Finance Panel
Managing the Finance Team
June 2008
Data analysed by
Aretai
Innovation in Performance
| Page 1
Background
•
In an earlier MPF study it was found that the typical FD of a professional services
Firm spent more time working on issues regarding his team as he did on most
technical and advisory matters
•
The MPF Finance committee decided to examine these matters in more detail by
a follow up study
•
The data in this presentation is drawn from the second study which was
conducted in May and June 208
30
25
20
15
26
10
18
15
13
14
14
5
0
CEO Advice
Change management
Practice Support
Reporting
Team management
Technical
% of time
| Page 2
Executive Summary
Aretai
Innovation in Performance

The typical Finance function team of a Professional Services Firm is
 A team of 48 people
 Supporting a Firm of 139 partners
 With fee income of £191 million and
 an median efficiency rating (Revenue per FTE) of £3m
 The FD spends between 10 and 15 hours a week supervising his team directly
 The FD will typically have between 4 and 5 direct reports
 Tenure of the team is high. Most team members stay with their Firms between 5
and 6 years
 The vast majority of the Finance team is in Accounts Payable
 Training of Finance teams if heavily weighted towards technical training
 20-25% of a typical Finance team consists of qualified professionals
© Aretai Limited - 2007
| Page 3
Demographics of study
Respondents
90
77
80
70
60
%
50
40
30
20
15
10
4
4
0
Global
NA
UK
EME
| Page 4
Demographics of study - Sector
Respondents
70
65
60
50
%
40
30
23
20
10
8
4
0
Accountancy
Law
MC
RE
| Page 5
Demographics of study – Firm size
Respondents
60
50
50
%
40
30
23
23
20
10
4
0
Less 250
250-1000
1000-10000
10000+
Headcount
| Page 6
Team size and efficiency
•
The number of heads in Finance teams amongst respondents ranged from 4 to
300
•
On average just under half the team is engaged in Accounts Payable and
Receivable matters
•
Planning and Statutory reporting roles account for 10-15% of team members
•
Very few permanent heads are employed in Tax or Payroll function, perhaps
reflecting the proliferation of advisors (Tax) and outsourcing (Payroll)
•
More tax heads in a global function (up to 18%)
•
Median revenue per FTE is £3m
•
Range of revenue per FTE is £750,000 to £7.3m
•
On average Real Estate functions tend to be more efficient than Law Firms
•
There appears to be little correlation between efficiency and Firm size
(economies of scale not obvious in the survey)
| Page 7
Revenue per FTE
Revenue per FTE
6
5
Count
4
3
2
1
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
6000
7000
Revenue £000
| Page 8
Revenue per FTE by sector
Revenue per FTE
6
5
4
MC
Acc
3
Law
RE
2
1
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
6000
7000
| Page 9
Revenue per FTE – by Firm size
Revenue per FTE
6
5
4
10k+
1k-10k
3
251-1k
Less 250
2
1
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
6000
7000
| Page 10
Supervision of team
•
The FD spends between 10 and 15 hours a week managing the Finance team
•
Equates to an FD working week of between 56 and 83 hours!!
•
The FD typically has 5 direct reports
•
Over a third of FD’s have more than 5 direct reports
•
Law FD’s tend to have more direct reports than counterparts in other sectors
•
85% of FD’s are happy with the number of direct reports they have
| Page 11
Supervision hours
60
50
40
30
20
10
0
5-10
10-15
15-20
20-25
25-30
30-35
35-40
50-55
Hours supervising team
| Page 12
Direct Reports
40
35
35
30
%
25
19
20
15
15
15
4
5
15
10
5
0
2
3
5+
Direct Reports
| Page 13
Law vs Real Estate – Direct Reports
50
47
45
40
35
33
%
30
Law
25
RE
20
18
17
18
17
17
17
15
12
10
6
5
0
2
3
4
5
5+
Direct Reports
| Page 14
Tenure of team
•
The median average team member has been in the PSF Finance function for
between 5 and 6 years
•
However over 30% have a tenure in excess of 7 years
•
Only 4% tend to stay with their Firm less than 3 years
•
Interesting to compare to FD tenure
•
Legal teams have, on average, a slightly longer tenure than their counterparts
in Accountancy and Real Estate
•
Is there a link to average efficiency here?
•
The overwhelming majority of FD’s are comfortable with this level of
tenure/turnover
•
No one thought it was too high…… a couple of (brave) respondents thought it
was too low
| Page 15
Tenure of FD’s
70
65
60
50
40
PSF
31
Current Role
30
23
21
19
20
15
10
6
6
6
8
0
<1 year
1-3 years
3-5 years
5-10 years
10 years +
| Page 16
Average tenure of team members
Tenure
20
18
16
14
%
12
10
8
6
4
2
0
Less 2
2-3
3-4
4-5
5-6
6-7
7-8
8-9
9-10
10+
Years
| Page 17
Training, qualifications and appraisal
•
20-25% of team members are professionally qualified
•
About the same are studying for professional qualifications
•
No significant difference in approach in this regard between Firm size or sector
•
Vast majority of Firm offer some sort of training to Finance team members
•
About 2/3 of such training is technical in nature with training in ‘behavioural or
people matters’ constituting another 25% of training time
•
Appraisal of staff are universal with the majority favouring annual rather than
six monthly appraisal
•
An appraisal will last between 45-60 minutes for most Firms and 77% of FD’s
think that’s about right
•
Just under a quarter of you consider it too little
| Page 18
Qualified staff
Qualified accountants
25%
% Respondents
20%
15%
10%
5%
0%
Less 5
5-10
10-15
15-20
20-25
25-30
30-35
35-40
45-50
50-55
% in team
| Page 19
Nature of training for team
Training
4
4
27
Technical
Behavioural
Comms
None
65
| Page 20
Team location
•
Just under 60% of the survey respondents had teams organised on a multi site
basis with the remainder having teams in a single location
•
The advantages of a multi site strategy are reported as
– Getting close to customers
– Local knowledge and
– Meeting local demands
•
The advantages of a single site strategy are reported as
–
–
–
–
–
Efficiency
Better communication
One team culture
Segregation of duties
Cost was infrequently mentioned
| Page 21
Team interaction
•
Less than half of the teams surveyed had formal team building days organised
for them
•
Where they are held they are universally seen to be useful
– Builds rapport
– Helps understanding of roles, use Belbin
– Interpersonal issues can be managed
•
Rather more popular were visits to other departments
–
–
–
–
•
Develops cross functional assistance
Helps team to understand the Firm
Improves mutual understanding
Finance brand can be better communicated
Nearly 2/3 of teams complete employee surveys and morale seems good
– Positive and improving
– Like work environment, dislike low recognition for effort
– A ¼ glass half empty, ¾ glass half full
| Page 22
You all understand how important this is
•
Sometimes its like spinning plates, light touch but keeping an eye on them all
•
Achievement is about having good people and giving them scope
•
It’s people, people, people
•
An FD is only as good as the people in their team
•
As an accountant technical knowledge helps, but managing our people is
much more of a challenge
•
Listen, learn adapt – provide support, provide challenge – find and develop the
hidden talent
| Page 23
Finance Panel
Aretai
Innovation in Performance