What is your finance team doing all day? More importantly, what is your finance team doing from start of day Monday until lunch on Wednesday? In a somewhat shocking metric from APQC, finance teams spend 49% of their week managing transaction processing.
“[…] in an average work week, highly paid finance staffs are spending the equivalent of Monday morning through lunchtime on Wednesday making sure that bills get paid, customers get accurate invoices, general accounting work gets done, and fixed assets are accounted for, among many other tasks that keep the money moving through an organization.”
The image below shows just how much time the average organization spends on transaction processing, management activities, financial control, and decision support:
Interfering with Decision Making
Whether large or small, this number remains consistent at 49% across the organizations studied, compared with management activities, decision support, and control.
To simplify, inefficient processes are minimizing visibility and cutting into decision making.
Compare this with CEO and stakeholder needs, and there is a dangerous discrepancy. if you ask chief executive officers and boards what they need most from their finance teams, many will tell you:
- They want fast, reliable, concise information about the economic implications of specific tactical moves.
- When the fiscal year is halfway over and it’s time to boost performance, they want to know the cost-structure impact of choosing strategy A over option B or C.
- They want number crunching to determine potential revenue and operating margin implications of specific decisions about where to invest limited company resources.
They don’t want over two-thirds of the finance department’s time spent on transaction processing and maintaining internal controls.
Finding the Root Causes
According to APQC research fellow and CFO Magazine contributor Mary C. Driscoll, the most obvious issue is the amount of paper your organization uses. Consider that some companies still receive up to 60% of vendor invoices in paper or PDF form. Another issue is communication between the C-suite and the finance department.
Her recommendation? Align, streamline, and automate. Driscoll says, “[…] it’s not enough to invest in new systems; it’s also critical to use them wisely.”
Find Higher Finance Productivity
Take a look at your own organization. Is your finance department spending too much time on paper-based transactions, Excel-based forecasting, and timely manipulation to bring it all together? If your finance department is spending anywhere near 50% of its time on transaction processing, you’re losing money.
From ERP to Invoice Management to EPM, Brittenford has helped finance departments save time and improve decision making abilities since 1997. See how we can help you:
- Reduce invoice processing costs by 70% or more with Concur Invoice and take the time and money saving further with InvoiceConnect for GP or InvoiceConnect for Intacct.
- Gain visibility into decision-making now and in the future with improved planning and forecasting using cloud-based EPM software Host Analytics.
- Bring it all together with best-in-class ERP software Intacct that is ready to connect with the software you already use, breaking down silos and allowing you to make better decisions.
Simply put, by taking the right steps, you can reduce the time spent doing necessary but tedious tasks through smart decisions and wise use of technology. Contact Brittenford to learn more.
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