Finance team structure: Best practices for building an effective finance department

• Building the optimal finance team structure is critical to position the function as trusted partner to the CEO and wider business
• Restructuring your team can help them perform transactional tasks more efficiently and dedicate more time to strategy
• It requires creating a step-by-step roadmap, with changes to roles, reporting lines and processes implemented in phases
• Building a strong structure involves assessing team capabilities and processes to spot skill gaps and pain points
• Team structure can be decentralised, centralised or hybrid, depending on company size, maturity, industry or operations.

Finance’s role in driving business performance

Finance is now expected to do far more than crunch the numbers. Its chief value is offering strategic insights to the CEO and board, helping identify growth opportunities and minimise risks.

Its role goes beyond historical financial reporting to offer forward-looking insights – via techniques like forecasting and scenario planning – to test ‘what-if’ scenarios and assess potential financial impact of future decisions. 

Finance also helps the wider business hone in on what drives growth by defining the KPIs they focus on and tracking their results against targets.

Impact of team structure on efficiency and decision-making

The way finance staff are organised into a unit – the reporting lines between them, the tasks they’re accountable for – directly affects speed and quality of decisions. 

Well-defined roles and processes help create better communication pathways within the team and with the wider business. It also helps ensure there’s no duplication of work as there’s clear demarcation between roles.

With clear accountability of roles, team members are more likely to take ownership and pride in their assigned responsibilities and the results they produce.

• Accounts payable The accounts payable (AP) team is focused on money going out of the business, managing supplier invoices, payments and expense processing. Their goal is to ensure vendors are paid accurately and on time.
• Accounts receivable (AR) The AR team oversees money coming into the business, managing customer invoices and collection of payments, to ensure the business maintains healthy liquidity.
• Treasury The treasury team’s purpose is to ensure the business has sufficient cash reserves to meet its obligations. It looks after the business’s liquidity, funding, bank relationships and financial risk.
• Financial planning and analysis (FP&A) FP&A plays a huge role in providing the insights the company’s leadership needs to shape strategic plans. This includes insights into financial performance drivers and possible future scenarios by using cash flow forecasting software and financial analytics platforms.
• Tax and compliance This function helps ensure the company complies with legal and regulatory requirements as well as the Australian Accounting Standards. This includes maintaining a transparent relationship with the Australian Taxation Office and meeting reporting obligations (for instance, lodgment of Business Activity Statements for GST and PAYG withholding). 
• Financial control and reporting This team’s purpose is to ensure the accuracy and consistency of financial statements. They manage the general ledger and financial close, perform reconciliations and use financial reporting software to create the reports needed by those across the business.
• Payroll The payroll team manages the company’s largest expense; employee salaries. They ensure staff get paid correctly and on time while ensuring compliance with tax, superannuation and employment regulations.
• ESG and sustainability In companies with environmental, social and governance (ESG) reporting requirements, this function tracks data for areas like emissions, energy use and supply chain practices.

Centralised vs decentralised finance team structures

In a centralised model, core finance activities are performed by staff in a single location; for example, at the company’s head office. It helps improve consistency, standardisation and control, making it easier to implement common systems and policies.

A decentralised model sees members of finance embedded within different business units or regional divisions. This allows for closer relationships with other units, but comes at the cost of potentially creating inconsistent processes and silos within the finance function.

Shared service centres and global business services

A shared service centre is a company division where high-volume, transactional finance activities (like AP, AR and payroll) are performed. 

Having these activities concentrated in a single team helps improve efficiency and allows for implementation of automation software that would be otherwise too expensive to use across multiple small teams.

Larger companies may use a global business services model where aspects of the finance function are integrated with other functions like HR or IT. This could see high-level analysis being performed in Australia, for instance, while high-level processing is managed by an off-shore team.

Location strategy

This strategy typically uses one of the following models:

• Onshore: High-level strategy and activities are performed by a local team, allowing for real-time collaboration and close relationships with the executive team
• Offshore: Drives cost savings by having transactional activities performed by an overseas team
• Hybrid: This is the most popular model for Australian companies, where finance staff are dispersed across local and overseas teams.

Alignment to business units, regions or processes

The finance function can be organised around a company's different business units or regions to provide specialised support, allowing them to have subject matter expertise of the respective units or regions. For instance, a finance team structure could include analysts dedicated solely to the marketing department or Queensland region.

A team can also be structured around what they do, with focus on a single workflow or process. For instance, there may be a record-to-report team that oversees the general ledger, reconciliations, close and statutory reporting.

Company size and growth stage

The finance function of a small business is typically made up of generalists who look after everything from bookkeeping and budgeting to reporting and compliance. This includes a finance manager or senior accountant as well as a bookkeeper or accounts officer.

Specialisation of roles is needed as a business enters the scale-up stage, where transactions, reporting requirements and compliance obligations increase. This sees the appointment of a financial controller or senior finance manager as well as AR, AP, FP&A and payroll specialists.  

