Revenue Operations for Growing Companies: Aligning Sales, Marketing, and Finance
Revenue Operations (RevOps) breaks down the walls between sales, marketing, and finance. When done right, it creates predictable revenue, accurate forecasts, and faster growth.
In most companies, sales, marketing, and finance operate in silos. Marketing generates leads without knowing which convert. Sales forecasts miss because they're disconnected from capacity. Finance builds models without understanding pipeline dynamics.
Revenue Operations (RevOps) is the function that connects these teams around a shared goal: predictable, efficient revenue growth. It's not just a new name for sales ops—it's a fundamental shift in how companies think about their go-to-market engine.
The RevOps Impact
Companies with aligned RevOps functions see 19% faster revenue growth and 15% higher profitability than those with siloed operations. The value comes from better data, faster decisions, and eliminated inefficiencies.
What is Revenue Operations?
RevOps is the operational backbone of your revenue engine. It owns the processes, systems, and data that connect marketing, sales, and customer success.
Core RevOps Responsibilities
Systems & Data
Own the tech stack: CRM, marketing automation, CPQ, and data infrastructure. Ensure clean, unified data across teams.
Process Design
Define handoffs between teams: MQL to SQL, SQL to opportunity, close to onboarding. Eliminate gaps and friction.
Analytics & Reporting
Build dashboards and reports that give visibility into pipeline, conversion, and performance.
Forecasting
Create reliable revenue forecasts by combining pipeline data with historical conversion rates.
Compensation
Design and administer commission plans that align rep behavior with company goals.
Territory & Capacity
Plan territories, set quotas, and model hiring needs to hit revenue targets.
RevOps vs. Sales Ops
| Dimension | Sales Ops | Revenue Ops |
|---|---|---|
| Scope | Sales team only | Sales + Marketing + CS |
| Data Ownership | CRM data | Full customer lifecycle data |
| Primary Goal | Sales efficiency | Revenue predictability |
| Reports To | VP Sales | CRO or CEO |
The RevOps Tech Stack
The right tech stack enables RevOps to do its job. The wrong stack creates data silos and manual workarounds that defeat the purpose.
Core Systems
CRM (Salesforce, HubSpot)
The system of record for customers and opportunities. Everything else integrates with the CRM. Data quality here determines RevOps effectiveness.
Marketing Automation (Marketo, HubSpot)
Captures lead activity, scores prospects, and tracks attribution. Must sync bi-directionally with CRM for full funnel visibility.
CPQ (Configure-Price-Quote)
Standardizes pricing, discounting rules, and quote generation. Critical for deal desk efficiency and margin protection.
BI / Analytics (Looker, Tableau, Metabase)
Combines data from multiple sources for cross-functional reporting. Enables self-serve analytics for revenue teams.
Forecasting Tools (Clari, Gong)
AI-powered pipeline analysis and forecast modeling. Identifies at-risk deals and improves prediction accuracy.
Tech Stack Warning
More tools doesn't mean better RevOps. Every additional system creates integration complexity and potential data quality issues. Start with core systems and add incrementally based on specific pain points.
Sales Forecasting for Finance
Finance teams need reliable revenue forecasts to manage cash, plan expenses, and communicate with the board. RevOps bridges the gap between sales optimism and financial accuracy. For detailed guidance, see Sales Forecasting for Finance Teams.
Forecast Methodologies
Bottom-Up (Pipeline)
Sum of individual deals × probability. More accurate for near-term, but depends on rep judgment.
Best for: Current quarter
Top-Down (Capacity)
Reps × Quota × Expected Attainment. More stable for planning, but misses deal-level dynamics.
Best for: Next quarter and beyond
Forecast Categories
| Category | Definition | Expected Conversion |
|---|---|---|
| Commit | Will close this period (verbal/written agreement) | 90%+ |
| Best Case | Likely to close if everything goes well | 60-70% |
| Pipeline | Qualified but uncertain timing | 20-40% |
| Upside | Could pull in if stars align | 10-20% |
Commission and Compensation
Commission plans are where RevOps and Finance must collaborate closely. Plans must motivate reps while protecting company economics. See Sales Commission Plans: Structures, Costs, and Financial Impact.
Commission Structure Types
Linear Commission
Same rate from dollar one. Simple but doesn't incentivize overperformance.
Example: 10% of every dollar sold
Accelerators
Higher rates above quota. Rewards top performers but increases cost of overperformance.
Example: 10% up to quota, 15% above quota
Thresholds
Commission only kicks in after minimum performance. Protects against paying underperformers.
Example: 0% until 50% of quota, then 10%
Commission Financial Impact
- Budget as % of revenue: Total commission typically 8-15% of new business revenue
- OTE (On Target Earnings): Total compensation at 100% quota; typically 50/50 base/variable split
- Quota:OTE ratio: Usually 4-6x (meaning $500K quota = $100K variable comp at 100%)
- Accrual timing: When to recognize commission expense (bookings vs. revenue)
Revenue Recognition Alignment
RevOps must understand how deals translate to recognized revenue. The gap between "closed-won" and "revenue" creates confusion and misalignment. See ARR vs. Bookings vs. Revenue: Understanding the Differences.
