This is Part 4 of my 6-part series on business literacy for DevRel. Start with Part 1 if you missed it.
Time for everyone's favorite topic: money. Specifically, how companies think about money, track money, and make decisions about money.
If your eyes are already glazing over, I get it. When I was first a sysadmin, I thought finance was just "the people who make it difficult to buy the things I need." As a DevRel professional, you might think finance is "the people who keep asking me to justify my conference budget."
However, understanding finance might be the single most important business skill you develop. Because at the end of the day, no matter how amazing your DevRel work is, if you can't speak the language of money, you're going to struggle to advocate for your team, defend your budget, and demonstrate your value.
What Finance Actually Does
Finance manages the company's money. All of it. They track where money comes from (revenue) and where it goes (expenses). They plan for the future (budgeting). They make sure the company stays financially healthy. They report to investors or the board on the company's financial performance.
But finance isn't just about counting beans (though there is some bean counting). Strategic finance helps the company make smart decisions about where to invest resources. They're asking questions like:
- "Should we hire more sales people or invest in marketing?"
- "Can we afford to expand to a new market?"
- "Which initiatives are giving us the best return on investment?"
For a company to survive, revenue needs to exceed expenses. Finance's job is to make sure that happens (or at least make sure the company is on a path to make it happen, because early-stage companies often operate at a loss while they're growing).
Meet the Finance Team
CFO (Chief Financial Officer): The top finance executive. They own the overall financial strategy and health of the company. They report to the CEO and often the board. When big financial decisions get made, the CFO is in the room.
VP Finance / Controller: Usually manages day-to-day finance operations. They might oversee accounting, financial planning, and the finance team members.
FP&A (Financial Planning & Analysis): These folks do the budgeting, forecasting, and financial modeling. When you submit your budget request, FP&A is reviewing it. When the company is trying to figure out if they can afford something, FP&A is running the numbers.
Accounting Team: They track and record all financial transactions, make sure bills get paid, ensure compliance with financial regulations, and generally keep the books in order.
How DevRel Interacts With Finance: Mostly through budget requests, expense management, and ROI discussions. Unless your company is really small, you probably won't interact with the CFO regularly, but you might work with FP&A on planning and budgets.
Understanding the P&L (Profit and Loss Statement)
A P&L is basically a report card for how the company is doing financially. Here's the simple version:
Revenue (money coming in)
minus Expenses (money going out)
equals Profit or Loss
If revenue is bigger than expenses, you have profit. If expenses are bigger than revenue, you have a loss.
Now let's break down the expense side, because that's where you live:
Cost of Goods Sold (COGS): The direct costs of delivering your product or service. For SaaS companies, this is things like cloud infrastructure, hosting costs, and support. Generally, you want this to be relatively low compared to revenue.
Operating Expenses (OpEx): Everything else it costs to run the business:
- Sales & Marketing: Sales team salaries, marketing programs, advertising, events, tools
- Research & Development (R&D): Engineering team, product team, technical infrastructure
- General & Administrative (G&A): Finance, HR, legal, executive team, office costs
DevRel usually shows up in Sales & Marketing or sometimes in R&D, depending on where you report. Either way, you're an operating expense.
Cost Center vs Profit Center
Most DevRel teams are cost centers - meaning you cost money but don't directly generate revenue. Sales is usually a profit center because they directly bring in revenue (though they also cost money in salaries and commissions).
Being a cost center isn't bad! Most of the company is cost centers. But it does mean that during budget cuts, cost centers are scrutinized more heavily. This is why being able to articulate your value in business terms matters so much.
Budgeting: The Annual Stress Fest
Budgeting is the process of planning how much money each part of the company gets to spend. Most companies do annual budgets, often with quarterly reviews and adjustments.
The Budgeting Cycle usually goes something like this:
- Leadership sets revenue targets and high-level spending parameters
- Each department builds a budget showing what they need to spend to hit their goals
- Finance reviews all the requests (which always add up to more than the company can afford)
- Negotiation happens. Priorities get set. Cuts get made.
- Final budget gets approved
- Everyone complains it's not enough (it never is)
- Throughout the year, actual spending gets tracked against the budget
Top-Down vs Bottom-Up Budgeting:
- Top-down: Leadership says "Sales & Marketing gets $5M" and then that team figures out how to allocate it
- Bottom-up: Each team builds their ideal budget and submits it up the chain
Most companies do some combination. You might be told "DevRel has a budget of $X" or you might be asked "What do you need for next year?"
Building a DevRel Budget
Your budget probably includes:
- Headcount: Salaries and benefits for your team (usually your biggest expense by far)
- Programs: Events, sponsorships, community programs, swag
- Tools: Software subscriptions, community platforms, content creation tools
- Travel: Flights, hotels, meals for conferences and events
- Content Production: Video production, freelance writers, design services
When you build a budget, you need to:
- Tie it to goals: "We need $X to do Y, which will result in Z outcome"
- Show your math: "Three conferences at $10K each = $30K"
- Prioritize: What's must-have vs nice-to-have
- Be realistic: Under-budgeting doesn't help anyone
And here's what nobody tells you: always expect cuts. Budget a little high if you can, knowing you'll probably need to trim. But don't budget ridiculous things you don't actually need, because that damages your credibility.
Managing Your Budget Throughout The Year
Once you have a budget, you need to track it. Finance is definitely tracking it, and you should be too. Know at any given time:
- How much you've spent
- How much you have left
- What big expenses are coming
- Whether you're on track or over/under budget
If you're going to go over budget, flag it early. Finance hates surprises. If you're going to be way under budget, that's also worth flagging - sometimes you can reallocate or carry forward savings.
