Jag Sodhi
Wm Morrisons Supermarket
This playbook provides guidance on how to ensure that cloud spend has integrated into your organization’s financial management processes and systems by way of comparing the total cloud spend recorded as a Journal in the accounting system is equal to total cloud spend for the month for the CSP (AWS, Google Cloud, Azure or Oracle Cloud Infrastructure etc).
Calculating the General Ledger Recharge Rate should show 100% recharge rate.
Specifically, this integration occurs when the cloud spend recorded in cloud cost management tools, whether Cloud Service Provider (CSP) native, third-party SaaS, or a custom built solution, aligns with accounting records (aka General Ledger).
This playbook is not a definitive guide to stipulate what metric is correct for an organization. Rather, it provides recommendations on how to execute cloud financial management governance. Nor does this playbook give guidance on how to re-allocate shared costs or cross charge related products, cost centers, domains, business units or departments.
This playbook covers plays for Amazon Web Service (AWS), Google Cloud (GCP), Oracle Cloud Infrastructure (OCI) and Azure.
Any individual/team that is responsible for charging back the cloud costs through to the organization’s accounting process and system (i.e., General Ledger).
Access to the CSP cost management native tools e.g. AWS Billing and Cost Management or any third-party cloud cost management tool or custom built solution and access to or visibility into accounting records (aka General Ledger).
Note: Please refer to the FOCUS standards to import consistent invoicing and data from multiple CSP
The FinOps Practitioner must be enabled with the ability to coordinate with the Finance team to facilitate the integration of cloud cost data with the accounting process and system.
The FinOps Practitioner should be familiar with the organizations cost dataset either unblended costs, amortized costs or blended cost. To help you decide the view please refer to Understanding your AWS Cost Datasets: A Cheat Sheet
This section provides information that contributes to the success of this Playbook; the information here may include specific datasources, reports or any relevant input
Links to useful information in reference to this playbook.
**As an organization you can view your total costs dataset as unblended costs, amortized costs or blended costs. Unblended costs represent your costs on a cash basis of accounting whereas amortized costs represent your costs on an accrual basis. To help you decide the view please refer to the following AWS Documentation.
Note: majority of organizations use the unblended cost dataset.
This activity is about verifying the amount of cloud spend value posted to the Finance accounting system (aka General Ledger). This is undertaken by the FinOps Practitioner persona if they have access to the accounting system (aka General Ledger) or by Finance persona.
If these steps are to be undertaken by the Finance personna, then the FinOps Practitioner will need to coordinate with the Finance personna by providing the total costs and usage value for the given time period, e.g. $72,184.58. This amount will be verified to the amount posted to the accounting system (aka General Ledger) for the given time period.
Within the accounting system, perform a query on the account code (nominal code) or perform a Journal inquiry to obtain the amount posted. Make a note of the amount posted to the accounting system e.g. $72,184.58.
Using the two values captured from the cloud console & the accounting system work out the General Ledger Recharge Rate.
Total Cloud Spend recorded as a journal in the accounting system / Total cloud spend for the month in AWS X 100%.
e.g. $72,184.58 / $72,184.58 x 100% = 100% charge to the accounting system.
Note: For the above example, this illustrates that there is zero difference between cloud spend in cloud service provider vs. accounting system.
This playbook should be run on a monthly basis (see Functional Activity) to ensure that all cloud total costs and usage values are posted to the accounting system (aka General Ledger) for the given time period.
It can also be run based on the accounting period e.g. 27th November to 24th December, where organization reports outside of the calendar monthly accounting periods.
The indicator of success is when there is zero difference between cloud spend in cloud service provider vs. accounting system.
If the difference between cloud spend in cloud service provider vs. accounting system is not zero, then this implies that not all or too much cloud cost and usage value has been posted to the accounting system. This needs further investigation as to why. A corrective action in the accounting system is the most likely outcome.
Depending upon the operating & reporting currency that your organization uses to record financial transactions in, you may have to convert the cost and usage value to your reporting currency.
e.g. if you operate and report in the UK, the cost and usage value of $72,184,58 for December would need to converted to GBP £ Sterling, using an currency exchange rate from Treasury or Finance team such as (USD to GBP 0.79354) £57,281.35.
Proceed then to the accounting system and query on the account code (nominal code) or perform a Journal inquiry should be sufficient to obtain the amount posted. Make a note of the amount posted to the accounting system e.g. £57,281.35.
Using the two values captured from the cloud console & the accounting system work out the General Ledger Recharge Rate.
Total cloud spend recorded as a journal in the accounting system / Total cloud spend for the month in AWS X 100%.
e.g. £57,281.35 / £57,281.35 x 100% = 100% charge to the accounting system.
We’d like to thank the following people for their help with this Playbook:
We’d also like to thank our supporters, Laura Mills, David Lambert, Taylor Houck, Brian D’Altilio, and James Gambit.
Invoicing & Chargeback