Finance & Accounting Budgets, Staffing, and Process Metrics

How much are organizations budgeting for their finance & accounting (F&A) function, and how many F&A professionals do they require? What is the allocation of F&A resources by job function and subprocess, and what is the split between internal and external personnel (outsourced or in shared services centers)? How is the F&A budget allocated? What are the key performance metrics for the finance & accounting function? To answer these questions, and others, we provide our Finance & Accounting Budgets, Staffing, and Process Metrics study. For a full description, read more below.

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Chapter 1: Executive Summary (Free Download)
Chapter 2: Composite Metrics 
Chapter 3A: Metrics by Organization Size: Small/Midsize 
Chapter 3B: Metrics by Organization Size: Large 
Chapter 4: Banking and Finance 
Chapter 5: Energy and Utilities 
Chapter 6: Healthcare Payors 
Chapter 7: Healthcare Provider
Chapter 8: Life Sciences 
Chapter 9: Discrete Manufacturing 
Chapter 10: Process Manufacturing

INTENDED AUDIENCE

For the Chief Financial Officer (CFO) and F&A professionals, this study provides key metrics and unbiased data for benchmarking your organization’s F&A function budget and staffing levels and along with F&A key performance metrics. This study will allow you to achieve the following outcomes:

• Benchmark your F&A budget levels. Compare them with those of organizations in your industry sector.
• Manage your F&A staffing levels, including internal staffing as well as external staff—those within business process outsourcing (BPO) providers or in shared services units. A variety of staff productivity metrics are provided (see below)
• Evaluate your F&A key performance indicators (KPIs). These allow you to compare the performance of your finance & accounting organization against your industry peers.

For business process outsourcing (BPO) providers, this study provides valuable insights into the current F&A budget and staffing metrics, giving up-to-date insights into the market landscape. It also provides insights into the current use of external F&A personnel for various job positions.

KEY METRICS DESCRIPTIONS

Section 1: Demographics

We first provide a description of the demographics of the survey sample for the chapter. These include organization-size demographics, including organization revenue, SG&A budget levels, F&A budget levels, and number of employees. We continue by describing the total F&A staff member head count.

Section 2: Finance & Accounting Staffing Metrics

This section provides typical staffing levels for the F&A function. This includes internal staff, which consists of contingency workers, and external staff, which includes F&A personnel in global capability centers (GCCs) or shared services centers and outsourcing service provider personnel serving the F&A function or residing in other departments.

• F&A Staff by Personnel Type: Internal, Outsourced, GCC, and Other
• Percentage of Internal F&A Personnel by Subfunction: Accounts Payable, Accounts Receivable, General Accounting, Tax, and Financial Planning & Analysis (FP&A).
• Percentage of Internal F&A Staff That Are Contingent or Temporary Workers.
• Percentage of Outsourced F&A Personnel by Subfunction: Accounts Payable, Accounts Receivable, General Accounting, Tax, and Financial Planning & Analysis (FP&A).
• Percentage of GCC F&A Personnel Performing Various F&A Subfunctions: Accounts Payable, Accounts Receivable, General Accounting, Tax, and Financial Planning & Analysis (FP&A).
• Payroll Administrator Head Count Allocation
• Business Analyst Head Count Allocation
• Data Analyst Head Count Allocation
• Technology Specialists Head Count Allocation
• Operations Excellence and Project Manager Head Count Allocation
• Other Financial Management Staff Head Count Allocation

Section 3: Finance & Accounting Budget Metrics

This section looks at the annual budget for the F&A function. In other words, we examine how much organizations spend to operate their F&A operations. These metrics are essential for evaluating the efficiency and effectiveness of the F&A processes within an organization.

• Percentage of F&A Budget by Category
• Percentage of Total F&A Budget Dedicated to Contingent Workers
• Percentage of Internal Budget by F&A Subfunctions
• Outsourced F&A Budget by Subfunction
• GCC F&A Budget by Subfunction

Section 4: Finance & Accounting Process Performance Metrics

In this section we provide key performance metrics for the F&A function.

• Days Payable Outstanding (DPO)
• Days Sales Outstanding (DSO)
• Percent of Invoices Generated Electronically
• Percent of Invoices Straight-Through Processed (STP)
• Percent of Invoices Paid on Time

Section 5: Finance & Accounting Technology Trends

In this section, we provide an overview of F&A technology implemented to support HR processes of the organization.

• Primary Business Systems for ERP
• Primary Business Systems for FP&A
• Primary Business Systems for Other F&A Tools

APPENDIX

The Appendix includes common terms and definitions used in our annual survey and in this study. It also includes a detailed definition for all budget categories and staffing categories. The Appendix concludes with a brief discussion on the statistics used in this study.

