CFO Survey: Too Much Manual Work, Inefficient Processes, and How to Fix it
CFOs have it rough. Stressed out, too much manual work, and not enough family time is just the beginning of the findings from a recent CFO survey. While stress and hard work is nothing new for C-suite positions, the highlights pertaining specifically to CFOs shed light on the specific difficulties they face, and offer solutions that can greatly improve these issues.
Where does the problem come from?
The survey showed that a whopping 81% of CFOs believe they suffer from the most intensive daily manual work in comparison to any other role in the C-suite. This could very well be the cause for other feelings that follow as a result such as reduced family time, not enough time for strategic decision making, and overall dissatisfaction with output.
The survey was conducted by DataRails, a leading FP&A automation software that helps reduce the issues highlighted in the report. 200 CFOs of US and UK businesses with less than 500 employees were surveyed, and the report titled “CFO: No way home” gives a very good outlook of the state of CFOs at these sized companies.
Far too much manual work
While the vast majority of CFOs (81%) believe that they conduct the most manual work out of anyone in the C-suite, it doesn’t stop with the CFO. The survey finds that 41% of all FP&A processes are done manually, which translates into 10 hours a week that is spent on spreadsheet work done by highly skilled finance experts.
Much of this manual work ends up in the CFO’s hands, especially among small and medium sized businesses. These FP&A manual processes can mean all sorts of things. Budgeting, forecasting, P&Ls, month end reporting, and balance sheets are just a few of the time consuming manual processes that are done constantly. But for CFOs, the manual tasks are even more repetitive, as 41% of CFOs say the regular identification and correction of errors is their biggest manual and repetitive challenge.
The manual work effect
Other than the time consuming and inefficient problem of manual work that can easily waste 10 hours a week for finance teams, relying too much on manual work has other effects for the CFO.
Almost half of the CFOs surveyed say these manual processes reduce time spent at home with family and friends (48%) while from the business side, 47% believe this work reduces their ability to participate in strategic decision making.
For CFOs and finance teams, Excel is a huge part of every day work, and manual entries in particular. The study echoes this, as 70% of CFOs rely on Excel for financial budgeting and forecasting. However, only a tiny 18% of all CFOs consider themselves Excel experts, and only 30% call themselves advanced. There is no doubt that the high usage of Excel without being as fluent as they should be is contributing to inefficiencies in finance teams.
As a result of all of this, more than one-third (37%) responded that they were dissatisfied with their overall output as a CFO, due to the fact that they feel they are being inefficient and can do more. Lastly, 31% confessed that the huge amount of manual spreadsheet work is leaving them bored.
While these results don’t look great for any sector, it is even worse for highly skilled positions such as CFOs for a couple of reasons:
Leadership position- CFOs are one of the most important decision makers in the company and have direct responsibilities for the finance team and broader responsibilities over the rest of the company. Dissatisfaction and inefficiency are not good things to have hanging around as they can influence not only the CFO’s output, but the rest of the company as well.
The Great Resignation- The skills shortage and Great Resignation are still very much around, and perhaps even more difficult to combat thanks to increased inflation and lingering supply chain issues. It is for exactly these reasons (stress, inefficiency, family time, etc.) that people are quitting their jobs for greener pastures, and a highly sought after skilled job such as a CFO will have many options if they get too fed up with the current situation.
Challenges among companies of all sizes
Even though the survey was completed with companies of under 500 employees, and with over 40,000 businesses in North America alone that have over 500 employees, perhaps the statistics would look different in a survey of that kind, the problems are actually exacerbated as companies get bigger.
The larger the company the greater the problem as the sheer amount of inefficient time is multiplied as the number of finance employees grows. Interestingly enough, the number of people who spend time on the budget process is significant: 12 people on average with organizations less than 300, and 23 people for organizations with more than 500 employees.
Changes in the CFOs office
As a response to the manual work and all of the negative implications (in the workforce and outside), to go along with the changes from Covid-19, companies are rethinking how finance teams operate. According to the survey, 92% of CFOs have created significant changes since Covid emerged to try and improve the inefficient processes that only grew during the pandemic. Among those, 33% have adopted new technologies (the biggest CFO response to the pandemic), while 18% have hired more employees to ease the workload.
Didi Gurfinkel, Co-Founder and CEO of DataRails says: “While CFOs have emerged as a catalyst for change particularly since COVID-19, the reality is that daily processes are preventing finance leaders from achieving their maximum impact. In particular, fixing errors and chasing down data is ever present, leading to dissatisfaction with performance and harming CFOs' overall quality of life. This constant frustration is creating a detrimental personal impact while preventing businesses from harnessing much-needed talent within the CFOs office.”
Understanding the negative impacts of manual work and all of the problems that it creates inside the CFO’s office and among finance teams is critical in improving the situation. Being that Excel is still the overwhelming go-to finance tool, adopting new technologies that have an Excel interface while reducing manual work seems to be the most effective solution according to the survey report.