Team structure of a large company is highly specialised with strong separation of duties. It can include a finance director or CFO, financial controller, FP&A director, treasury manager, tax manager, accounting and reporting specialists, and internal audit and risk roles. 

Business model and industry

The types and number of specialised roles within the finance function can depend on the industry. Businesses in highly-regulated sectors like financial services or healthcare will have more personnel dedicated to managing risk and regulatory reporting. 

Meanwhile, a retail business will need a stronger AR and AP function to manage high-volumes of small transactions and inventory reconciliations.

Complexity of operations and data

Multi-national companies and those with multiple legal entities require a more robust and technical finance team structure to handle the complexity of different currencies and tax laws. They also need to manage data quality, consistency and integration across different internal systems.

These companies often have a structure that includes a group consolidation accountant, technical accounting roles, and data governance and finance systems roles.

Automation and outsourcing

The software used by the finance function can influence its structure. For instance, a team that uses a modern ERP or financial management software to automate routine tasks can often operate with a leaner team.

Meanwhile, a team that uses legacy systems will require more staff to do the same amount of work. System limitations can often dictate team structure, with staff needing to perform more time on data entry or other manual tasks.

A team that outsources transactional tasks can see the addition of a finance operations manager or service delivery lead. These roles manage outsourced providers, monitor the service provided and resolve issues.

1. Assess current team capabilities

Conduct an audit of each role in your team to lay down the skills already possessed versus what’s needed to meet future business ambitions. Are there roles where critical knowledge sits, or any that are under pressure? Do you need to hire someone or develop skills to, for instance, utilise data visualisation when reporting results?

Outline the skill gaps across your team and workload distribution across key roles. Map a future state framework to identify where you need to hire new talent or develop existing employees, as well as where you may have redundant skills.

2. Assess existing finance processes and pain points

Examine how work is executed daily by mapping key end-to-end processes such as record-to-report, order-to-cash and procedure-to-pay, instead of examining activities in isolation.

This will help you understand how work flows across teams and systems, and where bottlenecks are. Your mapping should identify where manual interventions occur, how often data is re-entered, where multiple teams are working on the same tasks, and which processes are too reliant on individual knowledge.

3. Evaluate different finance function models

After you get a clear view of your team’s skill gaps and pain points, consider if a decentralised, centralised or hybrid model best suits your company’s strategy. Consider whether your team will benefit from a model that prioritises control and standardisation (centralised) or one that favours agility and local market responsiveness (decentralised).  

4. Define your outsourcing and shared services strategy

Work out which transactional activities could be delivered via an internal shared services centre or outsourced to an external company. High-volume, repeatable tasks like data entry, AP processing and initial bank reconciliations are often suitable for outsourcing.

5. Design the finance team structure

Create a new org chart that outlines the roles, reporting lines and capabilities within the team. It should highlight leadership roles, specialist teams and how the team will interact with the wider business.

Your org chart shouldn’t only outline who reports to whom, but also how data and decisions move through the team. For example, the FP&A manager should have a direct view of data being produced by the controllership, while the chief accountant should have authority to enforce business-wide process changes to ensure data integrity.

6. Clarify roles, responsibilities and spans of control

Write clear role descriptions that outline who is responsible for what, including decision rights, deliverables and performance expectations. Role descriptions help ensure ownership of core processes and prevent duplication of work, while also making it clear where decisions should be made and who’s accountable for outcomes.

Ensure roles that oversee multiple direct reports are manageable. For instance, a financial controller with 10 direct reports may spend much of their time on admin and team management, and less on process improvement and mentorship.

7. Create an implementation roadmap

Create a step-by-step plan that outlines what must change with your finance team structure, when changes will take place and how they’ll be delivered. Your plan should make clear the changes to specific roles, reporting lines, processes, systems and governance.

It’s best to take a phased approach to your restructuring so the team can continue to meet work requirements while changes are introduced progressively. Ensure plans for change are communicated well ahead of time, so stakeholders understand the rationale for them.

8. Apply Plan–Do–Check–Act for continuous improvement

An effective way to prepare for and implement team changes as well as continually evolve your structure is by adhering to a Plan-Do-Check-Act cycle.

• Plan: Define your goals for the restructuring, outlining the new roles, processes, technology and transition timelines needed to achieve them. For instance, a goal could be to reduce month-end close from 10 to five days.
• Do: Implement structural changes, including those to role deliverables, reporting lines and processes, taking a phased approach to ensure business-as-usual commitments are met. Collect data about staff performance following the changes.
• Check: Use data collected in the previous step to track KPIs that measure how effective changes have been. Measure staff efficiency, accuracy, stakeholder satisfaction and compliance.
• Act: Identify bottlenecks via your KPIs and probe into their root cause so you can make targeted adjustments to team structure. Treat your structure as a living system that requires regular checkups and ongoing adjustments to reach peak performance.

