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If you’re feeling like your finance team is languishing, we’ve got news: It’s not just you. Finance teams around the world think they’re less efficient than they were a year ago, according to new research from insightsoftware, a global reporting, analytics, and management solutions company.
All responsibilities insightsoftware tracked saw efficiency drops in 2023, with capital management and treasury, short-term business strategy, and mergers and acquisitions tumbling the most.
That might not be shocking, considering the external challenges of 2023. 70 percent of survey respondents, which included 519 senior accounting and finance professionals, said the “triple squeeze” of inflation, economic disruption, and potential recession was causing pressure.
But identifying a single culprit for this widespread feeling of inefficiency isn’t as straightforward as you might think. “It’s impossible to correlate this result with any one factor,” the report’s authors wrote. “More likely compounding external and internal pressures have resulted in less resources to complete the same amount of work as last year, creating a noticeable drop in efficiency.”
Still, two factors stand out in 2023. First, there are skills shortages. Only 64% of survey respondents said they expected to grow their team this year, down from 73% in 2022. That outlook is better than 2021’s 50%, but the report’s authors think it still “clearly shows that CFOs are approaching hiring with a more balanced mindset.”
Skills shortages have become an industry-wide challenge. Recruitment firm Robert Half found that 89% of finance and accounting managers faced challenges finding skilled talent in the first half of 2023. Couple that with the fact that the majority of the CPA workforce has reached retirement age, and you’ve got a perfect storm brewing.
“The finance labor force will take a long time to recover, and CFOs must look to other avenues to increase their team’s efficiency and capacity,” the insightsoftware report’s authors noted.
And there’s one thing that could’ve made finance teams more efficient this year: automation. 24% of finance teams said manual and time-consuming tasks were still a key challenge in 2023, but only 25% of respondents said they’re prioritizing automation this year, down from 40% in 2022.
Some of this decrease could be related to tense relationships between finance and IT departments, according to the report; only 28% of respondents said they felt completely satisfied with their IT teams. Meanwhile, 66% said they already felt too reliant on their tech teams.
But many experts are still excited about the prospect of digital innovations, like in the generative AI market, which is expected to be valued at $36 billion by 2028, according to S&P Global Market Intelligence.
“Achieving predictability amidst uncertainty requires finance teams to enter a new stage of digital transformation,” Bryan Motteram, insightsoftware’s VP of product marketing, said in a statement tied to the report. “With the right technology, CFOs can build agility that drives the resilience needed to meet the demands of today’s economy.”