You Can’t Audit Your Own Work. So Why Do Some Orgs Make HR and Finance Do Exactly That?

HR should never report into finance, and finance should never report into HR.

Some organizational structures may make sense on paper, but create real problems in practice. Putting Finance under HR is a clear example. Here's why:

Finance needs independence:
Finance must be able to challenge spending, flag financial risks, and report directly to the CEO. It cannot do that if it reports to the same function it’s supposed to be accountable to.

HR and Finance have different jobs:
HR is a people function. Finance is a financial function. Both have different lens, different interests, and often competing priorities. Both are essential. Neither should sit inside the other.

It removes checks and balances:
HR owns compensation, payroll, benefits, and workforce planning. Finance audits those decisions, from a financial view. You cannot audit your own work.

It hurts both teams:
Simplified: HR carries emotion. Finance carries regulation. Stacking them creates burnout, confusion, and credibility issues.

The bottom line is that HR and Finance should be partners, not a parent / child relationship. When you confuse them, you create blind spots. Blind spots are expensive.