• Common Terms and Definitions
• F&A Budget Categories
• How We Define F&A Job Functions
• Statistical Notes

CHAPTER DESCRIPTIONS

Chapter 1: Executive Summary

This chapter provides an overview of the key findings from the full study and describes the contents of the subsequent chapters. It also includes information on the study participants and the survey methodology.

• Introduction
• Key Findings
• Overview of the Study Contents

Chapter 2: Composite Business Process Metrics

This chapter provides composite metrics for all survey respondents across all sectors and organization sizes. The sample includes 147 organizations and is stratified by size and sector as described in the section on survey methodology. Respondents must have at least $500 million in annual revenue. There is no upper limit on the revenue of survey respondents.

Chapter 3A and 3B: Benchmarks by Organization Size

In these chapters, we provide a complete set of benchmarks for organizations within the specified size classification. Benchmarks for midsize and large organizations are in Chapter 3A and for very large organizations in Chapter 3B. There are 84 respondents in the midsize and large organization sample and 73 in the very large organizations sample. We define the size categories as follows:

• Midsize and large organizations have annual revenue of more than $500 million up to $5 billion.
• Very large organizations have annual revenue of $5 billion and above.

Chapter 4: Banking and Finance Sector Benchmarks

Chapter 4 provides comprehensive benchmarks for F&A staffing and spending within the banking and financial services sector. This sector encompasses a wide array of organizations, including commercial banks, investment banks, credit unions, mortgage lenders, consumer finance lenders, and other financial services providers. The 25 respondents from this sector vary in size, ranging from companies with annual sales of approximately $520 million to those exceeding $37 billion.

Chapter 5: Energy and Utilities Sector Benchmarks

Chapter 5 offers an in-depth analysis of F&A staffing and spending within the energy and utilities sector. This sector is characterized by a diverse range of organizations, including power generation companies, electric and gas utilities, water and sewage companies, and renewable energy providers. The survey sample includes 25 respondents from this sector, with annual revenues as low as $1.1 billion to those exceeding $8.2 billion.

Chapter 6: Healthcare Payor Sector Benchmarks

Chapter 6 provides a detailed analysis of the healthcare payor sector, focusing on benchmarks for F&A staffing and spending. The sector includes a range of organizations, such as health insurance companies, managed care organizations, government programs, and other entities that manage healthcare costs. The chapter examines data from 23 respondents, revealing a substantial variation in company sizes, with annual sales ranging from approximately $600 million to over $65 billion.

Chapter 7: Healthcare Provider Sector Benchmarks

Chapter 7 provides comprehensive benchmarks for F&A staffing and spending within the healthcare provider industry. This sector includes a diverse array of organizations, such as hospitals, healthcare networks, clinics, long-term care facilities, outpatient care centers, and other healthcare service providers. The 24 respondents from this sector vary significantly in size, with annual revenues ranging from approximately $500 million to over $52 billion.

Chapter 8: Life Sciences Sector Benchmarks

Chapter 8 offers a comprehensive examination of the life sciences sector, presenting benchmarks for F&A staffing and spending that reflect the industry’s unique characteristics. The sector includes a diverse array of organizations, such as biotechnology firms, pharmaceutical companies, medical device companies, and research institutions. The 24 survey respondents vary in size, with organizations reporting annual revenues ranging from approximately $600 million to over $65 billion, highlighting the sector’s broad economic impact.

Chapter 9: Discrete Manufacturing Sector Benchmarks

Chapter 9 provides comprehensive benchmarks for F&A staffing and spending within the discrete manufacturing industry. This sector encompasses a wide array of organizations, including automotive manufacturers, aerospace and defense companies, electronics producers, machinery manufacturers, and other producers of distinct products. The 16 respondents from this sector vary in size, ranging from companies with annual sales of approximately $600 million to those exceeding $65 billion.

Chapter 10: Process Manufacturing Sector Benchmarks

Chapter 10 provides comprehensive benchmarks for F&A staffing and spending within the process manufacturing industry. This sector encompasses a wide array of organizations, including chemical producers, food and beverage manufacturers, pharmaceutical companies, and oil and gas refineries. The 10 respondents from this sector vary in size, with annual sales ranging from approximately $1 billion to over $18 billion.

FINANCE & ACCOUNTING BENCHMARKING

Avasant Research not only publishes business process metrics. We also provide custom benchmarking services for clients.

Looking for expert assistance in evaluating your F&A budgets, staffing, and key performance metrics? Our custom benchmarking consulting service provides an in-depth assessment of your F&A key metrics against our database of peer organizations.

Contact us for pricing and a free sample of the benchmarking deliverable.