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Maxio's Financial Operations Maturity Curve

Financial Operations, or “FinOps,” challenges are among the most common and the most impactful. We’ve compiled our list of common FinOps challenges and how you can work to avoid them.

Finance and accounting
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Team Maxio

July 27, 2020

Where Do You Fall on the Financial Operations or “FinOps” Maturity Curve? 

From founders’ scuttles to running out of money, there are a plethora of challenges you might encounter when embarking on a new business venture. Financial Operations, or “FinOps,” challenges are among the most common and the most impactful. So impactful that there’s tons of literature out there detailing FinOps challenges and how to avoid them.  

We’ve compiled our list of common FinOps challenges and how you can work to avoid them. We’ve also put together a FinOps maturity curve to help you understand where you should be in terms of maturity based on the size and sophistication of your business. 

4 Common Financial Operations Challenges that Startups Face

4 Financial Challenges4 Financial Challenges

Revenue Recognition

Revenue Recognition, often referred to as Rev Rec or Revenue Rec, is an accounting principle and the process for recognizing the amount of a transaction or contract at a point in time or over time as the revenue is “earned.” 

Standards boards and regulatory agencies such as the Financial Accounting Standards Board (FASB) and the SEC have established complex rules and guidelines to rein in aggressive or improper revenue recognition actions which may inflate or misstate the actual corporate performance of public companies.

While simple in principle, revenue recognition can get really complicated when you factor in non-standard contract lengths, unusual billing frequencies, early termination clauses, mid-term upgrades, downgrades, renewals, discounts, re-allocations, etc.  

It’s common for startups to manage revenue recognition and other FinOps in spreadsheets. However, this quickly becomes unmanageable as your business starts to scale. 


For many startups, Series A is the first time they really begin to think critically about the state of their financial operations. Embarking on due diligence processes is scary, stressful, and downright frustrating at times. But it doesn’t have to be. 

There are a few sure-fire ways to make due diligence smoother. The first is to have a buttoned-up revenue recognition policy in place. Your revenue recognition policy is where you establish the rules that govern the consistent application of the ASC 606 framework at your company. Maxio offers a free, 30+ page revenue policy that you can download and use when creating your own policy. 

Another thing you can do is think about what your investors are looking for from a SaaS metrics perspective. Because there’s no governing body that defines SaaS metrics, it can be challenging to nail down an exact calculation.  There are commonly used terms by many investors (ARR, MRR, LTV, CAC, Cohorts, etc.), but what they actually mean at each company can vary widely. The key is to ensure consistency in how your company defines and applies each metric.  

Maxio has a robust analytic and reporting function baked into the platform that allows you to generate accurate, trustworthy SaaS metrics with just a few clicks. Formula errors begone. 

AR Management 

Collections. They’re the least sexy part of running a business, but arguably the most important. Like revenue recognition, many startups manage AR in spreadsheets, which can lead to missed invoices, lots of time wasted, and enough frustration to last a lifetime.  

Maxio's AR Management module allows you to set custom billing frequencies at the customer level, send invoices, create automated outreach emails (cadences) & reminders, and collect payment all in one, easy to use platform. 

Efficient AR Management is a great way to ensure the longevity of your cash runway. Reducing AR aging and decreasing DSO will ensure you have the steady stream of cash flow your business needs. 

Tech Stack Integrations 

You’re definitely on the right track if you’ve been able to button up your rev rec, SaaS metric definitions, and you have a robust AR Management process.  But is it all in a spreadsheet or in separate and disconnected systems?  You’ll never be able to scale if your financial operations systems don’t play well together.

Maxio sits between your CRM and GL. Maxio takes all the information entered in your CRM and seamlessly automates the calculation of your rev rec and SaaS metrics all while making it easy for your customers to bill and collect from your customers. Maxio eliminates the error-prone and manual effort of managing all these processes in spreadsheets.  

The Financial Operations Maturity Curve: Where Should I Be Right Now?

Finops maturity curveFinops maturity curve

Financial Operations Maturity Curve Breakdown

FinOps Maturity ChartFinOps Maturity Chart

There are a lot of aspects to consider when trying to mature the financial operations of your business. Obviously, you can’t tackle all of these things at once, and you don’t need to. We’ve broken out the three main aspects of FinOps maturity, revenue, order-to-cash, and analytics by company stage and size in the following graph:  

As can be expected, the financial operations of your business should mature as you grow in size and stage. A company with less than $500K in ARR is not going to operate at the same level of sophistication as a $100M ARR company.  

However, if your goal is growth, you’re going to need to implement a FinOps process and technology that can scale alongside you. 

Looking to improve your FinOps?  Talk to an expert.

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