{"id":9529,"date":"2023-04-12T03:49:15","date_gmt":"2023-04-12T07:49:15","guid":{"rendered":"https:\/\/www.sage.com\/en-ca\/blog\/?p=9529"},"modified":"2023-04-12T03:49:17","modified_gmt":"2023-04-12T07:49:17","slug":"early-stage-finops-best-practices-the-pros-and-cons-of-having-multiple-systems-vs-a-single-source-of-truth","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-ca\/blog\/early-stage-finops-best-practices-the-pros-and-cons-of-having-multiple-systems-vs-a-single-source-of-truth\/","title":{"rendered":"Early-stage FinOps best practices: the pros and cons of having multiple systems vs a single source of truth"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ca\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tEarly-stage FinOps best practices: the pros and cons of having multiple systems vs a single source of truth\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2023-04-12T03:49:15-04:00\">April 12, 2023<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"Early-stage FinOps best practices: the pros and cons of having multiple systems vs a single source of truth\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-ca\/blog\/early-stage-finops-best-practices-the-pros-and-cons-of-having-multiple-systems-vs-a-single-source-of-truth\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-ca\/blog\/author\/david-appel\/\">\n\t\t\t\t<img alt='David Appel' src='https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/themes\/sage\/dist\/images\/avatars\/author-fallback.svg' srcset='https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/themes\/sage\/dist\/images\/avatars\/author-fallback.svg 2x' class='avatar avatar-40 photo avatar-default entry-author__image' height='40' width='40' \/>\t\t\t\t<span class=\"entry-author__name\">David Appel<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<p class=\"\">As a new CFO of a SaaS startup, your financial operations will play a vital role in the company\u2019s success. To ensure you\u2019re on the right track and stay on top of your company\u2019s financial health, you need to implement best practices, optimize your operations, and leverage the right tools and technology.&nbsp;<\/p>\n\n\n\n<p class=\"\">This article will explore what financial operations are, why they matter, and how you can use automation and other best practices to streamline your operations.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">A deep dive into financial operations: what it is, why you need it, and best practices<\/h2>\n\n\n\n<p class=\"\">We\u2019ll begin with the basics around operational finance and then get into specific FinOps best practices you should follow.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What is financial operations (FinOps)?<\/h3>\n\n\n\n<p class=\"\">In a nutshell, <em>financial operations<\/em>, also known as FinOps, refers to the process of managing and optimizing the financial aspects of a business. It involves everything from budgeting and forecasting to cost allocation and cloud financial management. This ensures that a company is using its financial resources in the most efficient and effective way possible.&nbsp;<\/p>\n\n\n\n<p class=\"\">Recording and analysis can occur with past, present, or future transactions. With transactions that have already occurred, the role of operational finance is to store, organize, and report on those transactions as seamlessly as possible.&nbsp;<\/p>\n\n\n\n<p class=\"\">Unfortunately, many businesses struggle to obtain sufficient clarity around these crucial processes. The consequences of this can range from lost time and profits all the way to regulatory audits and fines. As a CFO, it\u2019s your responsibility to steer the company away from that scenario.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Why FinOps is important for SaaS businesses<\/h3>\n\n\n\n<p class=\"\">Companies might know in the abstract that they should invest more in their finance operations. But they often overlook the concrete benefits of doing so.<\/p>\n\n\n\n<p class=\"\">For SaaS startups, FinOps is particularly important because it helps them understand and manage their cloud spending. Cloud services can be expensive, and it\u2019s easy to overspend if you\u2019re not careful. FinOps provides SaaS startups with the tools and processes they need to save money and optimize their cloud services, for instance.