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Benchmarking Finance & Accounting: Scale Your Operations


Eric Liebross

Senior Managing Director of Business Transformation, Auxis

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According to benchmarking industry leader The Hackett Group, top benchmarking performers deliver services at 46% lower cost with 52% less FTEs than their lower performing peers. We know that benchmark data can provide insights into your organizational effectiveness, but what kind of conclusions can you really draw from analyzing this information?

Given the post-COVID focus on lean and portable operations, it makes sense to explore which finance benchmarks will give you the strongest insights into the health of your operation, and help you target opportunities to reduce and/or refocus your staff.

In my previous blog, I provided “real-world” examples of how benchmarking data can identify areas of opportunity within your F&A organization, helping to lay out a strategy to increase productivity and automation. In this blog, I will provide more insights into which benchmarks are good indicators of opportunity, and how to “read between the lines” to understand what may be impacting the current performance.

Benchmarking your organization should focus on a number of different performance-based elements which can be summarized under the headings of “Efficiency” and “Effectiveness”. 

Finance Benchmarks: Prophecy or Pretense?

Finance Benchmarks: Prophecy or Pretense? Whitepaper Mockup

Efficiency Metrics

Traditional “Efficiency” metrics focus on the number of FTE’s (“full time equivalents”) performing various tasks, comparing organizations based on their industry and revenue size. Why should industry and revenue size matter? It’s all about volumes and complexity.

It is assumed that higher revenue companies will have a larger number of transactions, necessitating more people to manage them. Additionally, certain industries typically have more complex transaction types, again necessitating more people to perform these tasks. For example, a manufacturing and distribution company selling to “big box” customers will have more operational complexity than a professional services firm selling to the same customers. “Apples to apples” comparisons are important when it comes to benchmarking.

Other Efficiency metrics focus on productivity and performance. For example, in Accounts Payable, the number of invoices processed per FTE is a traditional “Efficiency” metric. Similarly, for General Accounting, the number of Balance Sheet Accounts being managed by an FTE, helps to measure the efficiency of the General Accounting organization. And for Accounts Receivable, the number of receipts processed by an FTE is a good “Efficiency” measure for this function. There are many other examples of Efficiency metrics that can be applied to your organization.

Effectiveness Metrics

Traditional “Effectiveness” metrics focus on the operating cost for the various functions, such as the Personnel Cost to perform the activities within a function, and the Total Cost to perform these activities. Personnel Cost is based on the full