Steps to create a leaner, more cost-efficient finance function

Look at organizational scaling

Another area that can drive significant cost savings: optimizing the workforce. This includes rationalizing management layers and reducing corresponding office space. Review which skills and how many employees are critical to achieving business goals. Seek ways a digital and AI-enabled workforce can help reduce redundant work and create new opportunities for your employees. From there, reset performance expectations at both the individual and departmental level. Consider redesigning and streamlining roles and reporting lines based on spans-and-layers analysis. In addition, leverage offshore resources and outsource operational activities where possible.

What’s the potential value?

KPMG LLP research suggests that improving from the bottom quartile to mean of finance operational costs per full-time employee (FTE) can translate into potential savings of around $7 million for a finance function with 100 FTEs.

Look at process and technology efficiency

Want to reduce costs in an expedited manner? Consider building and adhering to global process standards, leveraging AI and automation technology, and applying rigorous performance management. This includes eliminating duplicate processes and policies that are “nice to have” – but not critical for finance operations – and identifying efficiency losses due to process variability.

Use AI-driven insights as the foundation for rapid cost optimization. AI makes it possible for finance teams to triage short- and long-term actions and help identify new opportunities for accounting functions and reports.

What’s the potential value?

According to KPMG research, moving a finance organization from the bottom quartile to the median in terms of operational costs as a percentage of revenue can translate into potential savings of $5 million for a $1 billion revenue company.