comprehensive financial intelligence. One of our Fathom customers summed it up this way: Accountants are very good at telling you what’s happened; they’re getting better at describing why it’s happened; and now with Fathom, they can figure out what to do about it.
XU: You did a lot of customer research during the development of forecasting in Fathom. What did that reveal?
GC: We were guided by the insights of over 1100 accountants and businesses from around the world and we discovered some fascinating details. A forecast built in Excel takes on average nine hours to complete and is quickly made irrelevant when new financial data comes in. Additionally, there’s no clear audit trail showing where the numbers have come from, which makes it easy to make errors but hard to detect them. In contrast, with Fathom forecasting, your data is never out of date and it’s completely auditable. Our tool pulls the numbers directly from the source accounting system each day, so your financial model remains relevant. This empowers you to make more informed decisions about the future. Those we interviewed told us that typical forecasting calculations are too slow. So our engineering team went to work and created faster forecasting. In Fathom, you can instantly see how changes to your forecast impact your cash flow and bottom-line. We’re incredibly grateful to the industry for helping guide the development of these innovative features.
XU: What makes Forecasting in Fathom different?
GC: Our vision for Forecasting was ambitious and unwavering. We were determined to offer a product that would give users the power to quickly and easily build dynamic financial models that can grow and change with a business and its plans. We thought about how forecasts are actually used, and where the real value is. And it’s all about driving decision making, and being able to confidently plan for any possibility. So we added what we call, ‘Microforecasts’ which help you model key business events in easy to use ‘building blocks’. These Microforecasts can then be used in scenarios and on the ‘Business Roadmap’, which combines business planning with the full accounting integrity of a three-way cash flow forecast. To add power to the modeling capability, we’ve included drivers for unit based forecasting, and have predictive ‘Smart forecast’ options which bring statistical calculations to the forefront. We also added a ‘Quick Metrics’ feature that helps you keep a close eye on your key numbers, such as cash position, gross profit, operating profit, EBIT or retained income.
XU: And how are advisors using Forecasting?
GC: Our mission has always been to empower accountants to be valuable business advisors. The accountants we spoke to wanted to spend more time engaging with clients, and less time processing data. These accountants understand the value of interpreting forecasted financial data into action for their clients. We challenged ourselves to consider how accountants could use a forecast with their clients, so they could branch out and workshop ideas together, such as considering the best time to hire staff, or determining the best way to purchase a new asset. And you know what? They love it! We’ve had one VCFO company in New Zealand recently describe this ‘always on’ nature of forecasting as ‘jamming sessions’ with clients.
XU: What’s next for Fathom?
GC: If Forecasting was a revolution, the next few stops on our roadmap are an evolution. We’re always working on improvements to help provide better insights and time savings to users. We have more exciting announcements coming this year. Fathom is also growing in exciting markets like South Africa, by partnering with SAIBA professional body. This year we launched the Fathom Certification program, which has attracted over 1000 registrations in just a few months. Our team remains passionately committed to supporting businesses and advisors by providing the insights they need to make better decisions and to look to the future with confidence.