How to set up your finance operations (FinOps)

What is FinOps?

FinOps, or finance operations, refers to an increasingly strategic function made up of finance automation specialists, tools, and processes to help businesses streamline and optimize day-to-day finance tasks in order to save time and money. Finance automation technology helps eliminate monotonous, manual work that hinders business innovation in favor of agile, automated processes.

Automating lower value tasks, such as expense management, enables finance departments to save time while maintaining control and accountability. Through a deeper integration of finance and business operations, combined with operational rigor, FinOps allows finance to become a strategic partner for the rest of the business, rather than a bottleneck.

For years, finance teams have been bogged down with tedious day-to-day tasks that take up the majority of their valuable time. But thanks to FinOps, CFOs and finance leaders are now able to devote more time to strategic collaboration and activities that can boost their ROI.

How FinOps has been redefined

FinOps emerged as a part-time function held by key team members such as accountants, controllers, etc. It has historically been reactive, e.g. chasing employees for receipts, coding transactions, and inputting invoice line items into accounting systems, with a focus on reducing cloud technology spend.

It applied financial best practices and partnered with engineering to help organizations optimize cloud computing costs and efficiency. This initial narrow definition of FinOps signified a shift in businesses of combining finance with new technologies to improve efficiency. Prior to this, departments were siloed, with each operating independently of one another.

However, FinOps is now being redefined to encompass more than financial accountability with cloud spend. It is now a combination of financial and operational excellence that empowers finance teams to seize control of their time and money and focus more on unit economics and value, and less on repetitious projects. It’s leading more and more finance leaders to think about how to apply rigor and accountability to other types of spend as well.

FinOps responsibilities

FinOps, powered by finance automation, enables the following:

• Real-time financial reporting and forecasting: Real-time reporting will enable your team to make intelligent, informed decisions on critical issues like asset allocation.
• Seamless integration of tools: Create the ultimate integrated financial tech that can help your business maximize its operational efficiency.
• Faster accounting and EOM close process: Close your books faster and cut down on human error with a hyper-accurate and efficient closing process.
• Streamlined expense management: Distribute physical and virtual cards, with built-in card restrictions and spend limits. Pay bills and reimburse employees from one place. Create custom approval workflows and digitized expense policies.
• Financial accountability: Automatically identify wasteful spend and have instant visibility into the best rates and savings. Automatically categorize expenses with direct integrations.
• Automated expense reporting: Spend and capture receipts automatically. Cards and software work together to save hundreds of hours each month.
• Streamlined bill payments: Automatic bill creation, approvals, and accounting.

Benefits of FinOps

FinOps helps lead to more efficient unit economics for businesses through:

• Real-time visibility: Improved financial and operational systems can give you the ability to track your business in real-time. With up-to-date feedback, finance leaders can have access to the most accurate information available for measuring and advancing business performance.
• Increased efficiency: Making your finance team employees spend their time on mindless, rote to-do items is a waste of their talent and can leave them unsatisfied in their positions. Allowing your employees to work on projects that are challenging and have an impact on the business will help them feel more empowered and engaged in their work.
• Decreased wasted spend: By identifying issues like duplicate invoices, unused partner rewards, and spend increases, FinOps can help improve the ROI of your capital.

FinOps vs RevOps

RevOps, or revenue operations, refers to processes that are built to support increased revenue flow. It is a holistic, full-funnel approach to enhance every facet of the customer journey. Examples of RevOps in action include improving customer touchpoints, consolidating revenue tools, and eliminating department silos. While both FinOps and RevOps are designed to drive revenue, FinOps does so by streamlining finance workflows while RevOps optimizes go-to-market workflows.

Do you need FinOps?

You should consider adding FinOps to your business if:

• You feel like you have little control over or visibility into your company’s expenses
• You have manual or lengthy workflows that you’d like to optimize
• You have disparate systems that you’re using to manage your company expenses
• Talented members of your team are filling their days with repetitive, time-consuming work