New Research Reveals Finance Professionals’ Sentiments Regarding Failure to Automate Core Operational Processes and the Future of Digitization

Despite widespread COVID-era digitization, finance departments continue to rely on paper-based systems to the detriment of their business

–Esker, a global cloud platform and leader in AI-driven process automation solutions for finance and customer service functions,  released a national study, “2021 State of Finance Report: Digital Transformation & Business Disruption.” The survey reveals that most finance and accounting professionals have undergone at least partial digital transformation, however, the industry is still heavily lacking the next step: a comprehensive automation overhaul of business processes.

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“Esker customers typically start to see ROI around 6 months after the solution is deployed”

The survey polled 1,000 respondents, consisting of 109 C-level executives, 92 VPs, 49 directors and 750 practitioner-level finance and accounting professionals, and was conducted from September 20 – 24, 2021.

When COVID-19 forced American businesses to adopt work-from-home policies, companies quickly realized their reliance on paper-based processes could no longer support day-to-day operations. As a result, 83% of companies had to digitize at least some paper-based processes. Nearly 18 months later, the majority of finance professionals (64-69%) still report that lack of process automation negatively impacts their organization. The consequences cited include slow client service/processing times, lack of oversight, employee frustration, and, ultimately, poor retention of department employees.

Digitization was do-or-die for businesses when the pandemic hit. However, failing to automate those digital processes can leave room for human error and could still be a burden for employees. In fact, seventy eight percent of finance professionals believe employees make mistakes when using manual processes, including lost documents (69%), compliance breaches (68%) and reduction in employee productivity (65%). The findings also revealed widespread doubt for a successful future if another drastic situation arose, with 76% of respondents reporting that they are not confident their business has the technology needed to maintain performance standards should something (such as another pandemic) force people to work remotely again.

“We wanted to conduct this survey to shed light on how damaging paper-based systems can be on business efficiency, performance and even staff morale,” said Emmanuel Olivier, Esker Worldwide COO. “This data shows that finance professionals at every level clearly see the glaring problems spurred by lack of digitization in their organizations and want to automate their systems to avoid the potentially devastating effects of errors, but there’s a substantial disconnect between desire and deployment.”

For those who reported having already fully automated their cash conversion cycle, more than 80% said it made their business more efficient/successful. Alternately, 96% of those whose company has not automated their cash conversion cycle believe that automating cash application — a critical part of the cash conversion cycle — would increase their organization’s efficiency and success.

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Despite the majority of respondents who automated part of their cash cycle seeing success, and those who have not acknowledging the benefits of doing so, the survey still shows low rates of automation adoption across all processes, with only 20-23% of respondents reporting that they have automated core systems, including:

• Payment: 20%
• Cash application: 20%
• Accounts payable: 20%
• Order processing systems: 20%
• Deductions: 22%
• Procurement: 22%
• Supplier Management: 22%
• Credit & collections management: 23%

With finance and account professionals understanding the benefits of automation and having uncertainty for the future, it’s surprising that only 17-24% intend to automate business processes in the next two years. For example, 96% of respondents whose company has not automated their cash conversion cycle believe that automating cash application would make their business more efficient and successful. However, only 18% plan to automate their cash application before 2024.

Why are companies and decision-makers still refusing to automate a variety of processes? The answer may be budgetary restraints, as more than half of finance and accounting professionals report that they exceeded their allocated budget for digital transformation. Respondents cited hidden costs, goal post changes during the project and a lack of clear objectives as just some of the factors that derailed their target budgets. Needlessly long timelines may also play a role in pushing automation to the back burner, as nearly 70% report that it took more than two years to see any ROI from their most recent digital transformation initiative.

“Esker customers typically start to see ROI around 6 months after the solution is deployed,” said Steve Smith, Esker U.S. COO. “Businesses turned to Esker during the pandemic with a need for digitization and automation. We’re delighted to quickly transform their cash conversion cycle and ultimately strengthen the company’s bottom line.”