What a Finance Function Should Cost: UK Benchmarks by Company Size

“Are we spending too much on finance?” is one of those questions that sounds answerable and turns out not to be, at least not from published sources.

The established benchmarking work on finance function cost — APQC’s cross-industry data and its equivalents — is built on large organisations, expressed as cost per billion of revenue, and mostly sits behind membership. None of it helps a managing director with £8m of turnover trying to work out whether three people in finance is the right number.

So this guide is built from a different source: what we actually see across qualified finance placements in UK businesses between roughly £1m and £50m of revenue. It is observational rather than statistical, and the ranges are wide because the variation is real. It is also, as far as I can find, the only version of this picture written for businesses of this size.

Two ways to answer the question

Finance cost can be read two ways, and they tell you different things.

Cost as a percentage of revenue is the headline number. It is useful for tracking your own trajectory over time and almost useless for comparing yourself to anybody else, because it moves enormously with sector, transaction volume and how much of the function is outsourced. A professional services firm with forty invoices a month and a distributor with four thousand will land in completely different places while both being well run.

The shape of the function — who you employ, at what level, in what order — is the more useful question, and the one most businesses get wrong. Two companies at £10m can spend identical amounts on finance and get entirely different results, because one bought three capable but junior people and the other bought one senior person and two junior ones.

The second is where the money is made or wasted, so that is what this guide concentrates on.

The shape by revenue band

Indicative, for a UK business of ordinary transactional complexity. A high-volume consumer or distribution business sits a band earlier; a low-volume services business a band later.

Revenue	Typical shape	Fully loaded cost	Finance as % of revenue
Up to £1m	Bookkeeper, part-time or outsourced; external accountant for year-end	£15k–£35k	2–3%
£1m–£2m	Full-time bookkeeper or assistant accountant; external accountant; owner still reviewing	£35k–£55k	2–3%
£2m–£5m	Management accountant plus transactional support; often a fractional FC above them	£80k–£130k	2–3%
£5m–£10m	Financial controller, management accountant, one or two transactional	£160k–£240k	1.8–2.5%
£10m–£20m	FC, MA, FP&A or analyst, two to three transactional; FD emerging	£250k–£400k	1.5–2.2%
£20m–£50m	FD or CFO, FC, FP&A, MA, transactional team of three to five	£450k–£750k	1.2–1.8%

Two patterns are worth drawing out of that table. Finance cost as a share of revenue falls as the business grows — the function has a fixed core that gets spread over more turnover — and the absolute spend roughly doubles at each band while the headcount grows more slowly, because the money goes into seniority rather than bodies.

The transition that causes the most difficulty is £5m to £10m, where the business crosses from a function that produces numbers to one that has to own them. That is the point at which the financial controller seat normally opens, and the point at which businesses most often delay.

What each role costs

Base salary ranges across the UK, with London typically 15–20% above. Fully loaded cost — employer’s NI, pension, equipment, software seat, recruitment amortised — runs roughly 20% above base.

Role	UK base range	London	Day rate equivalent
Purchase/sales ledger clerk	£26,000–£34,000	£30,000–£40,000	£130–£190
Assistant accountant	£32,000–£42,000	£38,000–£48,000	£170–£240
Management accountant	£50,000–£70,000	£55,000–£78,000	£250–£380
Financial accountant	£50,000–£70,000	£58,000–£80,000	£260–£400
Finance manager	£55,000–£75,000	£62,000–£85,000	£300–£450
Financial controller	£65,000–£95,000	£75,000–£110,000	£400–£600
Head of finance	£80,000–£110,000	£90,000–£130,000	£500–£700
Finance director	£100,000–£150,000	£120,000–£180,000	£700–£1,000

Regulated businesses add 10–15% at every level. Role-by-role detail sits in the salary guide library, including the financial controller guide and the FP&A manager guide. For broader wage context the ONS earnings and working hours data is the standard external reference.

Where fractional changes the arithmetic

The table above assumes employment, and for the £2m–£20m band that assumption is increasingly wrong.

A business at £6m that needs financial control has historically faced a binary: employ a controller at roughly £95,000 fully loaded, or promote a management accountant who is not ready and hope. The third option — a fractional financial controller at one or two days a week — costs somewhere between £20,000 and £60,000 a year depending on the shape, and buys genuine controller-level ownership rather than a stretched management accountant.

Model	Annual cost	What you get	What you do not
Employed FC	£78k–£114k fully loaded	Full availability, accumulating internal knowledge, deputises for the FD	Affordable only above roughly £5m–£7m
Fractional FC, 1–2 days	£20k–£60k	Senior ownership of the close and the controls, no recruitment risk	Presence; someone to handle the Tuesday problem
Outsourced controller function	£18k–£50k	Process reliability, coverage that does not take holiday	Business-specific judgement; internal knowledge accumulation
Stretched management accountant	£60k–£84k fully loaded	Accurate production, a loyal hire growing into the role	Ownership, for one to two years, during which the gap is yours

The comparison most businesses fail to run is the last row against the second. A management accountant stretched into a controller’s responsibilities costs more than a fractional controller and delivers less control, because what is missing is not hours but experience. The hybrid model — a fractional controller above an in-house management accountant — is frequently the best value available at this size, and it is how a growing share of our clients at £3m–£12m now run finance.

Three ways the money gets wasted

Too senior, too early

A £4m business hires a finance director because the founder wants a sparring partner. The FD arrives, finds no reliable numbers underneath them, and spends the first year building a control layer at director rates. The function improves and the cost per unit of improvement is dreadful. The right first senior hire is usually a level below where ambition points.

Too junior, too long

The opposite and more common error. The business keeps adding capable junior people because each individual hire is cheap and defensible, and ends up at £12m with four people in finance, none of whom owns anything, and a managing director personally reviewing the balance sheet. Total spend is comparable to a properly shaped function. Output is not.

Right people, wrong order

Hiring an FP&A analyst before anyone owns the close. Analysis built on numbers nobody has verified is worse than no analysis, because it is confidently wrong and it gets presented to a board. Control comes before insight, every time — which is also why a management accountant usually precedes an FP&A hire, not the reverse.

The test that beats the benchmark

If you take one thing from this, make it this rather than any number in the tables.

List the five most important things your finance function produces — the monthly pack, the cash forecast, the statutory accounts, the VAT return, whatever they are. Against each, write the name of the person who is accountable when it is wrong. Not who prepares it: who answers for it.

If one name appears against all five and it is the managing director’s, the function is under-resourced regardless of what it costs. If no name appears against some of them, that is a control gap and it will surface at the worst possible moment. If the names are appropriate to the level of the work, the function is probably the right shape and the cost is whatever it is.

That test takes ten minutes and tells you more than a percentage of revenue ever will. Benchmarks describe what other businesses spend. The test describes whether yours works.

What good looks like at each stage

Stage	The function works when
Up to £2m	The bookkeeping is accurate and the year-end is not a scramble
£2m–£5m	A monthly pack arrives on a predictable date and somebody can explain the variances
£5m–£10m	The balance sheet is reconciled, the close lands on a fixed day, and the audit confirms what was already known
£10m–£20m	Finance answers commercial questions within a day, and the forecast is trusted enough to make decisions on
£20m+	Finance initiates the conversation rather than reporting on it, and the board steers by the numbers

Businesses that fail a stage usually do so because they skipped the hire that stage required, not because they underfunded the function overall. The money was spent. It was spent on the wrong level.