Essential Finance Terminology
CapEx vs OpEx: This is a big one.
- CapEx (Capital Expenditure): Large purchases that are assets - things like equipment, buildings, major infrastructure. These get depreciated over time.
- OpEx (Operating Expenditure): Day-to-day operating costs like salaries, subscriptions, travel, programs.
Most DevRel spending is OpEx. Why does this matter? Because CapEx and OpEx are treated differently for accounting and tax purposes, and companies often have different budgets for each.
If you want to buy a $50K piece of video production equipment, that's CapEx and comes from a different bucket than your $50K event sponsorship (OpEx). Understanding this helps you navigate budget conversations.
EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. This is a measure of operational profitability. Basically, it's trying to show how much cash the core business operations are generating.
Why should you care? Because companies that aren't profitable yet but are showing strong EBITDA growth are demonstrating they're on a path to profitability. This affects investment decisions and budget allocations.
Burn Rate: How quickly a company is spending money. Especially relevant for startups. If you're spending $1M/month and bringing in $500K/month, your burn rate is $500K/month.
Runway: How long the company can operate at current burn rate before running out of money. If you have $6M in the bank and a burn rate of $500K/month, you have 12 months of runway.
Why this matters to you: when runway gets short, budget cuts happen. Understanding runway gives you early warning signals.
CAC (Customer Acquisition Cost): The total cost to acquire a new customer. Add up all your Sales & Marketing spend and divide by number of new customers.
LTV (Lifetime Value): The total revenue you expect from a customer over their entire relationship with you.
LTV:CAC Ratio: This is super important. If it costs you $10,000 to acquire a customer (CAC) and they generate $30,000 in revenue over their lifetime (LTV), your ratio is 3:1.
Generally, you want this ratio to be 3:1 or better. Lower than 3:1 and you're spending too much on acquisition. Higher than 3:1 and you might not be spending enough (you could grow faster).
Why DevRel should care: If you can show that DevRel activities reduce CAC or increase LTV, you're speaking directly to metrics that executives obsess about.
Gross Margin: Revenue minus COGS, expressed as a percentage. If you have $100 in revenue and $30 in COGS, your gross margin is 70%. SaaS companies typically have gross margins of 70-80%+.
Why this matters: High gross margin means you have more money available for operating expenses (like DevRel). If margins are shrinking, operating budgets get squeezed.
How DevRel Costs Are Viewed
Let's be honest about how finance sees DevRel:
Headcount is usually your biggest cost. For example, if you have a team of 5 people with an average total compensation (salary + benefits) of $150K, that's $750K/year just in people costs.
Programs are visible and often questioned. That $50K conference sponsorship? Finance is asking "What do we get for that?" The more clearly you can connect program spend to outcomes, the easier budget conversations get.
Tools are usually easier to justify, especially if you can show ROI. A $10K/year community platform that supports 10,000 active developers is pretty easy math.
Travel is often the first thing to get cut in tough times. It's visible, feels expensive, and is easy to reduce. This is why many DevRel budgets got decimated during COVID.
Finance asks questions like:
- "What's the return on this investment?"
- "Could we get similar outcomes spending less?"
- "Is this must-have or nice-to-have?"
- "Can we measure the impact?"
The better you can answer these questions, the easier your budget conversations.
The Hard Truth About Budget Cuts
When companies need to reduce costs, they look at what they can cut with the least immediate impact on revenue. Unfortunately, DevRel often falls into this category because:
- The connection to revenue isn't always direct or immediate
- The impact of cutting DevRel isn't felt right away
- It's easy to say "we'll just stop doing conferences for a year"
This is why business literacy matters. If you can articulate DevRel's impact in financial terms - "DevRel activities influenced $2M in pipeline" or "Our community reduces support costs by $X" - you're much better positioned to defend your budget.
Making The Business Case
When you need to advocate for budget, you need to speak finance's language:
Connect to revenue: "This program helps accelerate deals by X days, which means we close Y more deals per quarter"
Show efficiency: "This investment of $X reduces costs in other areas by $Y"
Demonstrate ROI: "Last year we spent $X on this and it resulted in Y measurable outcome worth $Z"
Frame in terms of risk: "Not investing in this creates risk of A, B, C"
Use benchmarks: "Industry standard for companies our size is X, we're at Y"
You don't have to have perfect data for all of this. But you need to be able to tell a credible story using numbers and business logic.
What Finance Wants From You
Honestly? Finance wants you to:
- Stay on budget - Don't surprise them
- Track your spending - Know your numbers
- Justify requests - Explain the why
- Show impact - Connect to business outcomes
- Be realistic - Don't ask for things you can't defend
Finance people aren't the enemy. They're trying to make sure the company doesn't run out of money. Help them understand why DevRel is a good investment, and they'll often advocate for you.
What This Means For Your Work
Understanding finance doesn't mean becoming an accountant. It means:
- You can build and defend a budget
- You can have informed conversations with finance leadership
- You can speak credibly about financial trade-offs
- You can frame DevRel's value in financial terms
- You can see early warning signals when budget cuts might be coming
Look, finance isn't the hippest part of business literacy. But it might be the most important. Because at the end of the day, companies are resource-constrained, and the teams that can effectively advocate for resources in financial terms are the ones that thrive.
Questions about budgets? Confused about the difference between CapEx and OpEx? Want to share your budget horror stories? Comments are open.
Previously: Part 3: Marketing 101
Next up: Product-Led Growth
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