The demands on accounting and finance executives’ time are numerous and conflicting.
On one hand, companies are looking for the finance function to play an increased role in strategic business decisions. On the other hand, new regulations and increased complexity are adding to the basic accounting and compliance duties that demand attention from finance.
Finance executives are using a variety of resources to perform some of the less strategic functions of their jobs, according to a new survey of nearly 200 public and private companies in the United States and Canada.
The 2013 report on an annual benchmarking survey performed by Financial Executives International (FEI) and staffing services firm Robert Half describes the strategies finance departments are using to meet rising demands. These include:
- Outsourcing duties such as payroll and tax.
- Using temporary or project workers during times of high demand.
- Turning to technology to handle enterprise resource planning (ERP) and other duties.
“Financial leaders are taking a fresh look at how their departments can commit assets to achieve the most value for the company,” Paul McDonald, Robert Half senior executive director, said in a news release. “Shared services centres, new technologies and the increased use of interim financial professionals are among the many tactics being employed to allow executives to apply resources where and when they are needed most.”
Payroll and tax are the duties that are most frequently outsourced by the finance function, but accounts payable is emerging as a candidate for additional outsourcing, according to the report.
Fifty-four per cent of companies in Canada and 46% in the US participating in the survey reported outsourcing their payroll. Tax is outsourced by 31% of Canadian respondents and 30% of US respondents, with smaller companies outsourcing tax more frequently than large companies.
But large companies hold the lead in outsourcing accounts payable, as 22% of respondents with annual revenues of $5 billion or more are delegating this function to external providers. That compares with just 7% of companies in Canada and 4% of companies in the US overall.
Numerous executives taking part in the survey said accounts payable consumes significant resources and takes away from activities that generate value. Accounts payable is a labour-intensive process that requires significant manual work, so outsourcing the function could benefit companies, according to the report.
Other findings include:
- Management-level accounting and finance professionals in the US work an average of 48 hours in a standard week, while non-managers work 42 hours. In Canada, managers average 44 hours and staff 39 hours.
- More than 90% of executives expect their compliance burden to either increase or stay the same over time.
- Temporary or project workers make up about 1 in 12 of US finance and accounting staff, and 1 in 20 in Canada.
- Eighty per cent of US respondents and 86% of Canadian respondents are using an ERP system, and the use of on-demand software is increasing.
- Accounting and finance staffs continue to struggle with closing the books. Almost two-thirds of respondents in the US and one-half in Canada manually reconcile accounts without using a tool or system. This is true even though more than half of respondents have in excess of 500 general ledger accounts.
“The finance function is undergoing a transformation amid a competitive business landscape and new regulations,” FEI President and CEO Marie Hollein said in a news release. “To operate with precision and achieve optimal productivity, companies need to identify areas of improvement, measure themselves against peers and competitors, and address fluctuating needs and priorities.”
—Ken Tysiac (firstname.lastname@example.org) is a CGMA Magazine senior editor.