ERP Best Practice #3 - Where Does Your Finance Department Spend Its Time?
Our finance group periodically compares itself in services and costs to industry benchmarks. According to the American Productivity and Quality Center (APQC) figures published in 2006, the median total cost of finance was a low 0.8 percent of revenues. However, less favorable finance benchmarks were revealed in where finance actually spends its time. For example, finance still spends only 17% of its time supporting business decisions. We found the below time allocation graph particularly interesting.
We also found the below APQC cycle time benchmarks useful to compare to our own internal processes.
| How long does it take? Median cycle times |
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| Completing monthly consolidated financial statements |
5 days |
| Generating complete and correct billing data |
3 days |
| Processing and approving a payment/disbursement |
7 days |
| Payroll processing cycle |
3 days |
| Reconciling a single bank account |
4 hours |
| Initiating, approving and dispatching a wire transfer |
2 hours |
| Annual budgeting cycle |
75 days |
Source: APQC survey of 144 finance executives |
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Lastly, as we're considering outsourcing a few of our more laborious and less important tasks, the below finance department outsourcing utilization statistics reinforced what other companies are doing.
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