How Finance Teams Have Adapted to New Realities
While 99% of finance teams experienced at least one challenge due to COVID-19, teams of all sizes demonstrated adaptability.
When we surveyed finance teams for our second annual expense management report, we couldn’t ignore the dramatically different economic and social environment we’re all experiencing as a result of the COVID-19 pandemic. We wanted to know how finance teams have been addressing unanticipated challenges and opportunities.
We weren’t surprised to hear that 99% of respondents said their finance teams experienced at least one challenge due to COVID.
Adjusting to New Ways of Working
The good news is our research showed that finance teams have shown a high degree of adaptability.
While most respondents cited numerous challenges at the onset of the COVID-19 outbreak, most of those challenges subsided within the first six months as teams adjusted to the new ways of doing business.
Working remotely was far and away the biggest challenge at the onset, faced by 76% of respondents. This was felt most keenly by large companies (77% initially struggled with remote work, compared to only 62% of small and mid-size companies).
Fortunately, by the time of our survey, respondents felt less challenged overall by working from home. In the most dramatic shift, only 35% of companies said working remotely was still a challenge.
Other categories saw less dramatic shifts. Getting more done with fewer people or resources remains high, for instance, dropping from 57% being concerned at the onset to only 51%.
Controllers Feel Ongoing Challenges More Acutely
Comparing responses by role to the question about the impact of COVID on finance teams revealed some interesting differences in perception. CFOs and controllers had different responses, both in terms of initial challenges and how things leveled out. (We have seen a similar disconnect in previous research.)
For example, 87% of CFOs cited working remotely as an initial challenge, dropping to 20% several months in. Meanwhile, a smaller number (53%) of controllers said it was a challenge at the onset, and slightly more (59%) reported that it remained a challenge several months later.
Controllers also reported ongoing challenges with closing the books; more frequent planning, budgeting, and modeling; and knowing where the company stands on revenue and expenses. Their CFO counterparts reported fewer challenges in those areas compared to the onset of COVID.
The difference could be that while both roles were involved in responding to business changes due to COVID, controllers have ongoing responsibility for day-to-day operations and likely feel the continuing impact more acutely as a result.
A Shift in Priorities
While the drastic decline in travel over the last few months has meant fewer expense reports to process, the dramatic move to remote work and the urgent need to reassess financial resources have illuminated inefficiencies in existing workflows and processes. Finance teams have had to refocus their attention on analyzing spend, identifying opportunities for cost savings, and figuring out where they stand on revenue and expenses.
We’ve heard from finance teams that they want to use this time to continue to figure out more efficient ways to work with a distributed workforce, to manage better resources more closely, or to devote fewer resources to time-consuming, manual work. Our research bears this out, with the vast majority of respondents planning to invest in new technology initiatives in response to COVID.
Investing in the Future
Given the challenges faced by finance teams in pandemic times, including fewer resources, working remotely, and needing to find cost savings, more than 90% said they plan to take on at least one technology initiative in response to COVID.
The majority (84%) have more than one initiative planned or underway, and on average, companies have 3.5 initiatives planned, ranging from upgrading legacy software to digitizing and improving manual invoice and expense processes.
For large companies, top initiatives include “improving data tracking, reporting, and dashboards to help decision-making” and “shifting away from spreadsheet-based budgeting.”
For midsize companies, top initiatives include “automating routine finance processes through AI, ML, and RPA” and “upgrading legacy software (e.g., ERP, expense management).”
The highest priority for smaller companies was digitizing paper or manual invoice and expense processes.
TO THE POINT:
While finance teams adapted remarkably well in 2020, COVID highlighted the urgent need to improve inefficient processes and workflows, including expense management.
Expense management still takes too much time, preventing finance teams from the more important strategic work they need to do.
Finance teams are ready for both greater efficiency and greater access to data, so they can help make more timely, informed, and strategic decisions.
That’s why we’re seeing more companies investing in technology that will help automate time-consuming processes. Any upfront costs ease budgets and time constraints in the long run, opening companies up to better planning and more nimble decision making in an unpredictable world.
How Center Can Help
Center is a complete corporate credit card and expense management solution that delivers real-time visibility and flexible spend controls to automate expense tracking. Center simplifies expense processing for the entire company, saving time for employees, improving operations for the finance team, and delivering live insights for managers and executives to help with strategic planning.
Making a switch to Center is quick, easy, and free. When you’re ready, we’d be happy to give you a personalized demonstration of how Center can help your organization.
Read our full 2020 Expense Report, Adapting to New Realities, here.