Typical companies see 18 percent increase; world-class performers now spend 42 percent less than typical companies
Finance costs at typical companies rose by 18 percent over the past two years, in part due to increased compliance-related costs, according to newly-released 2005 Book of Numbers research from The Hackett Group, a business process advisory firm.
Typical companies now spend 1.26 percent of revenue on the finance function. This is the first time in Hackett's 13-year history of benchmarking that finance costs have risen for typical companies.
The first look at Hackett's 2005 Book of Numbers analysis found that typical companies now spend $940,000 per billion dollars of revenue on compliance management, while world-class companies spend 36 percent less. According to Hackett, world-class chief financial officers (CFOs) rely on standardization and reduced complexity to more effectively manage compliance costs. As a result, leading CFOs have continued to see reductions in the total cost of finance over the past two years.
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