The AFP Treasury Benchmarking Programme - 2012 Survey sponsored by PNC, is a serious and useful survey that has been running since 2008. In the introduction to this year's report they claim: "Benchmarking the practices and performance of one organization against those of others can be a powerful tool. Its value lies in learning from the success of others and leveraging that knowledge in order to modify actions or behavior to improve organizational performance. " Yes, but benchmarking can also be used to beat up corporate treasury departments when they don't meet these standards, even when there are real and important reasons why not. Surveys like this need to be treated with care.

Having said that, the survey results are interesting and indicative. The highlights of results from the survey of 751 organisations include:

• the typical organization has 4.35 full-time equivalents (FTEs) in its treasury operation for every $1 billion in annual revenue that the organization generates. The benchmark organization has 1.46 FTEs in its treasury operation. The typical organization with annual revenues between $500 million and $999 million has 5.96 FTEs per $1 billion of annual revenue, while those organizations with annual revenues between $5 billion and $10 billion have 1.29 FTEs per $1 billion of annual revenue. Privately held companies have a significantly greater number of FTEs
• the typical organization uses 0.72 FTEs for every $1 billion in annual revenue to manage in-house bank accounts. The benchmark organization uses 0.17 FTEs to serve the same function.
• the typical organization uses 0.60 FTEs for every $1 billion in annual revenue to manage financial risks while the benchmark organization uses 0.21 FTEs to perform the function.
• the median number of cash receipts processed annually per "manage cash" FTE is 16,667; at the 80th percentile, 333,333 cash receipts are processed per FTE. There is a direct correlation between the size of the organization (as measured by revenue) and the transaction volume processed per FTE. The larger the organization, the higher the number of cash receipts processed per FTE.
• the typical organization takes two days to resolve bank account discrepancies, while the benchmark organization takes one day. While there is some variation in cycle times by organization size, there is no correlation between the two. The only industry segment that takes a greater amount of time to resolve bank account discrepancies is government (3.0 days).
• the median total cost of treasury operations is $0.98 per $1,000 of annual revenue, but drops to $0.24 per $1,000 of annual revenue at the benchmark firm.

The cost and efficiency focus of the primarily US based companies in the survey is shown by the corporate treasury departments's measurement of success: 

Source & Copyright©2012 - AFP

A more appropriate application of the results is to use AFP's Treasury Benchmarking Dasboard which allows companies to select size of firm, industry, etc. The results for a company with annual sales of >$100m are shown below:

Source & Copyright©2012 - AFP

 

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Carefully applied these results can be a useful indicator, particularly if you use the dashboard results. But the results still need to be treated with care.