Less than half (46%) of financial executives say they are able to fully execute their responsibilities with “manual, time-consuming processes” listed by 49% of respondents as the primary obstacle
RALEIGH, N.C. – May 11, 2021 – In the early days of the pandemic, cash flow management took center stage for many businesses and risk management continues to be a priority this year as business leaders depend more than ever on finance teams for decision-making support. However, a new study from insightsoftware and Hanover Research shows that finance teams are being slowed down by manual, time-consuming processes and limited access to data even as a majority (52%) of finance team members spend 25% of each week producing financial statements.
The 2021 Finance Team Trends Report includes data from 497 respondents in corporate finance and accounting departments with more than half (55%) either a Director, Vice President or CFO. The respondents were evenly split between North America and EMEA with 48% representing companies with 500-5,000 employees across a range of industries, including financial services, healthcare, IT, professional services, government and telecommunications, among others.
“The Office of the CFO is in the midst of major evolution from an organization’s financial custodian to a strategic business advisor tasked with not only keeping an accurate record of the past, but also providing a realistic vision for the future,” said Bryan Motteram, Director of Product Marketing at insightsoftware. “However, as finance teams look to accelerate growth out of the pandemic, the survey data exposes a growing challenge for finance teams: lack of time to spend on analysis. Finance teams are not able to analyze data and derive actionable insights because that time is consumed by manual processing of financial reports – something 49% of respondents noted, by the far the largest challenge to their daily productivity.”
Finance Team’s Role & Challenges
By a significant margin, respondents identified financial planning and analysis (66%) as the finance team’s main responsibility, followed by its key elements of financial modeling (56%) and budget and forecasting (48%). Surprisingly, despite the stated focus on finance teams providing strategic insights, respondents ranked long-term business strategy (30%), strategic decision-making (29%) and short-term business strategy (25%) as the lowest priority responsibilities. In terms of other key points revealed:
- Lack of time to spend on analysis (31%), adoption of new technology (28%) and data limitations or inaccuracies (26%) were listed as the top challenges facing finance teams.
- Digging into why they can’t execute on key responsibilities, respondents listed manual, time-consuming processes (49%), lack of resources (29%), lack of skills on the team (28%) and inability to readily access required data (21%).
Looking ahead, finance teams were asked about their future plans and top priorities over the next two years:
- Balancing growth with profit effectively; enable the organization to make more flexible and timely decisions; and increasing working capital (all tied at 31%).
- Hiring and staffing (29%).
- New budgeting and planning software (28%).
In addition, more than 50% of respondents expect finance team staffing levels to rise over the next two years based on an increase in budget.
COVID-19 Response & Economic Recovery Indicators
After a year of unprecedented economic uncertainty caused by the global pandemic and resulting dynamic market conditions, respondents detailed the steps they took and continue to pursue to steer through the turbulence, including: adopted new technology (32%), reduced hiring (32%), reduced temporary staff (24%), accepted smaller margins (24%) and absorbed price increases (22%).
In terms of the key metrics finance teams are monitoring to signal a broader financial recovery, respondents named sales and revenue (35%), operating cash flow (29%) and net profit margin (27%) as the top three.
insightsoftware is a leading provider of financial reporting and enterprise performance management software. We enable the Office of the CFO to connect to and make sense of their enterprise data in real time so they can proactively drive greater financial intelligence across their organization, which is how best-in-class finance teams operate. Over 25,000 organizations worldwide rely on insightsoftware’s portfolio of best-in-class reporting, analytics, budgeting, forecasting, consolidation, and tax solutions to provide them with increased productivity, visibility, accuracy, and compliance. Visit insightsoftware.com for more information.