-
Module 1: Introduction to Finance5 Lessons
-
Module 2: Financial Concepts and Principles5 Lessons
-
Module 3: Financial Planning and Cash Flow Management5 Lessons
-
Module 4: Building Your Financial Model5 Lessons
-
Module 5: The Financial Implications of Business Decisions5 Lessons
-
Module 6: Interpreting Financial Data and Analyzing Performance5 Lessons
-
Module 7: Managing Finance Through Your Business Life Cycle5 Lessons
-
Module 8: The Requirements of a Modern-Day Finance Function5 Lessons
-
Module 9: Positioning Your Finance Team for Growth and Expansion5 Lessons
Determining the ideal structure for your finance function
Dan Wells March 24, 2023
Modern-day finance functions are an essential part of any successful business. They play a critical role in driving growth, innovation, and sustainability through the strategic management of resources, data, and insights. Yet despite their importance, many companies struggle to determine the structure and size of their finance team as they scale up.
Traditionally, finance functions were primarily focused on administrative processes such as processing transactions, bookkeeping, and statutory compliance. Team members would spend the majority of their time behind closed doors crunching numbers. This resulted in a misconception of what finance offers to the wider business and resulting underinvestment towards its people, processes, and systems.
However, in recent decades, finance teams have transitioned from an administrative support center to a value-enhancing function. They are now expected to go beyond their traditional remit to become a true business partner. This involves developing long-term strategies, driving future performance, and acting as a catalyst for change.
The remit of a modern-day finance function requires teams to be highly versatile and possess a diverse range of skills and experiences. As their role has evolved, they have become increasingly involved in non-finance activities such as supporting the wider business, analyzing strategic investments, and delivering the business plan. They also play a lead role in fundraising and M&A activities and must deliver the demands of ESG reporting amid a changing regulatory landscape.
To meet these new challenges, companies need to find the right balance between hiring experienced financial professionals and implementing the latest technology solutions. There are numerous factors that impact how many people should be part of the finance team; from company size and stage to its cost base and growth ambitions. Additional considerations include a company’s group structure, number of legal entities, and level of outsourced activities.
The average cost of a finance function in large enterprises is 1.4% of revenues, with research suggesting that well-run companies can reduce this to around 0.7%. However, the percentage is much higher for early-stage companies which typically need at least 3-4 people to deliver the full requirements of an impactful value-enhancing finance function.
GrowCFO’s report, The Size of a Finance Team, provides valuable insights to help companies make informed decisions about the structure and size of their finance function during the early stages of their business life cycle journey. We hope that our market research, company benchmarking, and detailed analysis will be an inspiring resource for business leaders looking to build the finance teams of the future that deliver sustainable growth and long-term success.
Click here to download the report: The Size of a Finance Team: 2023 GrowCFO Report – GrowCFO
