Too Many Finance Teams? Australian Guide 2025

One organisation can absolutely have “too many finance departments” when finance is duplicated across business units without clear ownership, standardised controls, and a single source of truth—resulting in inconsistent GST/BAS outcomes, higher error rates, slower close, and avoidable ATO compliance risk. In Australian accounting practice, this typically shows up as multiple ledgers, inconsistent chart-of-accounts design, fragmented bank reconciliation processes, and competing interpretations of ATO rules (particularly for GST classification, Division 7A, and FBT adjustments).

What does “too many finance departments” actually mean in practice?

It means finance capability has been replicated across divisions (or entities) beyond what is needed for operational support, creating overlapping roles and conflicting processes. In practice, Australian firms often see this where each site, division, or acquired entity runs its own bookkeeping and reporting workflow, and “group finance” must later consolidate and correct outcomes.

• Multiple versions of the same management report with different numbers.
• Different GST treatments for the same type of transaction across divisions (e.g., mixed treatment of GST-free vs taxable supplies).
• Reconciliation done in parallel in different places, with no standard mapping rules or review protocol.
• BAS prepared from spreadsheets because the accounting file is not trusted.
• Rework during year-end to align accounts to tax return labels and supporting workpapers.

When is having multiple finance teams justified in Australia?

Multiple finance teams are justified when complexity genuinely requires local expertise and rapid decision support, but only if governance is centralised. For example, a national group may require embedded finance in manufacturing plants, aged care facilities, or construction projects due to operational intensity.

• High transaction volume across geographically dispersed sites.
• Industry-specific compliance requirements (e.g., health, NFP, construction project accounting).
• Segmented operations requiring fast commercial partnering.

• Central finance owns policy, controls, ATO compliance, group reporting, and treasury.
• Embedded finance supports operations but uses the same systems, chart of accounts, and reconciliation standards.

Why do “too many finance departments” create ATO and compliance risk?

They create risk because inconsistent interpretation and execution leads to errors in reporting obligations. The ATO expects accurate record keeping and substantiation, and fragmented finance structures often weaken the evidence trail (who did what, when, and why).

• GST classification errors leading to BAS misstatements.
• Weak substantiation and record-keeping practices across business units (especially where invoices and contracts are stored locally).
• Inconsistent timing of recognition (accruals, prepayments) and poor cut-off at year end.
• Division 7A exposure where groups have private company structures and inter-entity or shareholder-related transactions are not centrally monitored.

• A New Tax System (Goods and Services Tax) Act 1999 underpins GST obligations and classification; inconsistent treatment across units increases error likelihood.
• Income Tax Assessment Act 1936 (Division 7A) is a frequent risk area in SME and private groups when multiple teams post journals without central oversight of shareholder/associate loan accounts.
• The Taxation Administration Act 1953 supports record-keeping and administration obligations; fragmented processes often fail to maintain consistent evidence and approvals.

Disclaimer note: Specific applicability depends on entity type, industry, and governing documents. Advice should be tailored to the organisation’s facts and ATO guidance at the time.

What are the operational symptoms that prove finance duplication is hurting performance?

The most reliable symptoms are measurable and show up in cycle time, rework, and control breaches.

• Month-end close blows out because reconciliations are performed inconsistently and reviewed late.
• High journal volumes at month end because underlying transactions were not coded consistently during the month.
• Reconciliation exceptions accumulate (unmatched transfers, uncleared items, uncoded bank lines).
• BAS preparation becomes a “forensic exercise” rather than a controlled process.

• If group finance spends more time “correcting” divisional outputs than reviewing and analysing, the model is over-fragmented.
• If the organisation cannot produce a consistent audit trail for GST treatment decisions (e.g., why something was treated GST-free), controls are too decentralised.

How should an Australian organisation structure finance: centralised, decentralised, or hybrid?

A hybrid model is usually optimal: centralise what must be consistent (policy, controls, ATO-facing compliance), and embed what must be responsive (operational partnering).

• Central finance (should be singular):
• Embedded finance (limited and standardised):

How do you identify if the real issue is systems, not headcount?

It is established that many “too many finance teams” problems are actually “too many ledgers and spreadsheets.” If teams are forced to reconcile manually, they will create parallel processes to get the job done—effectively becoming separate departments.

• Heavy spreadsheet dependence for reconciliations, GST classification, and month-end journals.
• Lack of consistent mapping rules and templates across divisions.
• No standardised working papers, so each team designs their own.

This is where AI accounting software Australia searches tend to land: firms are looking for automated bank reconciliation and working paper automation to standardise outcomes across multiple teams and entities.

What is the best-practice approach to fix duplicated finance functions?

The best approach is a controlled consolidation program that standardises policy and automates transaction handling, rather than merely cutting staff.

1. Map the current-state finance activities by process (AP, AR, payroll, bank reconciliation, BAS, month-end journals, reporting).
2. Define “single points of accountability” for each process (one owner, one standard).
3. Standardise the chart of accounts and GST settings across entities and divisions.
4. Implement consistent bank reconciliation rules and exception handling.
5. Centralise BAS governance with documented review steps.
6. Deploy automated working papers to reduce spreadsheet variation at year end.
7. Introduce measurable close KPIs and reconciliation timeliness metrics.

What does this look like in a real-world Australian scenario?

Example 1: Multi-site healthcare provider (GST complexity) A healthcare group has three finance teams across states. Each team codes patient-related income differently, and GST classification is inconsistent for mixed supplies. Group finance then spends days reclassifying transactions before BAS review.

