FinOps tools: How mature is your tech stack?

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Published on May 9, 2024

Finance operations - or FinOps - consists of accounting, financial planning, and analysis of a company's financial health. It often involves the revenue cycle, billing, tax compliance, and regulatory requirements, among many other processes.

Finance operations play a key role in making strategic business decisions to drive growth.

But FinOps are often riddled with a lot of labor-intensive and repetitive tasks. If done manually, these processes require juggling between multiple data sources, are prone to errors, and can be time-consuming.

And that's why you need a full, high-functioning FinOps tech stack. In this article, we'll examine what to look for as your build your finance toolkit.

The evolution of company FinOps

In the early growth stages, you may rely on spreadsheets for your day-to-day FinOps. But as you scale and your finance workflows grow more complicated, involving multiple functions, you'll soon be drowning in a million spreadsheets that are time-consuming as well as error-prone.

Relying only on spreadsheets as you scale ultimately leads to misalignment and missed insights.

Finance operations in the subscription business model play a critical role in plugging all the revenue leaks in the revenue cycle. In a rapidly scaling SaaS business, there are several complex FinOps workflows. Take processing refunds or reverse taxes, for example. And let's not forget reconciliation and revenue recognition for the recurring revenue model.

Traditional finance operations are just not cut out for that.

Signs you need to upgrade your FinOps tech stack

These are some of the telltale signs that your FinOps workflows are starting to develop cracks and inefficiencies:

Your current systems are hard to use and difficult to change.
You spend a lot of time reconciling asynchronous data in multiple spreadsheets.
It takes too long to collect and manage data for essential processes like budgeting and forecasting, and it's full of errors.
Reporting and analytics is a painful, repetitive, and multi-day process. You spend a lot of time correcting and reproducing reports.

If you identify with one or more of these telltale signs, then it's time you start re-thinking your FinOps tech stack.

Things to consider when choosing FinOps tools

Your FinOps tech stack should enable you to scale as you experiment and implement process changes across functions.

These are the things to keep in mind when choosing your FinOps tech stack:

Automation

Depending on your specific workflows, you can decide what to automate and what not to, but the automation should save time and let you focus on strategic decision-making. Automation also goes a long way in eliminating inconsistencies and plugging revenue leaks.

Take a look at how CircleLoop automated revenue operations to align sales and operations seamlessly.

Integrations

Finance teams have to extract data from multiple systems across functions, such as billing software, HRIS, spend management tools, and more.

Integrations play a vital role in seamlessly collecting all the information without creating new workflows each time or breaking existing workflows.

Compliance

As a scaling business, you want to explore opportunities across the globe. Your FinOps tech stack should enable you to do so without having to worry about regulatory requirements like tax and payment compliance.

Strategic alignment

Every business has goals and strategic initiatives to achieve those goals. The tech stack you choose should align with your strategic vision.

Think long-term and choose a tech stack that will scale with your organization's growth.

How to make your FinOps a well-oiled machine

So, what should an ideal FinOps tech-stack look like? Considering that FinOps teams work with multiple functions, the tech-stack should consist of the following:

Accounting software

Accounting automation software forms a central part of the tech stack—an accounting software tracks financial transactions and the business' general ledger.

ERP accounting systems help connect information from all functions and processes. They let you make timely and data-driven decisions. Xero, Quickbooks and NetSuite are some well-known examples.

Accounts receivable/payable management

Processing invoices is a time-consuming activity. AR/AP management software can manage complex workflows such as refunds and one-time add-ons. They also save time by reconciling a large volume of invoices.

AR/AP management software can also identify at-risk customers by assessing credit so that you can reassess your collection efforts and optimize your cash flow.

Tax software

Tax software determines taxes, helps in compliance, reporting, and tax data management. They often are supported by integrations with systems across functions to become the single source of truth for all things tax. As you discover new business territories globally, tax software should also support different countries and regions' tax compliance requirements.

Having robust tax software in place will help you breeze through audits and regulatory requirements.

Spend management

Spend management software like Spendesk streamlines vendor as well as employee spend requests and approval processes. They help you get visibility over spending across functions, and effectively reduce unnecessary spending.

Payroll management

Payroll management software organizes all the tasks related to employee payroll and tax filing. It's often integrated with the Human Resources Information System (HRIS). It automates all the micro-administrative functions that are involved in payroll processing and makes the process error-free.

Billing management and analytics

Billing management systems manage all the billing operations for your organization. For subscription businesses, billing management systems like Chargebee automate the recurring billing engine and tackle all the complex scenarios such as prorations, payment terms, and dunning management. A robust billing system becomes a liaison between the GTM functions and FinOps to plug any revenue leaks in your revenue cycle.

Billing analytics help you monitor the performance of your business with relevant metrics. It helps to surface trends and red flags that all functions should be aware of to ensure smooth sailing for your business.

Conclusion

Finance operations play a critical role in your revenue engine. It's time they moved out of spreadsheets.

Armoured with a complete tech stack, finance operations will enable your business to scale new heights.

Finance tools & tech

Nupura Ughade

Nupura Ughade is a subscription industry enthusiast and a senior content marketer at Chargebee . In her free time, she can be found painting or reading in a nook.

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Close the books 4x faster, collect over 95% of receipts on time, and get 100% visibility over company spending.

Business spending includes different types of spend:

Strategic spend is usually centralized and managed by C-level executives with dedicated spenders. It can be managed through invoices, wire transfers and purchase orders.
Discretionary and operational spend is also centralized, but spending is done by managers and employees during their daily professional lives. It includes card purchases, subscription payments, digital ads, events, office orders, and business travel.
Expenses, unlike strategic spend, represent a significant amount of small purchases that can be difficult to track. These include card payments, expense claims, team perks, and travel expenses.

Spend management is the process through which companies manage business spending. It takes into account the end-to-end process when someone needs to spend: getting purchase approvals, providing payment methods, submitting and processing invoices, submitting and reimbursing expense claims, chasing receipts and invoices for reconciliation, and assigning the right analytical codes, expense accounts, and VAT rates to all those expenses for bookkeeping.

Spend management tools become necessary when the number of employees increases and the need for clear processes, better visibility and control starts to grow for finance teams.

Employees need flexible, user-friendly tools, in order to spend easily and be empowered to do their job.

That’s when Spendesk can be a good fit.

Spendesk provides payment methods for modern businesses, and a powerful platform for finance teams to manage spending. This includes debit cards to replace old-fashioned company credit cards, virtual cards for online purchases, and automated expense reports for unexpected payments.

For employees
Employees no longer need to spend out-of-pocket. They request funds for a particular purchase, and can use their Spendesk card or virtual card to execute the payment.

If for any reason the employee can’t use their Spendesk card, they snap a picture of the receipt via the Spendesk mobile app and create an expense claim on the spot. This is sent directly to their manager for validation, and on to the finance team.

For finance teams
Each employee has their own Spendesk profile and debit expense card. So unlike the company credit card, you always know who’s spending company money.

The platform lets controllers create spending limits and pre-approvals. C-Level executives or managers will have a different level of pre-approved spend from other staff. Should a team member need to go over their pre-approved budget, they can make a request to their manager via the mobile app or the platform online.

When an expense is made with a Spendesk card, the employee simply snaps a picture of the receipt at the time of purchase. Which means no more lost receipts.

Finance teams can see real-time company spend and follow up on missing receipts or invoices by sending reminders to employees via the platform.

Reviewing expenses is also easier as finance teams can group expenses and assign them the right VAT rates and expense accounts before exporting everything easily to their accounting tools.

Spendesk streamlines the whole business spending process, making spend management intuitive, simple and efficient.