Financial Accounting Advisory Services
Finance function performance analysis: objective insight on the efficiency and effectiveness of your finance function
Finance leaders must continuously re-examine costs, seek efficiency improvements, deliver reliable business intelligence that enables strategic decision-making, and identify bottom-line growth opportunities.
Today’s dynamic business environment requires companies to regularly review their finance functions to assess that they are “fit for purpose.” The finance function is under more pressure than ever before, driven by the economic downturn, increased demands for regulatory compliance and greater transparency.
Why consider a finance function performance analysis?
If any of the following questions are on your management agenda and the answers are not clear, EY can help: • How confident are you about the efficiency and reliability of your finance function? • Have you recently experienced a major change to the size or shape of your organization (e.g., acquisition or redundancy program), and are you unsure that your finance function is still fit for purpose? • Do you have a general need to reduce costs? • Have you experienced continuous audit process delays and increases in the costs involved?
Example analysis: client revenue per full-time equivalent (FTE) as compared with peers 1.00 0.90 0.80 0.70 0.60 0.50
0.55
0.77
0.20
0.52
0.30
0.87
0.40 0.57
High-level financial analysis
In this initial step, we compare your company’s performance against immediate peers and provide a high-level context for the rest of the performance analysis. We use a mix of revenue, costs, profitability and working capital metrics based on your data as well as competitors’ annual accounts, to provide an overview of financial performance, year-onyear trends and comparisons with your industry peers.
0.55
Step 1
The finance function performance analysis is divided into three sections: a high-level financial analysis to show the overall financial trends against peers, comparisons made against specific finance processes with other similar organizations, and a questionnaire to add qualitative information to the analysis.
Revenue per full-time equivalent ($m)
How does the finance function performance analysis work?
0.10 0.00
Your company Competitor A 2012
2011
Competitor B
2010
Competitor C
Average (2012)
Competitor D
Competitor E
Step 2 Organization analysis
Using comparisons based on similar industry or revenue bands, we offer a detailed analysis of your key finance function metrics, each with a range of responses split into top (TQ), median (Med) and bottom quartiles (BQ). This allows you to compare your organization’s finance function.
Total cost of finance function as a percentage of turnover 0.95% BQ 219%
Med 1.25%
TQ 0.70%
Number of finance function FTEs per $1b revenue 295.9 BQ 315
Med 176.2
TQ 99
Percentage of finance function FTEs to total number of employees within the business entity 0.74% BQ 7.21%
Step 3 Process analysis
Med 3.72%
TQ 2.23%
Through targeted questioning of the finance community, including process owners, we conduct a further qualitative assessment of the core finance processes. Combined with the comparison data, this provides a powerful insight into the detailed workings of your finance function.
Client prioritization matrix compared with peers
High
Time management matrix
Accounts payable and procurement Reporting Opportunity for improvement
Budget Accounts receivable and forecasting General ledger Treasury
Low
Priority
High
EY | Assurance | Tax | Transactions | Advisory
Why use EY for a finance function performance analysis?
EY can help you gain clarity and insight into your firm’s overall finance function structure and performance. CFOs and finance leaders often rely on our analysis to understand their finance function’s strengths and weaknesses, and use our recommendations to improve efficiency and effectiveness of it. Our underlying methodology draws on EY’s Advisory practice and its work with leading businesses worldwide. We have streamlined the three-stage process to reduce the time impact on you and your team, while covering all the relevant areas rapidly.
About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. About EY’s Financial Accounting Advisory Services The changing accounting and reporting landscape provides challenges for multinational companies as they seek to respond to global market conditions and report their financial results while facing increased scrutiny from a range of stakeholders. EY’s accounting, regulatory, compliance and information technology professionals combine technical experience with business and industry insights to help clients navigate complexity. Whether your focus is on managing highly technical accounting requirements or addressing governance and regulatory issues, having the right advisors on your side can make all the difference. Our team uses proven and integrated methodologies to help you resolve your challenging business problems, deliver accurate financial reports in complex market conditions and make sustainable improvements for the longer term. We understand that you need services that are adapted to your specific industry issues, so we bring our broad sector experience and deep subject matter knowledge to your projects in a proactive and objective way. © 2016 EYGM Limited. All Rights Reserved. EYG no. 00827-162GBL BMC Agency GA 0000_05477
Contacts Karsten Füser
[email protected] +49 711 9881 14497
ED None
Gabor Lendvai
[email protected] +44 20 7951 4321
In line with EY’s commitment to minimize its impact on the environment, this document has been printed on paper with a high recycled content. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
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