Report ranks top corporate finance spend relative to revenue across industries

A recent report from Gartner ranked industries by how much they spend on the finance function relative to business revenue and found that the software and internet services industry ranks highest, although accounting firms and other vendors of professional services are not far behind.

Financial expenditures include personnel (internal salaries, benefits, bonuses, training and development, and travel and entertainment expenses), financial technology (software, hardware, personnel and contractors and external services), outsourcing, consultants and professional services in eight processes in finance:

  • Financial and administrative management;
  • Financial Planning and Analysis (FP&A);
  • Accounting and reports;
  • Transactional financing;
  • Tax;
  • Treasury;
  • Investor Relations; and,
  • Internal Audit.

External audit fees, bank charges, insurance premiums, purchases, real estate and company IT expenses were excluded from the financial expenditure data of all participating companies.
Although there is little difference between industries at the lowest levels, there is more visible divergence as companies grow. The report found that the software and internet services sectors are, by far, the biggest financial spenders relative to business revenue; the report notes that they spend twice as much as restaurant businesses with similar revenue figures.

The #2 spot was held by “Professional Services”. A Gartner spokesperson confirmed that accounting firms are included in this category. The biggest companies in this space spend just under $100 million a year on financing.

Matt Williams, director of research at the Gartner Finance Practice, warned in a statement against the temptation to think that the results indicate “good” or “bad” levels of spending, because it all depends on the circumstances of an individual. particular sector.

“Spending more or less doesn’t necessarily imply ‘good’ or ‘bad’ levels,” Williams said. “For example, a low spend relative to peers may be a sign of efficiency, but it may also reflect underinvestment. Similarly, a high spend may show a need to cut costs, but perhaps reflects does it have a finance function that has invested in capabilities to serve as a strategy partner.”

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