The software and internet services sector has the costliest finance function at all levels of company revenue, spending at least twice what companies in the food and beverage sector do at equivalent revenue points, according to Gartner, Inc.
As many finance functions start to think about budgeting for next year and beyond, a Gartner analysis of finance function spend across industries and revenue levels conducted through April 2022 shows some clear differences in the amount of finance spending by different industries and how that spending scales.
“With 80% of finance function costs coming from personnel costs, CFOs are certainly not immune to the effects of inflation,” said Matt Williams, director, research, in the Gartner Finance practice. “CFOs are going to have to scrutinize their decisions on cuts and investments within their own teams as they lead their enterprises to do the same.”
To help CFOs see trends across industries and figure out how they compare with peers, Gartner experts have prepared industry cost curves looking at how finance function spending increases relative to company revenue (see Figure 1).
Gartner experts said the spend in software and internet services for the finance function reflects the higher levels of digitalization in the industry as a whole compared to others. The pharmaceuticals and life sciences sector is noteworthy, because of how much finance cost scales as a business grows. At the smallest end of the revenue scale, pharmaceutical firms are one of the top spenders on corporate finance, but the highest revenue firms in this sector are spending less on finance than most other industry sectors.