2014 - May
ISCA and SAP Releases Second Productivity Scorecard and Benchmarking Survey Report for Accountancy Sector
27 May 2014 Category: Media Releases
Singapore, May 27, 2014 – Companies whose finance departments adopted best practices through technology were found to see clear gains in overall productivity. Although finance departments in Singapore companies were found to take longer to close their books, they are nonetheless effective in managing their costs.
These were revealed in the second Productivity Scorecard and Benchmarking Survey Report unveiled by the Institute of Singapore Chartered Accountants (ISCA) and SAP for the accountancy sector. The findings enabled our Singapore companies to benchmark the management of their finance functions against local and global peers. In addition to the industry-wide report, participating companies received an individual report from which they can identify their relative strengths and weaknesses, and areas for improvement. 221 such companies participated in the benchmarking survey. In addition, 78 public accounting firms also took part in the same benchmarking survey, which enabled them to similarly compare against their local and global peers.
Mr Lee Fook Chiew, ISCA’s Chief Executive Officer, said, “With the sector-wide productivity benchmarking survey, we aim to contribute to the national drive to restructure our economy by helping to raise the productivity of Singapore companies, particularly in the area of accounting and finance. The report provides invaluable data for those companies and firms that want to know how they measure up in terms of productivity, relative to their peers, not just locally but globally. It also provides insight into the industry best practices that catalyse productivity gains for the accountancy profession."
The survey was conducted in collaboration with SAP, the market leader in enterprise application software. “At SAP, we have long observed that organizations that adopt best practices through technology gain a leg up on their competition, and the benchmarking survey findings reinforce this. And now, with real-time financial management solutions, Singapore firms can close their books faster while remaining compliant and ultimately, achieve productivity-driven growth,” said Ms Kelly Tan, Managing Director for Singapore at SAP.
Key Survey Findings
Companies which adopted best practices through technology in managing their finance functions saw clear overall productivity gains
Companies which adopted technology best practices in managing finance functions saw overall productivity gains in the form of lower costs, time spent, and higher revenue per employee. For example, companies which had a financial dashboard that provides a timely view of key metrics saw higher revenue of up to 24 per cent per employee. Companies which utilised systems for budgeting and forecasting that provides integrated and real-time information lowered their selling, general and administrative (SGA) expenses by as much as 29 per cent, while those that had a financial system that can support internal and external accounting requirements took 30 per cent less time to close their annual accounts.
Finance departments in Singapore companies take longer to close their books, compared to global peers
Singapore companies take about 1.5 times longer than their global peers, on average, to close their annual and quarterly books. Finance costs of Singapore companies, defined as all finance function related costs such as cost of finance staff, outsourcing, technology spend and all other related finance spending, as a proportion of their revenue, are on par with their global peers.
“Compared to the best in class, Singapore finance departments have lower finance cost as a percentage of revenue. For those companies who are seeking to reduce the number of days to close their books, they can choose to invest in technology, as one of the ways to increase their efficiency,” said Mr Lee.
Singapore public accounting firms on par with global peers in employee turnover, total compensation and time to hire but invest less in employee training
Although total compensation, as a proportion of operating expense, for Singapore public accounting firms is slightly lower than their global peers across the board, this appears not to have affected the employee turnover rate which is lower for the Singapore accounting firms. The better performance of Singapore accounting firms in staff retention and compensation could be attributed to their efforts to address the tight labour market, especially in view of government measures to tighten the supply of foreign workers in the past two years. In particular, employee turnover of Singapore accounting firms, on average, declined from 31.9 per cent to 24.4 per cent over the last two years.
However, the global peers of Singapore accounting firms appear to have invested at least 50 per cent more time in employee training. It is possible that with most Singapore firms experiencing a shortage of manpower, employers may be more reluctant to send staff for training, especially during the peak season. Another possible reason is the lack of a formal training structure for staff in small and medium-sized practices.
Sharing her thoughts on the report is Ms Chew Siow Nee, Chief Financial Officer of the Public Utilities Board. She says, “It is very helpful for me as I have always been asked to benchmark my finance department's productivity to others and this Scorecard and Benchmarking Table is really helpful and useful. Now, I can share with my team how we are doing vis-à-vis a group of surveyed organisations in Singapore as well as the global benchmark.”
Mr Benny Chua, Financial Controller, Utracon Corporation, says, “I found the data presented in the industry report as well as the individual company benchmarking report useful. These reports allowed companies which participated in the survey to compare against their industry peers. As a result, companies are able to identify their strengths and weaknesses, and put forth projects to improve the weaker areas.”
Improvements to the ISCA Productivity Scorecard and Benchmarking Survey Report
Compared to the inaugural scorecard and benchmarking survey last year, the second one this year saw several efforts made to enhance it. To facilitate comparison, this second scorecard and benchmarking survey incorporated productivity indicators adapted from Spring Singapore’s IMPACT assessment tool. Further, to provide greater granularity, the results of the benchmarking survey were further categorized into industry clusters for the companies, and revenue groups for public accounting firms.
The full report can be accessed at: http://download.isca.org.sg/ind/ISCA_Productivity%20Scorecard_Final%20(hardcopy).pdf
About the Institute of Singapore Chartered Accountants
The Institute of Singapore Chartered Accountants (ISCA) is the national accountancy body of Singapore. ISCA’s vision is to be a globally recognised professional accountancy body, bringing value to our members, the profession and wider community.
Established in 1963, ISCA shapes the regional accountancy landscape through advocating the interests of the profession. Possessing a Global Mindset, with Asian Insights, ISCA leverages its regional expertise, knowledge, and networks with diverse stakeholders to contribute towards Singapore’s transformation into a global accountancy hub. Our stakeholders include government and industry bodies, employers, educators, and the public.
ISCA is the Administrator of the Singapore Qualification Programme (Singapore QP) and the Designated Entity to confer the Chartered Accountant of Singapore - CA (Singapore) - designation.
It aims to raise the international profile of the Singapore QP, a post-university professional accountancy qualification programme and promote it as the educational pathway of choice for professional accountants seeking to achieve the CA (Singapore) designation, a prestigious title that is expected to attain global recognition and portability.
There are about 28,000 ISCA members making their stride in businesses across industries in Singapore and around the world.
For more information, please visit www.isca.org.sg.
As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 258,000 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com.
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