A recent report from
Finance spending includes personnel (in-house salaries, benefits, bonuses, training and development, and travel and entertainment spending), finance technology (software, hardware, people, and external contractors and services), outsourcing, consultants and professional services across eight processes in finance:
- Finance management and administration;
- Financial planning and analysis (FP&A);
- Accounting and reporting;
- Transactional finance;
- Tax;
- Treasury;
- Investor relations; and,
- Internal audit.
External audit fees, bank fees, insurance premiums, procurement, real estate and corporate IT expenses were excluded from the finance spending data for all participating companies.
While there is little difference between industries at the lowest levels, there is a more visible divergence as companies grow larger. The report found that the software and internet services industries are, by far, the biggest finance spenders relative to company revenue; the report noted they spend twice as much as food service companies with similar revenue figures.
The No. 2 spot was held by "professional services." A spokesperson from Gartner confirmed that accounting firms are included in this category. The biggest firms in this area spend just under $100 million a year on finance.
Matt Williams, director of research in the Gartner Finance Practice, warned in a statement against the temptation to think that the results indicate "good" or "bad" levels of spending, as so much depends on the circumstances of a particular sector.
"Spending more or less does not necessarily imply 'good' or 'bad' levels," said Williams. "For example, a low spend relative to peers may signal efficiency, but it may also reflect underinvestment. Similarly, high spend may show a need to cut costs, but perhaps it reflects a finance function that has invested into capabilities to serve as a strategic business partner."
