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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  
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

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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