Align finance with business strategy

Finance team structure should be organised around the business’s long-term goals rather than traditional finance activities. 

For example, a company focussed on rapid growth needs stronger FP&A capabilities, while one operating in a highly regulated industry requires due diligence, compliance and financial control expertise.

Prioritise FP&A and decision support early

Establishing FP&A capabilities early on sets the foundation for better forecasting and scenario planning down the road. The ability to offer the rest of the business strategic financial insights will help leadership take a forward-looking approach and make the right calls on capital allocation.

Standardise and streamline processes

Consider how modern cloud-based financial management software can free up the team’s time by automating tasks.

The ability of these platforms to integrate with ERP, CRM, payroll and accounting software used business-wide can help ensure processes and data entry is standardised, helping improve accuracy, efficiency as well as offer a single source of truth for financial data.

Define clear ownership and accountability

To prevent tasks from falling through the cracks, ensure every metric and process has an owner who’s accountable for them. Clear ownership makes it easier to enforce stronger controls and identify issues. It also reduces the likelihood of issues being escalated or left unresolved.

Encourage cross-functional collaboration

Your finance team structure should include staff with specific remits to act as business partners, who’ll sit in on sales, marketing, operations or other department meetings. This helps your team better understand the commercial challenges and goals of the wider business and provide specific departments more relevant insights.

Build a culture of partnership with the business

The finance function works most effectively when it proactively engages business-wide stakeholders, to understand operational priorities and anticipate information needs.

Encourage regular interaction with business leaders; for instance, have select finance staff spend time in sales meetings or on site visits to understand operational challenges.

Foster diversity, learning and development

Strive to create a team with diverse skills, experiences and perspectives. This will make the team less likely to fall into group think, so they can better spot risks and uncover improvement opportunities.

Invest in regular training and offer education, training and development opportunities for team members to ensure they’re constantly improving and feel valued.

Empower ownership and decision-making

Clearly outline who is accountable for what, where decision rights lie and expectations so team members can take ownership of their roles without constantly escalating decisions. Avoid micromanaging and focus more on empowering staff so they’ll proactively identify risks, propose process improvements and take pride in results.

Maintain motivation under time and resource pressure

Ensure the efforts of team members are recognised, their workloads are manageable and they have access to support from leaders. This is particularly critical to help them through the pressure of financial close, budgeting and audit cycles.

Improve communication and break down silos

Regular all-hands meetings, shared objectives and clear documentation helps align the team on a common purpose and way of working. If different parts of your team are using separate, unintegrated platforms, consider consolidating everything in a financial management platform. 

Lack of proper systems and tools

Reliance on outdated, unintegrated digital platforms can burden certain roles with manual processes, like manually re-entering data between platforms and having to regularly clean data.

Operating in silos across teams and regions

If different departments or regional offices vary in the way they operate – using different processes, data collection methods and KPI definitions – it makes it difficult to get a full picture of the company’s financial health.

Time and resource constraints

The pressure of transactional tasks often takes time away from performing higher value tasks. If your structure doesn’t factor in the time and resources team members need, they may slip into old ways of working, focusing on past financial performance rather than providing future-looking guidance.

While restructuring your team, it may be an idea to bring in temporary contractors to handle more transactions tasks, while permanent staff focuses on building the new structure.

Complexity and quality of data

Poor quality data located across different systems means team members will spend significant time searching for and cleaning data rather than analysing it. Errors may also creep into financial reporting, which can lead to finance’s loss of credibility.

Balancing transactional work with strategic insight

As mentioned before, transactional tasks can often take time away from strategic ones like forecasting and scenario planning.

It’s important your structure separates transactional and analytical roles so, for instance, the CFO or senior team members don’t get pulled into operational issues. An effective way to manage this balance is to use a shared service centre for transactional tasks.

Financial management systems

Financial management software can act as the digital backbone of the finance function, supporting every role from the staff accountant to the CFO.

It helps the controllership automate procurement and reconciliation workflows. While for the FP&A team, it provides a single source of truth of real-time data for budgeting and forecasting.

AP and AR automation

Technology like optical character recognition can automatically read and code invoices, helping AP save significant time. For AR, software can automatically send reminders to customers and provide a self-service portal to pay invoices.  

FP&A, planning and analytics tools

Financial management systems and business intelligence tools allow the FP&A team to perform forecasting and scenario analysis, with the ability to test ‘what-if’ scenarios. These platforms simplify analysis, providing a more intuitive and streamlined process compared to spreadsheets.

Integrating finance data across the organisation

A cloud-based financial management system can provide the single source of truth the finance function needs by seamlessly integrating with CRM, payroll, accounting and HR platforms used business-wide.

Via this integration, the system can bring in data from across the business to create dashboards for specific departments that visually present financial KPIs and insights most relevant to them.