Costs associated with the finance function are increasing, according to the Benchmarking the Accounting & Finance Function 2016 report from Robert Half and Financial Executives Research Foundation (FERF), the research affiliate of Financial Executives International (FEI).
While many businesses reported the overall cost of compliance requirements remained steady from 2015 to 2016, more than half of U.S. (68 percent) and Canadian (60 percent) companies expect their compliance burden to rise over the next three years.
The information is based on a survey of more than 1,700 financial executives from public and private companies in North America, as well as follow-up interviews.
The research also found employment-related costs spiked sharply for the largest companies ($5 billion or more in revenue) to 5 percent of revenue, compared to 1.1 percent in 2015. According to the study, this may be a reflection of the tight market for talent, which has prompted many companies to spend more money recruiting and hiring accounting and finance professionals.
“The need for resources is a common theme,” said Paul McDonald, senior executive director for Robert Half. “Financial executives are asking themselves ‘How do we do more with the same amount of resources?’ Some firms are addressing the issue by using interim staff for special projects or during peak periods to ensure their finance and accounting functions are running proficiently.”
Additional findings include:
- Sixty-two percent of U.S. respondents said they’re either using cloud-based solutions or plan to in the future, compared to 51 percent last year. Canadian respondents have been slower to embrace cloud-based solutions, with 47 percent saying they use or plan to use cloud-based computing platforms in the future, compared to 46 percent last year.
- The percentage of U.S. companies that use an on-premises enterprise resource planning (ERP) system as their primary financial system dropped considerably to 32 percent in this year’s survey from 53 percent last year. The use of on-premises ERP systems among Canadian firms surveyed also decreased this year to 42 percent, compared to 58 percent in 2015
- More than half of U.S. (52 percent) and Canadian (55 percent) companies rely on manual reconciliation of accounts.
“A prominent difference from last year’s survey is that financial executives seem considerably more comfortable with using cloud-based solutions in their accounting and finance departments,” said Andrej Suskavcevic, president and CEO of FEI and FERF. “In the ever-changing environment, it is essential for companies to benchmark their accounting and finance practices against others to remain competitive. This research can help identify best practices and areas of improvement.”
Robert Half and FEI will host a webinar on June 21 at 11 a.m. PDT/2 p.m. EDT, to discuss the report findings. The presenters include McDonald and Tom Thompson, research manager at FERF, as well as senior financial executives from leading companies. The speakers will discuss key trends and takeaways from the report and how they relate to today’s finance departments.
Register or learn more about the webinar here. The complimentary session qualifies for one unit of continuing professional education (CPE) credit.
About Benchmarking the Accounting & Finance Function 2016
The report provides benchmarking data based on input from more than 1,700 executives from finance and accounting departments at public and private companies in the U.S. and Canada. Executives provided insights on five key operational categories: workforce management, accounting operations, financial systems, sourcing, and internal controls and compliance. Interviews were also conducted with select executives to provide additional context. The information is designed to provide a framework for developing best practices and improving operational efficiencies.
About Financial Executives International
Founded in 1931, Morristown, N.J.-based Financial Executives International (FEI) is the leading advocate for the views of corporate financial management. For more information, visit financialexecutives.org.
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