Forward-looking CFOs have eliminated 40% or more of their team’s time managing manual finance processes. These modern leaders are continuing to weather the uncertain COVID-19 storm by changing the way their organization works.
Recently, a survey of 250 CFOs was conducted by Tipalti and Censuswide regarding the current state of automation in finance departments. The results were compelling:
- Today, 72% of finance organizations spend as much as 520 hours per year on manual accounts payable tasks.
- Amid COVID-19, 75% of CFOs said their finance teams have been able to fully function and complete all processes on time while working remotely, but only after making significant changes.
So what does this mean for future finance trends, and how are CFOs adapting? In the current landscape, corporate finance is expected to do much more than traditional accounting. Finance leaders are leaning into the idea that automation is a critical enabler to survive the transition to our “new normal.” To support their evolving role, CFOs are finding the right solutions to guide their companies through this challenging time.
The Top CFO Concern
For some companies, embracing automation is easier said than done. According to the survey, 95% of CFOs revealed that their finance teams feel anxious about the automation of processes. Also, 57% indicated that their team members were worried that automated solutions could replace their jobs.
This is a concern of many in the business world, not just those in finance.
However, despite this concern, 70% of CFOs realize that there are inherent risks with failing to modernize their finance function—citing the increasing challenge of meeting executive demands without automation.
Hesitation to adapt to this new way of working can severely hinder financial operations. According to the “AI: Built to Scale” study by Accenture, failure to scale AI could put as many as 75% of organizations out of business.
But AI is hardly the enemy. In ZipRecruiter’s Future of Work report, it was revealed that AI has created three times as many jobs as it has destroyed. Plus, the World Economic Forum estimated that AI would create 58 million new jobs between 2018 and 2022.
The main challenge lies with the CFO and adapting the finance team to a more strategic role within the organization.
AI Is the Future of Finance
It’s no secret that automation is dramatically changing how companies do business.
Among the future-focused CFOs who automated some or all of their finance processes, 37% reported a reduction in their compliance risk level, including fraud and audits. Also, 34% experienced better visibility and faster financial reporting, while 29% said automation improved their finance team’s morale. Finally, 17% successfully moved team members into more strategic roles thanks to the elimination of manual, repetitive tasks.
The most compelling trend in finance today is re-focusing resources on high-value work, like forecasting, investment decision making, enhancing financial & cost controls, and supporting globalization and M&A initiatives. By implementing AI and automation to improve time-consuming manual processes, operations become faster and less labor-intensive and allow finance to significantly impact their organizations.
The data doesn’t lie. Sixty-two percent of CFOs indicated they would switch the focus of their current employees that handle manual tasks to higher-value work. Automation is the key enabler of this change and drives the path forward for finance teams to accomplish more.
Adapting to the New Normal
COVID-19 has thrown organizations off their axis and has inadvertently accelerated this transition toward a digital finance future.
According to the survey, less than a quarter of finance teams (14%) were ready to work from home without making significant changes to existing processes. And currently, there is no end in sight. When thinking of the future, 48% of CFOs said that remote work would have the highest impact on their finance teams’ day-to-day responsibilities over the next five years.
The solution is taking a new, holistic approach to modernizing the finance operation—addressing not only short-term requirements but longer-term strategic priorities. COVID-19 has changed the business landscape, and, to succeed, we must change with it.
Building a Sustainable Strategy
Now, processes that waste time and money while hindering resources should be the first to be re-evaluated.
For example, 47% of CFOs revealed that their teams spend 5 to 10 people-hours per week on
AP-related tasks—including invoice processing, supplier inquiries, supplier payments execution, PO matching, new supplier registration, and payment reconciliation. This equated to up to 520 hours each year.
But only 7% of these CFOs automated all of their finance processes, even though streamlining operations reportedly saved companies 1,040 hours per year. It’s clear that although AI and technology is the growing financial trend, there is still a need for broader adoption of automation tools.
This is where CFOs and finance leaders can make the most impact. To effectively modernize operations, finance needs to put scalable solutions in place that increases efficiency end-to-end, accelerates business visibility, enables rapid adaptability to changing business needs, and institutes smart financial and cash controls. To start, look for technology that maximizes payback. Focus on a reliable system that is fast and easy to deploy, has a modern, intuitive interface, and requires minimal change management with minimal upfront costs.
How organizations empower their teams will be the crucial indicator of future success. Now is the time for CFOs to explore the current state of automation within the finance function and take advantage of the opportunity it presents.
Sarah Spoja is the CFO of Tipalti.