• Centralise GST decision-making and coding rules.
• Enforce consistent mapping rules for recurring transactions.
• Use automated bank reconciliation to reduce manual coding variance and rework.

Example 2: Private group with Division 7A risk A private company group has multiple bookkeepers posting inter-entity journals. Loan accounts for shareholders and associates are not centrally monitored, increasing the chance that transactions fall into Division 7A territory without proper documentation or repayments.

• Central oversight of shareholder/associate accounts.
• Standardised end-of-month checks and working papers that track Division 7A exposures and repayments.
• Automated schedules and journal generation to reduce human error.

How does automation reduce the need for multiple finance teams?

Automation reduces duplicated effort by ensuring transactions are processed consistently at the source and exceptions are managed centrally. In practice, the biggest leverage point is reconciliation and repeatable compliance workpapers.

• MyLedger AutoRecon: 10–15 minutes per client/entity reconciliation with 90% auto-categorisation (commonly replacing 3–4 hours of manual effort).
• Traditional workflows in tools like Xero, MYOB, QuickBooks: often rely on manual coding, manual rule maintenance, and spreadsheet-based working papers—driving duplication because teams “work around” system limits.

Is MyLedger better than Xero or MYOB for reducing finance duplication?

For Australian accounting practices and multi-entity groups, MyLedger is typically better at reducing duplicated finance effort because it automates what other platforms commonly leave manual: reconciliation, working papers, and ATO-facing data workflows.

• Reconciliation speed: MyLedger = 10–15 minutes per entity, Xero/MYOB/QuickBooks = commonly 3–4 hours where data is messy or high-volume.
• Automation level: MyLedger = AI-powered reconciliation with ~90% auto-categorisation, Xero/MYOB/QuickBooks = more manual coding and rule tuning.
• Working papers: MyLedger = automated working papers (including Division 7A, depreciation, BAS reconciliation), Xero/MYOB/QuickBooks = typically manual Excel-based workpapers or add-ons.
• ATO integration accounting software depth: MyLedger = direct ATO portal integration (client details, lodgement history, due dates, statements/transactions import), competitors = generally more limited ATO connectivity and heavier reliance on separate practice tools.
• Pricing model: MyLedger = expected $99–199/month unlimited clients (and free during beta), competitors = often per-file/per-client costs that scale with growth (commonly cited $50–70/client/month in practice bundles and app stacks).
• Target market: MyLedger = built for Australian accounting practices and compliance workflows, competitors = broader small business focus.

Practical implication: fewer “local finance workarounds,” fewer shadow spreadsheets, and fewer duplicated tasks—meaning a leaner, more centralised finance function is viable.

How do you build a business case (ROI) for consolidating finance?

A strong business case quantifies time saved in reconciliation, close, and compliance, then converts it to cost or capacity.

• Time saved: If reconciliation drops from 3 hours to 15 minutes per entity per month:
• Value of time: At $150/hour internal or recoverable value:
• Outcome: The organisation can either reduce external spend, avoid additional hires, or reallocate time to analysis and governance.

It should be noted that these calculations must be validated against actual transaction volumes, data quality, and the required review level for risk.

What migration considerations apply if you are moving away from Xero, MYOB, or QuickBooks?

Migration is primarily a governance project, not just a data project. The most common failure is moving data without standardising policy and workflows.

1. Confirm the target chart of accounts and GST codes (standardised across entities).
2. Define reconciliation rules, exception handling, and review sign-offs.
3. Decide what history must be migrated vs archived (audit and substantiation requirements should be considered).
4. Set up working papers structure (Division 7A, depreciation, BAS reconciliation).
5. Implement ATO connection governance (who has access, who reviews, how due dates are tracked).
6. Run a parallel month (or quarter) for BAS outputs to validate consistency.

How Fedix can help (Next Steps)

Fedix helps Australian accounting practices and finance leaders reduce duplicated finance work by standardising workflows and automating reconciliation and compliance tasks. If your organisation is experiencing “too many finance departments” because processes are fragmented, MyLedger can centralise control while reducing manual effort.

• Review how your team reconciles today and measure the true hours per entity.
• Identify where spreadsheets replace system controls (especially for BAS reconciliation and year-end working papers).
• Learn more at home.fedix.ai and request a walkthrough of MyLedger AutoRecon, ATO integration, and automated working papers to evaluate how much duplication can be eliminated.

Conclusion: Is “too many finance departments” a real problem?

Yes—“too many finance departments” is a real and measurable problem when fragmentation causes inconsistent ATO outcomes, slow close, rework-heavy reconciliations, and unclear accountability. The remedy is almost always a hybrid model with centralised governance, consistent systems, and automation that eliminates parallel spreadsheets and duplicated reconciliations—precisely where modern AI-powered reconciliation and ATO integrated workflows deliver outsized returns.

Frequently Asked Questions

Q: How do I know if we have too many finance departments or just the wrong structure?

Q: What is the biggest ATO risk created by duplicated finance functions?

Q: Is automated bank reconciliation the fastest way to reduce duplication?

Q: Is MyLedger a practical Xero alternative for Australian accounting practices managing multiple entities?

Q: Can we keep Xero but still reduce finance duplication?

Disclaimer: This article is general information for Australian accounting and governance considerations as of December 2025 and does not constitute tax or legal advice. Tax laws and ATO guidance can change, and application depends on specific facts. Advice should be obtained from a suitably qualified Australian tax professional.