July 26, 2022
Finance Industry

The top finance department challenges in 2022—and how to solve them

Would you give up your much-needed vacation time if it meant you never had to deal with expense reports again? According to Beyond the Balance Sheet: The Top Challenges Facing Finance Teams, our latest research conducted by Material, one in three finance professionals say yes (!). 

The good news: you can keep your PTO and make your expense management process easier, too. But before we get ahead of ourselves, let’s take a look at what makes finance pros so eager to dodge expense reports in the first place. 

Challenge #1: Finance processes are stuck in the past

In 2022, approximately half of knowledge workers make business purchases in a given year. We predict that percentage will only go up as businesses realize the impact a distributed approach to spending has on accelerating company growth.

However, many finance teams don’t have the proper infrastructure in place to keep up with the speed that businesses operate at today. In other words, they are relying on the same decades-old processes that weren’t designed for this new way of spending, resulting in more manual work–and more burnout.

Beyond the Balance Sheet found that 7 in 10 finance professionals believe their tools and platforms aren’t as strong as those of other departments. This lag is especially taxing when it comes to expense report management, which most agree is one of the most frustrating parts of their job. Almost half of expense reports are sent back to employees due to errors; that alone speaks to the need for process improvement in the finance department.

Challenge #2: Inefficient finance systems waste precious time

In addition to agreeing that their systems are behind the times, nearly a third of finance professionals go so far as to say that the lack of access to digital tools, infrastructure, and automated solutions is one of the greatest setbacks in their role. Without technology that tracks real-time financial data as it happens, they are forced to hunt down receipts, do best-guess accounting, and have awkward conversations with employees.

The result: finance is spending more time than they’d like on virtually everything they do. In fact, according to the research, finance professionals spend nearly 61 hours each month reconciling spend, record keeping, processing expense reports, and monitoring fraud. That comes out to more than seven full business days each month dedicated to resolving issues caused by inefficient systems and technology—a major increase from the time spent on such tasks last year (around 55 hours each month in 2021).

Challenge #3: Finance processes can slow down the whole organization

Similar to the finance team, the majority of employees confess that they’re frustrated with the lack of efficiency in current finance processes at their company. Knowledge workers report spending nearly 28 hours each month working with the finance department to confirm payment status for their vendors, resolve expense report issues, and understand how their spend fits within their budget. Moreover, these employees claim to spend around 46 hours per month (over a week!) on individual responsibilities like organizing receipts, filing expense reports, figuring out corporate card purchases, managing others’ spending, and contacting vendors for missing receipts.

If purchasing, expense, and invoice processes were more efficient, employees would be able to put more energy toward the work they were hired to do. In that time spent on back-office processes, many employees said they would have focused their resources on business development and strategic long-term planning. 

Challenge #4: The month-end close process is more daunting than ever

As a result of these inefficiencies and lack of automation, month-end close remains high on the list of what keeps finance professionals up at night—due not only to the sheer amount of manual work, but also to concerns around the accuracy of that work. 

On average, finance teams spend 43.33 hours closing the books each month.

However, even after all that time and effort, over a third claim they aren’t confident that their month-end numbers are 100% accurate. Since surprise or mystery invoices can come in at any moment, finance often spends time tracking down information and documentation to make the numbers add up each month. 

Building the finance team of the future

Something nearly all finance professionals have in common is their desire to create more efficiencies in the way they work. Since many finance processes are employee-facing, 9 in 10 finance professionals believe it’s important to give employees the tools to make purchasing decisions as quickly as they need to get their job done.

These common frustrations are why many finance teams are turning to an all-in-one purchasing platform. Through automation, finance can empower employees to buy what they need while maintaining real-time visibility and control over company spend. 

Download our full report for more insight on increasing productivity and replacing mundane manual tasks with fulfilling work that contributes to company growth.

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