Finance ↔ Operations Collaboration Guide

Why This Collaboration Matters

Finance ensures the organization stays solvent, efficient, and accountable. Operations ensures that everything runs smoothly, from supply chains and logistics to internal workflows. These teams are the backbone of strategic execution and resource allocation.

When aligned, Finance and Operations make smart decisions that drive profitability, improve efficiency, and reduce waste. When misaligned, spending gets disconnected from operational realities, forecasts are off, and bottlenecks multiply.

Benefits of Strong Collaboration

  • Smarter budgeting: Finance forecasts based on operational needs and constraints, not just historicals.

  • Resource optimization: Operations helps Finance see where costs can be saved through better processes or renegotiated contracts.

  • Real-time performance tracking: Shared dashboards help track spend, efficiency, and ROI in near real-time.

Perils of Misalignment

  • Finance imposes budget cuts without understanding operational impact.

  • Operations makes decisions that exceed budget or miss financial targets.

  • Disconnect between forecasts and reality leads to missed goals and strained teams.

Monthly Meeting Agenda: Finance ↔ Operations Sync

Duration: 60 minutes
Cadence: Monthly

Agenda:

  1. Forecast vs Actuals Review (15 mins)
    Compare budgets, spending, and delivery outcomes across operational initiatives.

  2. Upcoming Operational Needs (15 mins)
    Operations shares expected demand spikes, vendor changes, hiring needs, or expansion.

  3. Cost Optimization Discussion (10 mins)
    Identify areas where costs can be reduced without sacrificing efficiency.

  4. Tooling, Procurement, and Vendor Updates (10 mins)
    Align on purchases, renewals, and payment planning.

  5. Performance Metrics & Process Improvements (10 mins)
    Review shared KPIs and identify areas for better coordination or automation.

Collaboration Audit Checklist

Rate each item 1 (never) to 5 (always):

Audit QuestionScoreAre financial forecasts informed by operational plans and constraints?Are operational leaders consulted on budget decisions that affect execution?Is there visibility into spending, delivery timelines, and ROI for key initiatives?Do both teams meet regularly to track performance and cost efficiency?Are vendors and procurement jointly reviewed by both Finance and Ops?

Scoring:

  • 20–25: High-efficiency, aligned execution

  • 15–19: On track, but needs stronger shared planning

  • <15: High risk of waste, delays, or over/underspending

Joint KPIs / OKRs

Shared KPIs:

  • Budget variance (%) on operational projects

  • Cost per unit/output/process (e.g., cost per shipment, cost per hire)

  • Vendor contract renewal on-time rate

  • Operational efficiency ratio (output/input)

Sample Joint OKRs:

Objective: Improve operational performance through financial discipline

  • KR1: Reduce operational budget variance to <5%

  • KR2: Achieve 10% cost savings across top 3 vendor contracts

  • KR3: Maintain >95% SLA compliance on finance-approved operational projects

  • KR4: Implement cost-efficiency tracking dashboard used by both teams weekly

Finance, Operations, InterdisciplinaryFrancesca Tabor