&nbsp;<\/p>\n\n\n\n<p class=\"\">Additional reasons FinOps is critical for SaaS businesses include:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Regulatory and tax peace of mind<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img decoding=\"async\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2023\/04\/pasted-image-0-2-1024x575.png\" alt=\"\" class=\"wp-image-9563\"\/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Streamlined reporting and forecasting<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Significantly reduced time expenditures<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Elimination of manual accounting errors<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Stronger profits and performance as a result of more complete data<\/li>\n<\/ul>\n\n\n\n<p class=\"\">Business processes tend to go more smoothly when best practices are observed, and operational finance is no exception. Let\u2019s look at a few that you should be following as a forward-thinking CFO.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">FinOps best practices<\/h3>\n\n\n\n<p class=\"\">To optimize your financial operations, first make sure your finance team is aligned with your product team. They need to work together to develop budgets and forecasts that accurately reflect the company\u2019s financial situation. Next, it\u2019s important to invest in financial planning software that can automate some of the number-crunching work. <a href=\"https:\/\/www.sage.com\/en-ca\/sage-business-cloud\/intacct\/\">Sage Intacct is an excellent option for SaaS startups.<\/a> Finally, make sure you have a solid FinOps foundation in place. This includes building a FinOps team, developing a target operating model, and following best practices for budgeting and forecasting.\u00a0<\/p>\n\n\n\n<p class=\"\">To ensure the success of your SaaS startup, you should base any operational finance decisions on a few core principles. Four of the most important are:&nbsp;<\/p>\n\n\n\n<p class=\"\">1: <strong>Automate every FinOps process that can be automated.<\/strong> Invest in financial planning software that can help you automate budgeting, forecasting, and financial reporting.<\/p>\n\n\n\n<p class=\"\">2: <strong>Establish a robust control architecture for transactions.<\/strong> Build operating models that provide transparency into financial data and help you make informed decisions.&nbsp;<\/p>\n\n\n\n<p class=\"\">3: <strong>Use role-based dashboards to maximize efficiency.<\/strong> Leverage cloud financial management tools that allow you to track your cloud spending in real-time and optimize cloud cost management.\u00a0<\/p>\n\n\n\n<p class=\"\">4: <strong>Ensure that any operational finance tools and processes are scalable.<\/strong> Digitize your core financials with a cloud-native financial management system that seamlessly integrates with other business systems for scalability as your company grows.<\/p>\n\n\n\n<p class=\"\">Here\u2019s a quick but useful guide to financial operations for SaaS startups.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">A SaaS startup guide to optimize financial operations<\/h2>\n\n\n\n<p class=\"\">Since most SaaS companies operate as recurring revenue firms, they have unique challenges and opportunities regarding operating model finance.&nbsp;<\/p>\n\n\n\n<p class=\"\">Knowing how to capitalize on these is something that any SaaS CFO should know how to do\u2013let\u2019s get started.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Is FinOps just number crunching?<\/h3>\n\n\n\n<p class=\"\">Optimizing financial operations requires a combination of people, processes, and technology. FinOps is not just about number-crunching; it\u2019s also about identifying opportunities for operational finance automation.\u00a0<\/p>\n\n\n\n<p class=\"\">FinOps acts as a vital profit driver by:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Helping companies track and improve their SaaS KPIs<\/li>\n\n\n\n<li>Acting as \u201cconnective tissue\u201d between the company and its stakeholders<\/li>\n\n\n\n<li>Assisting with the often-complex requirements of ASC 606 and IFRS 15<\/li>\n\n\n\n<li>Speeding up the cash flow cycle and shortening close time&nbsp;<\/li>\n<\/ul>\n\n\n\n<p class=\"\">Clearly, FinOps has a substantial role to play in modern companies.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Operational finance automation opportunities <\/h3>\n\n\n\n<p class=\"\">One of the keys to optimizing financial operations in a SaaS startup is automation. The right tools will enable you to track your cloud spending in real-time and make informed adjustments as needed.&nbsp;<\/p>\n\n\n\n<p class=\"\">What are some of the main incentives and opportunities awaiting accounting teams who embrace FinOps automation?&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Seamless expansion into profitable overseas markets<\/li>\n\n\n\n<li>Hassle-free global multi-entity accounting&nbsp;<\/li>\n\n\n\n<li>Flexibility around billing models, including hybrid billing\u00a0<\/li>\n\n\n\n<li>The ability to capitalize on cost data patterns and fight churn&nbsp;<\/li>\n<\/ul>\n\n\n\n<p class=\"\">Operational finance automation is all about giving teams the freedom and agility to meet whatever challenges might be coming down the pike. By automating tasks, SaaS startups can save money and optimize their resources.