There are real economic benefits to be had by creating a more efficient finance function

PwC recently published their annual global benchmark report, which focuses on efficient finance functions. Among other findings, the report documents major efficient gaps between leading and average finance functions.

It is precisely this potential efficiency gain that PlanNordic is targeting when we point out the advantages of focusing on optimizing Finance Structures, Processes, Qualifications and Systems.

The reports shows that the total costs associated with the finance function as a percentage of revenue is 40% lower for top quartile companies compared to median performers (0.53% versus 0.89%). One of the explanations for this finding is that the leading finance functions make better use of capacity and focus more on automation, shared service centres and outsourcing.

The budget cycle for top quartile companies is fifteen days shorter than the cycle in average companies (80 versus 95 days). In many cases, the top performers have made significant modifications to their budget process and invested in related technology.

As for the amount of time finance professionals spend on analysis and data gathering, the survey found that top quartile finance functions spend 20% more time on analysis than median performers (60% versus 50%). Data standardization and low-cost innovative data analytics tools enable the leading finance functions to reduce the amount of time spent on data gathering, thus freeing up time for important value-creating analytical tasks.

With regard to invoicing and management reporting, it is estimated that, respectively, 46% and 42% of processing time is either wasted (not value-creating) or spent on manual activities that could be handled more efficiently with automation. Several other processing tasks (e.g. budgeting/forecasting, accounts payable and various accounting tasks) similarly show a substantial efficiency potential of more than 20%.

(Source: http://www.pwc.dk/da/nyt/finance/global-finance-benchmark-report-2015.jhtml).

It is precisely this efficiency gain that PlanNordic targets when we point out the advantages of focusing on optimizing finance structures, processes, qualifications and systems.