How big is your finance department, and how does that compare with other companies? What's an average work week like for the finance staff at a manufacturing company? And is your adoption of financial technology at least on a par with your competitors and peers?
Finance Executives International (FEI), a trade association for CFOs, treasurers and controllers, teamed up with professional staffing firm Robert Half to develop a benchmarking study that would provide metrics companies can use to measure their finance departments against similar organizations. The study looks at nearly 200 public and private companies, with most of the respondents CFOs at manufacturing companies.
"The finance function is undergoing a transformation amid a competitive business landscape and new regulations," says Marie Hollein, president and CEO of FEI. "To operate with precision and achieve optimal productivity, companies need to identify areas of improvement, measure themselves against peers and competitors, and address fluctuating needs and priorities."
The median number of people in internal finance departments at U.S. companies is 11, according to the benchmarking study, although that number varies widely depending on the size of the company. Companies in the $500 million to $5 billion range, for instance, typically have between 44 and 50 people on their staffs. Large companies with $5 billion or more in annual revenue often employ 1,000 or more finance people.
The majority of the people in finance departments are assigned to accounts payable or financial reporting functions (15% of staff allocation for both functions). Budget and analysis and accounts receivable were the next most prevalent functions (11% for both). Roughly 8% of all finance and accounting staffs are temporary or project workers. Generally, the smaller the company, the more likely it will use contract employees.
Finance managers typically work a 48-hour week, while their staffs work an average of 42 hours. The most frequently outsourced functions are payroll (46% of respondents) and tax (30%), with internal controls a distant third at 6%. An emerging trend will be the outsourcing of the accounts payable function, with the goal of focusing resources on more value-added areas, such as forecasting and analysis.
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On the technology front, 80% of respondents overall and 100% of those over $5 billion in revenue have adopted an enterprise resource planning system as their main financial planning solution. The solutions of choice vary according to company size; for small companies, the top choice is Microsoft Dynamics GP; the mid-market is dominated by Oracle/PeopleSoft; and large companies tend to choose SAP.