Finance leaders say increasing manual
processes are impeding economic recovery, but are reluctant to
automate
FOSTER
CITY, Calif., April 24,
2024 /PRNewswire/ -- 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.
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% 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."
To access the report in full, visit here.
Methodology
Tipalti worked in conjunction with Insight Avenue to conduct 600
interviews with Finance and AP leaders in the US, UK, Netherlands and Belgium. Criteria required interviewees were
from high-growth businesses (expecting revenue growth of 20% or
more in next 12 months) with 50 to 1,000 employees. Interviews were
conducted during March 2024.
About Tipalti
Tipalti is a global finance automation company helping finance
teams drive business growth by automating and streamlining accounts
payable, mass payments, procurement and employee expenses in one
connected suite. Tipalti takes the complexity, cost and risk out of
time-consuming financial workflows, making it easy for finance
teams to collaborate with employees and suppliers. Tipalti partners
with blue-chip banks and financial institutions such as Citi, Wells
Fargo, J.P. Morgan and Visa, enabling global companies to
efficiently and securely pay millions of suppliers across 196
countries, 6 payment methods and 120 currencies. Over 4,000
growth-minded companies globally use Tipalti's suite of solutions
to reduce their manual finance workload by 80% and accelerate close
by 25%, all while strengthening financial and spend controls. For
more information, visit tipalti.com.
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SOURCE Tipalti