Search
 

The Right Way to Chop

Process standardization, simplification, and automation have brought finance costs to a record low level as a percentage of corporate revenue.

By Treasury & Risk Staff | Updated on December 18, 2014
How much does it cost to run the finance function? How much should it cost? And what best practices can companies implement to bring those costs down without reducing the quality of financial oversight and business support?

Answering these questions is one goal of the extensive benchmarking research compiled annually by The Hackett Group. According to the firm’s benchmark reports, the cost of finance has been falling steadily for years. Even so, this year’s result is notable: For the first time, the finance function in the median company cost less than 1 percent of corporate revenue. That’s a 34 percent reduction from two decades ago. (See Figure 1, below.)

Technology has obviously played a key role in improving efficiency, but it hasn’t been the only weapon in the finance arsenal. Treasury & Risk sat down with Hackett senior research director Lynne Schneider to uncover causes of the trend.

 

Recommended Stories

Verizon Likes Investor Scrutiny of ESG Bonds

Verizon Likes Investor Scrutiny of ESG Bonds

Caleb Mutua |

The company has issued five green bonds, including a $1 billion offering earlier this month. “Added scrutiny ... enables our platform to continue to shine compared to the rest of the market.”

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2023 ALM Global, LLC. All Rights Reserved.