World Class Finance Departments Do More with Less

Finance departments have seen their workloads increase over the past couple of years due to a large extent by changing regulatory environments and the advent of Sarbanes Oxley, IFRS and Basel II.

In many cases, this has meant that CFOs, who are well used to teaching the rest of the company on how to cut costs, have had to turn the spotlight on their own department. Research by The Hackett Group suggests that CFOs who are focussed on cutting costs in their own department are more likely to end up with a World-Class Finance operation, which is to say a company in the top quartile of those benchmarked.

According to The Hackett Group, World-class finance functions spend 31%less than their peers on Finance. They also operate with nearly half the staff and complete the financial reporting cycle faster each month.

The graph below shows the comparison between World-class and Peer-group companies based on the average number of finance staff per billion $ of revenue:

Not only is the trend down for all companies, but the focus on automation through technology and process improvements is evident as a critical distinguishing factor in World-class companies. While in the past it was acceptable to have people manually processing Accounts Payable checks, or manually processing customer receipt data, or indeed manually performing reconciliations through excel or other home-baked tools, the smart companies know that Less is More and that technology is there to be leveraged intelligently.

At Cashbook we have one goal that cuts through all of our projects: wherever there is unintelligent manual labor taking place in your finance department, we will cut it out and free up your people to perform higher value-added activities. Combined with improved cash visibility and consolidated finance processes across multiple accounts, sites and system environments, we believe there is no reason why Peer-group finance companies should not be given the tools to become World-class.
(Sources: The Hackett Group and CFO Europe)