What follows is a view of performance gaps (cost-efficiency and productivity) that pertain to the financial management process defined as General Accounting. You will immediately see wide disparities. The data comes from a grouping of 217 organizations that have measured their performance relative to peers using APQC’s Open Standards Benchmarking database. oakley aviator sunglasses
The results show that shared services centers significantly outperform the two other service delivery models when doing general accounting and reporting. SSCs proved more cost-effective and efficient, allocating fewer FTEs to the work. (See Figures 1 and 2.)
The data in Figure 2 reflect the average cost incurred by each type of service delivery model within each performance category. The cost calculations cover personnel oakley aviator sunglasses, systems, and other overhead items (direct or allocated).
Productivity and cycle time performance (not charted for this blog post) were also consistently superior and higher in the organizations using a shared services model.
To get a perspective on how the service delivery model impacts process performance, we put the respondents into one of three buckets. General Accounting is performed either: (a) in a shared services center (SSC); (b) at the organization’s headquarters (HQ); or (c) at the business unit (BU) level. We then sliced the data further to show the average cost and full-time employee (FTE) load carried by those found (d) in the best quartile, a.k.a. the top performers; (e) in the median range, a blend of the two quartiles that sit between top and bottom; and (f) in the worst quartile, a.k.a. the bottom performers.
The data in Figure 1 reflect the average number of FTEs in each service delivery model within each performance category.
APQC Figure 2
Figure 1. Number of FTEs to Perform General Accounting per $1 Billion Revenue.
- process and post journal entries coach outlet, which include allocations, period-end adjustments, consolidation eliminations, and management adjustments;
- post and reconcile intercompany transactions;
- reconcile general ledger accounts; and
- prepare the trial balance.
Figure 2. Cost of Performing General Accounting per $1,000 Revenue.
At this time each year, teams of corporate accountants work fervently to close the books on last year’s financial results. APQC’s benchmarking metrics show that some teams struggle mightily under the weight of this challenge, while others seem to move deftly through the steps.
In the area of perform general accounting coach outlet, the APQC survey examines the following processes:
All of the organizations in this benchmarking exercise are quite large, with annual revenues well over $1 billion. Those that perform accounting and reporting tasks at the business unit level generate average annual revenue of $1.6 billion. Those that do the work at headquarters sport average annual revenue of $1.5 billion, while the shared services bunch has average annual revenue of $3.5 billion.
APQC Figure 1
If anything, these performance comparisons should give a jolt to the CFOs and controllers who love to recite the old saw, “If it ain’t broke oakley aviator sunglasses, don’t fix it.” Often, these are the very same people who don’t want to bother with benchmarking their processes. Process improvement? Forget it. I cannot help but notice that the worst performance is delivered by organizations doing accounting and reporting at headquarters. This leaves me wondering how they get the books closed at all — and a bit suspicious about the integrity of the financial results being reported to shareholders.
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