Finance Staffing Ratio

Finance Staffing Ratio

KPI Details

Finance Staffing Ratio (i.e., total employees per finance employee) measures staffing levels within the Finance Department relative to the total headcount of the organization. Finance Department headcount should be relatively low as compared to other revenue-generating functions or lines of business, particularly in industries such as heavy manufacturing and consumer packaged goods, where day-to-day operations are more focused on producing and managing tangible assets. On the other end of that spectrum, investment banks, large insurance firms and commercial banks typically require more finance employees to support the day-to-day operations of the business (i.e., treasury management, international tax management, regulatory reporting, etc.). In any case, relatively high finance costs may be related to highly manual (i.e., error prone) accounting processes, a large amount of low-value work (e.g., excessive report generation, error correction, etc.), overstaffing and/or general inefficiencies within finance processes (e.g., financial close and reporting, account reconciliations, general ledger management, etc.).

KPI Definition

The number of company-wide employees divided by the total number of Finance Department employees working for the company at the same point in time. Finance employees typically include any staff working under the CFO within functions such as accounts payable, accounts receivable, accounting, financial reporting, treasury, tax, and budgeting/forecasting.

KPI Best Practices

• Accurate work volume forecasting to optimize department staffing levels
• Cross-train employees to handle multiple tasks across Finance function
• Process automation for routine and repetitive work activities

KPI Calculation Instructions Finance Staffing Ratio?

Two values are used to calculate this KPI: (1) the number of companywide employees working for the organization, and (2) the total number of Finance Department employees working for the company at the same point in time. Include only part-time and full-time employees in the numerator and denominator for this calculation. Do not include temporary or contract employees in this calculation. Finance Department employees typically include staff members working in the accounts payable, accounts receivable, accounting, financial reporting, treasury, tax, expense management and budgeting/forecasting functions. In some cases, the payroll and internal audit/compliance functions may also be included within the Finance Department.

KPI Formula :

Total Number of Employees / Number of Finance Department Employees