Building an efficient finance team while striking the perfect balance is no easy task—it’s not just about adding headcount as you scale or pushing your existing team to the limit. Instead, it requires a thoughtful approach tailored to your business needs. But how do you determine how many finance employees you need based on your revenue?
What Does Revenue Per Employee Even Mean?
At its core, revenue per employee measures how efficiently your business generates revenue relative to the number of employees you have. In finance specifically, it’s about ensuring your team’s work—whether that’s managing accounts, planning budgets, or analyzing data—contributes meaningfully to the company’s bottom line. While every industry and business model is different, using benchmarks to assess how many finance employees you need is a good starting point.
Research shows that companies should aim for fewer finance employees per billion dollars in revenue. According to data from the American Productivity & Quality Center (APQC), top-performing organizations typically have around 45.5 full-time finance employees (FTEs) per $1 billion in revenue. For median performers, this number rises to about 78.6 FTEs, while companies on the less efficient end require upwards of 102 FTEs for the same revenue figure.
Why such a big range? It comes down to the level of automation, process efficiency, and organizational structure. Companies that strategically streamline their finance function—either by automating repetitive tasks or centralizing their operations—can get by with fewer employees, while those with decentralized setups or outdated systems often require more staff.
Does Your Company Fit the Benchmark?
Before you start counting heads, remember that these benchmarks are a guide, not a rulebook. A small business or a startup will operate differently than a multinational corporation. Here’s what you should consider:
Your Industry - The complexity of financial tasks varies by industry. A tech company may have a leaner finance team compared to a manufacturing company with complex supply chains.
Business Structure - Are your finance employees centralized at your headquarters, or are they spread across multiple locations? Decentralized teams may require more headcount to handle regional nuances.
Level of Automation - If you’ve invested in advanced tools for accounting, payroll, and financial analysis, you’ll likely need fewer employees than a business still relying on manual processes.
Finding the Right Number of Finance Employees
Now comes the question that’s been keeping CFOs and business leaders up at night: how many finance employees should you hire? Let’s break it down:
Start with Revenue Benchmarks
The APQC’s benchmark of 45.5 to 78.6 FTEs per $1 billion in revenue gives you a helpful range to work with. If your company generates $500 million in annual revenue, you might need somewhere between 23 and 39 finance employees, depending on your efficiency and operational structure.
Consider Automation’s Role
Automation is a game-changer for reducing repetitive tasks and freeing up your team to focus on strategic initiatives. If you’re using tools to automate payroll, expense management, and financial reporting, you may not need as many people. But keep in mind, that automation doesn’t replace human judgment. It’s about striking the right balance between efficiency and quality.
Centralized vs. Decentralized Teams
A centralized finance team typically requires fewer employees since they can handle tasks for multiple regions or business units. However, centralization isn’t always practical. For instance, if your business operates in various time zones or has region-specific challenges, a decentralized team might work better—even if it means a higher headcount.
Analyze Specific Finance Functions
Not all finance roles are created equal. Some tasks, like payroll and accounts payable, are more repetitive and can be automated or outsourced. Others, like financial planning and analysis, require strategic thinking and deep expertise. By identifying which roles are essential and which can be optimized, you can refine your staffing levels.
Measure Over Time
Another way to assess your staffing needs is by tracking the ratio of finance employees to overall business employees. This can help you spot inefficiencies or uneven growth patterns. For example, if your company has grown its sales team but hasn’t increased finance staff to handle the additional workload, your finance team might be stretched too thin.
The Pitfalls of Overstaffing and Understaffing
It’s tempting to err on the side of caution and hire more people than you think you need, but overstaffing can lead to inefficiencies and increased costs. On the flip side, understaffing can overwhelm your team, resulting in errors and missed opportunities. Both scenarios hurt your bottom line.
What’s the Ideal Setup?
There’s no one-size-fits-all answer, but here’s a general guideline:
Start Small and Scale - Begin with a lean team, then grow as your revenue and business complexity increase.
Invest in Training - A smaller, well-trained team can often accomplish more than a larger, less skilled one.
Review Regularly - Your staffing needs will change over time, so make this a regular part of your business review process.
Leverage Technology - Automation tools and advanced analytics can help your team work smarter, not harder.
What’s Your Strategy in Building the Right Finance Team?
Determining the optimal number of finance employees is a multifaceted challenge that goes beyond hitting benchmarks. By understanding your industry’s unique needs, leveraging automation, and refining your organizational structure, you can strike the right balance between efficiency and effectiveness. But this isn’t a static equation—your team’s requirements will evolve as your company grows and adapts to new challenges. What strategies or innovations has your business implemented to optimize its finance function? Could the answer lie in rethinking traditional approaches altogether?
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