Digital transformation is completely changing how many accounting and finance functions, and the businesses they support, operate.
This is according to the latest (2018) Benchmarking Accounting and Finance Functions report by international recruitment agency Robert Half.
The report, based on survey responses from more than 1,700 financial leaders at public and private organizations in the United States and Canada, leads with an overview of technology trends impacting accounting and finance functions. It takes a look at how automation and digital transformation are driving the need for new skills in accounting and finance organizations today and will likely influence team structures in the future.
It also looks at how companies and their financial leaders are managing everyday operations. Topics covered include outsourcing and the use of interim and project-based professionals. The burden of compliance requirements and costs on financial leaders and their teams is also examined and the report highlights comparisons between new data and previous years’ findings and identify notable trends and differences.
Some of the research highlights are:
• Accounting and finance organizations are automating processes primarily for these functions: invoicing, data collection, report generation, document storage and compliance. Many firms also expect to automate processes such as financial planning and forecasting — for example, predictive reporting — over the next three years or at some other point in the future.
• Adoption of cloud-based solutions among accounting and finance leaders in North America continues to rise. Three-quarters (75 percent) of U.S. respondents said they are either using cloud-based solutions or plan to do so in the future, compared to 72 percent in our 2017 survey and 62 percent in 2016. Seventy-three percent of Canadian financial executives said they are using or plan to use cloud-based solutions — up six points from last year’s survey and 26 points from our 2016 survey.
• Seventeen percent of organizations in the United States and 22 percent in Canada said they plan to expand their accounting and finance teams due to digital transformation initiatives. About half of the financial executives in North America surveyed said they expect to maintain their current staffing levels.
• Accounting and finance managers in the United States work an average of 46 hours per week, down from 47 hours in the previous survey. Canadian accounting and finance managers are devoting 43 hours per week to their jobs, on average, down from 45 hours last year.
• More than half the firms in the United States and Canada surveyed rely on manual processes for accounts reconciliation, but those percentages are decreasing. For example, a growing number of firms in North America report they are using internally developed tools or systems.
• The finance function is primarily responsible for overall effectiveness of internal control over financial reporting (ICFR) in most U.S. and Canadian organizations.
• Only about one-third of financial executives in both the United States and Canada say they expect to see their compliance costs rise this year; many expect costs to remain steady. However, most organizations in North America anticipate their compliance burden will increase over the next three years.
The report concludes that:
• The burden of compliance is forcing many organizations to take a hard look at their processes and identify ways to work faster and smarter.
• As predicted in our previous benchmarking report, technology tools are becoming only more essential to most accounting and finance teams as they work to keep pace with the
increasing number and complexity of compliance requirements. For other firms, especially those still heavily reliant on manual processes, repositioning teams and adjusting responsibilities is the immediate answer.
• Several financial executives we interviewed lamented the resource-intensiveness of maintaining compliance and internal controls because it prevents them from devoting attention to other activities that can add value to the business and help it to grow.
Download the full report here.