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">FinOps tools and tech stack <\/h2>\n\n\n\n<p class=\"\">When optimizing your firm\u2019s financial operations as a CFO, nothing matters more than your choice of FinOps tools and tech stack. Let\u2019s see why it\u2019s important to get this choice right as early as possible.\u00a0<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Need for financial planning software<\/h3>\n\n\n\n<p class=\"\">As mentioned earlier, financial planning software is essential for SaaS startups. <a href=\"https:\/\/www.sage.com\/en-ca\/sage-business-cloud\/intacct\/\">Sage Intacct is a great option<\/a> because it\u2019s easy to use and helps finance professionals increase efficiency and drive growth for their organizations.<\/p>\n\n\n\n<p class=\"\">An ideal tech stack will be able to handle the rigorous demands and heavy regulations involved in operational finance. Without financial planning software, SaaS companies will find it difficult to achieve four very important goals:&nbsp;<\/p>\n\n\n\n<p class=\"\">1: Pull off a smooth and profitable IPO.<\/p>\n\n\n\n<p class=\"\">2: Stay out of regulatory trouble.<\/p>\n\n\n\n<p class=\"\">3: Stay at the industry\u2019s forefront as tech continues to evolve.<\/p>\n\n\n\n<p class=\"\">4: Present investors with data-supported reasons to back the firm.&nbsp;<\/p>\n\n\n\n<p class=\"\">For these reasons and many others, companies that choose to go without an automated tech stack are setting themselves up for long-term failure. However, as a SaaS CFO, you can steer your company in the other direction.<\/p>\n\n\n\n<p class=\"\">By implementing FinOps best practices, optimizing your financial operations, and using the right tools and tech stack, you can ensure that your startup stays on track financially. This will enable you to focus on growing your business and achieving your long-term goals.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Sage Intacct: Making SaaS accounting easy<\/h3>\n\n\n\n<p class=\"\">Sage Intacct uses start-to-finish automation to help CFOs and finance teams turn operational finance into a source of increased profitability and productivity.&nbsp;<\/p>\n\n\n\n<p class=\"\"><\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to the Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p class=\"cta-content__title\">Get a roundup of our best business advice in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-8949a954-88b2-43bb-8b8a-77c53eb34350\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Learn the best practices for optimizing your finance operations and FinOps team to increase efficiency and drive success in your SaaS startup.<\/p>\n","protected":false},"author":1433,"featured_media":9565,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[7],"tags":[266,258,171],"business_type":[99],"lilypad":[],"context":[],"industry":[],"persona":[],"imagine_tag":[],"coauthors":[314],"class_list":["post-9529","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-business-finances","tag-cloud-financial-management","tag-cloud-technology","business_type-medium-business"],"sage_meta":{"region":"en-ca","author_name":"David Appel","featured_image":"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2023\/04\/GettyImages-1261583718-1-708x708-1.jpg","imagine_tags":[]},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice Canada English","distributor_original_site_url":"https:\/\/www.sage.com\/en-ca\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/posts\/9529","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/users\/1433"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/comments?post=9529"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/posts\/9529\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/media\/9565"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/media?parent=9529"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/categories?post=9529"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/tags?post=9529"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/business_type?post=9529"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/lilypad?post=9529"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/context?post=9529"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/industry?post=9529"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/persona?post=9529"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/imagine_tag?post=9529"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/coauthors?post=9529"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}