Finance leaders say increasing manual processes are impeding economic recovery, but are reluctant to automate
Tipalti, the leading global finance automation company, today reveals the majority of finance leaders (82%) admit that excessive manual finance processes are hindering their organization’s growth plans for the year ahead—with two-thirds (66%) saying that AP (accounts payable) is the most time-consuming manual process in finance. The study, conducted by Insight Avenue, uncovers the challenges US, UK and European finance leaders are currently facing with inefficient AP processes and highlights how modernized workflows unlock new opportunities for growth.
At a time when businesses are looking at how they can best operate in a challenging macroeconomic environment, visibility over company spend is essential. But, it appears that the finance team is dragging behind. In fact, 79% report feeling like they’re not keeping up with the rest of the business because of AP inefficiencies and continued reliance on manual processes.
Less resources and time, matched with the increasing volume of invoices to process, mean finance inefficiencies have become more evident. Over three-quarters (79%) of finance leaders say that the amount of time they spend on manual data entry has increased by 24% in the last year, now taking an average of 41 minutes to process an individual supplier invoice.
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Manual finance processes are impeding economic recovery
While recovering from continued macroeconomic difficulties is the priority for many leaders and businesses globally, 78% acknowledge that growth in the current economy is only possible if they can maximize cost-saving opportunities across the whole business.
However, inefficiencies within finance departments are impacting the rest of the business, and leaders can no longer ignore or tolerate these AP inefficiencies. Nearly half (44%) say it’s due to financial uncertainty and a need to offset higher costs related to inflation, while 42% state it’s because of the increasing complexity of their business and a further 39% say it’s down to criticism or pressure to transform from other parts of the business.
“Finance leaders know that inefficiencies with manual processes in the business simply won’t cut it when riding out the wave of uncertainty,” said Rob Israch, President at Tipalti. “They do not provide the business with the visibility or control needed to fully steer the direction of the business and thereby, contribute to growth. Despite this, the prevailing lack of insight into automation’s full potential, means finance leaders have only just scratched the surface of what’s possible.
“In this economic climate, businesses need to be examining where they can make efficiency gains and automate the entire end-to-end process of accounts payable. Piecemeal solutions may offer temporary relief, but true transformation lies in embracing automation across the full AP cycle. This will help contribute to their economic bounceback and uncover growth opportunities,” he continued.
Barriers around skills, tools and suitability persist
On average, over half (51%) of AP time is spent on manual tasks, yet, the ambition to reduce this time is small amongst many finance leaders—just 45% aim to reduce this time—although they recognize the benefits of end-to-end automation. Of those that are hesitant, more than one-third (37%) state the required skills and training as the leading barrier to investing in finance automation, followed by finding appropriate tools/vendors (35%) and proper suitability for their business model/complexity concerns (34%).
Beyond impeding organizational growth, the continued reluctance is keeping the finance team from contributing strategic value to their organizations in other ways. With the freed-up time by finance automation, finance teams want to look for growth or efficiency opportunities (39%), be more strategic and proactive with compliance and fraud (38%) and make strategic recommendations to the business based on financial insights (36%).
AP inefficiencies fuel staff discontent, stress and high turnover
On top of this, AP inefficiencies are impacting talent and contributing to difficulties attracting staff, increased staff disgruntlement and churn. More than half (59%) say they have considered leaving their job because of the stress associated with using manual AP processes.
Businesses can’t hide from these issues, especially as they battle against an already shrinking pool of talent. On average, 84%Â think AP inefficiencies and a continued reliance on manual processes are contributing to challenges in attracting finance or AP staff. 83% link this to increased churn of finance staff, 83% reference personal stress and demotivation and 77% point towards disgruntlement or low morale amongst employees.
“To combat what is currently an uninspired and unmotivated finance team, we must take steps to inspire the next generation of talent,” highlights Steve Hunt, Chief People Officer at Tipalti. “This includes creating a more dynamic environment that embraces modernization through technology to make the career path more attractive and enjoyable, whilst encouraging employee retention. The finance office has huge potential to evolve and shape strategic decisions – but only if they’re not bogged down in administrative, low-value tasks.”
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