Key Distinctions
| Metric | Definition | When Recognized |
|---|---|---|
| Bookings | Total contract value signed | At contract signing |
| ARR | Annualized recurring revenue | When subscription starts |
| Revenue | GAAP revenue recognized | As service is delivered |
| Cash | Actual payment received | Per payment terms |
Example: The Gap
A 3-year, $300K deal signed in December creates $300K bookings, $100K ARR, ~$8K December revenue (if starting Dec 15), and possibly $0 December cash (if Net 30). Same deal, four different numbers.
RevOps Reporting and Metrics
RevOps should own a unified dashboard that gives visibility across the entire revenue engine. See Pipeline Metrics for Finance: What CFOs Need to Know.
Essential RevOps Metrics
| Metric | Formula | Benchmark |
|---|---|---|
| Pipeline Coverage | Pipeline ÷ Quota | 3-4x for current quarter |
| Win Rate | Won ÷ (Won + Lost) | 20-30% typical |
| Sales Cycle | Avg days from opp to close | Varies by deal size |
| Lead-to-Opp Rate | Opps ÷ MQLs | 15-25% |
| Quota Attainment | Actual ÷ Quota | 70-80% of reps at 100%+ |
When to Hire RevOps
RevOps is typically needed when go-to-market complexity outpaces ad-hoc management. Signs you need dedicated RevOps:
RevOps vs. Finance Handling It
Finance Can Handle (Early Stage)
Basic forecasting, simple commission plans, manual reporting. Works until complexity exceeds bandwidth.
Need Dedicated RevOps
Complex GTM motion, multiple products/segments, sophisticated tech stack, real-time reporting needs.
Frequently Asked Questions
What is Revenue Operations (RevOps)?
Revenue Operations (RevOps) is the strategic alignment of sales, marketing, and customer success operations to drive predictable revenue growth. RevOps unifies processes, systems, and data across go-to-market teams, eliminating silos that cause forecasting errors, data inconsistencies, and misaligned incentives.
What is the difference between ARR and bookings?
ARR (Annual Recurring Revenue) is the annualized value of active subscriptions—it reflects current revenue run rate. Bookings are the total contract value of new deals signed in a period. A $120K 3-year contract is $120K in bookings but only $40K in Year 1 ARR. Finance cares about ARR for forecasting; sales often focuses on bookings for compensation.
How do I create an accurate sales forecast?
Use weighted pipeline forecasting: multiply deal value by stage-specific close probability. Improve accuracy by: analyzing historical conversion rates by stage, adjusting for rep-level performance patterns, incorporating deal age and engagement signals, and reviewing with sales leaders weekly. Most companies forecast 60-80% of pipeline as realistic.
When should a startup hire a RevOps person?
Consider RevOps when: you have 3+ sales reps, the CEO spends 5+ hours/week on sales operations, your CRM data is unreliable, forecasting is consistently wrong, or sales and finance can't agree on numbers. Most companies hire RevOps between Series A and B, typically at $2-5M ARR with 5-10 sales reps.
How should sales commissions be structured?
Standard SaaS commission structure: 10-15% of first-year ACV, with accelerators above quota (1.5-2x rates). Pay on booking, collection, or a blend. SDRs typically earn $500-1,500 per qualified meeting or a percentage of deals sourced. Ensure commission plans align with company goals—if you want multi-year deals, compensate on TCV not just ACV.
What is ASC 606 and why does it matter for SaaS?
ASC 606 is the revenue recognition standard requiring companies to recognize revenue when performance obligations are satisfied, not when cash is collected. For SaaS, this means recognizing subscription revenue ratably over the contract period. A $120K annual contract is recognized as $10K/month, not $120K upfront. Critical for accurate financial reporting.
What RevOps metrics should I track?
Essential RevOps metrics: Pipeline coverage (3-4x target), win rate by stage, sales cycle length, quota attainment distribution, forecast accuracy, CAC payback period, net revenue retention, and rep productivity (deals per rep, revenue per rep). Track trends over time, not just point-in-time snapshots.
How do I align sales and finance on revenue numbers?
Create a single source of truth by: defining terms precisely (ARR, MRR, bookings, revenue), documenting when deals count (signed, start date, first payment), using one system for both teams to reference, reconciling monthly with documented variances, and involving finance in deal desk decisions for complex contracts.
What CRM should a startup use?
Salesforce is the standard for Series A+ companies selling to enterprise—it scales and integrates with everything. HubSpot is better for SMB sales with integrated marketing. Pipedrive or Close work for early-stage outbound-focused teams. Choose based on your sales motion and integration needs. Migration is painful, so choose for scale.
How do I calculate net revenue retention (NRR)?
NRR measures revenue from existing customers: (Starting MRR + Expansion - Contraction - Churn) / Starting MRR. Example: $100K starting MRR + $15K expansion - $5K downgrades - $8K churn = $102K / $100K = 102% NRR. Good SaaS NRR is 100-110%; great is 120%+. NRR above 100% means you grow even without new customers.
Need Help Aligning Finance and Sales?
Eagle Rock CFO helps growing companies build the financial infrastructure that supports predictable revenue growth. From forecasting to commission planning, we bridge the gap between sales and finance.
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