CFOs should protect growth from hidden costs

While CFOs focus on external growth threats — supply chain costs, competitive pressure, talent shortages — a more insidious drain often operates undetected within their own finance departments.

Growth initiatives — new markets, acquisitions, subsidiaries — create internal friction for finance teams that can systemically drain the upside. And the more successful your expansion strategy, the bigger the internal inefficiencies can become — all while growth-oriented CFOs focus on external costs. The numbers reveal the problem: Up to 85% of a finance team's time is spent gathering and validating data, leaving just 15% for strategic analysis to underpin growth decisions, according to research by Accenture. Almost four in 10 (36%) of companies lose one day a week to financial reconciliation across multiple entities.

Defining the "multi-entity tax"

As organizations get more complex, with new systems and merged systems coming together, finance teams rack up what amounts to a "tax" on their efficiency via:

• Lost time: Finance teams have to reconcile activities, and much of this might have to be manual. In payments alone, a 2025 survey from Modern Treasury indicates that "nearly all companies (98%) have some manual payment operations processes, with most companies (51%) having between 26% and 50% of payment operations performed manually." Manual processes — whether for payments, reconciliation or other activities — result in a lot of "rote work," the study notes, to accurately track finances. In many cases, this happens in multiple disparate systems, especially if companies have engaged in acquisitions. Poor reconciliation practices also extend audit timelines, with problematic audits delayed by weeks, inflating both external fees and internal resource costs.
• Errors: Manual processes breed mistakes that demand costly fixes. As companies add entities as they grow, each new one exponentially drives up the probability of errors because of disconnected systems, misaligned cut-off dates and inconsistent data entry protocols.
• Crippled agility: With financial information in silos in disparate systems, executives lack full visibility into the data needed to make the best strategic decision. Even financial data that is weeks old could impact a growth decision. In markets where competitive windows close quickly, executives need data analysis that's solid enough to drive a forward-looking strategy and not just a backward-looking one based on old data. 
• Talent drain: With finance teams buried in rote work, manual processes and backward-looking data, highly paid strategic talent performs as expensive data entry clerks. As skilled professionals burn out from repetitive work, companies lose valuable people and then have to spend to hire and train new workers.
• Lost opportunities: Without a full and real-time view into cash flow, companies tend to keep capital as a precautionary buffer against unpredictable cash flows. This can hurt the ability to fund an opportunity. Unreliable forecasts can also delay market entries while messy financial records complicate M&A due diligence.

Finance leaders may consistently overlook these issues for various reasons. First, companies are hesitant to replace legacy technologies that once worked well but are only "good enough" as companies expand.
Many CFOs also assume their core ERP should handle specialized multi-entity challenges, but research shows that 70% of finance transformation projects fail to meet expectations — often because organizations rely on general-purpose systems to solve what becomes a specialized problem. Also, inefficiencies pop up across entities. This makes them harder to see and add up. So, even if finance team members see individual problems, they miss systemic patterns because they don't have a full view. Finally, leaders may prioritize compliance to avoid regulatory penalties but then miss the impact of inefficient processes. By optimizing for compliance, they may inadvertently constrain growth.

Breaking free of the tax

To break the cycle of inefficiency while pursuing growth, CFOs should: 

• Identify the scope of the problem. Figure out how much time is spent on manual processes and quantify that cost. 
• Check your core system. Does your ERP excel at foundational accounting but not specialized multi-entity workflows? 
• Act with precision. Target specific pain points with specialized solutions rather than massive transformations. 
• Measure. Metrics, analytics and reporting are top priorities for CFOs this year, and for good reason. To know where you want to go, you have to first know where you are. 
• Start small. Before spending big on new technologies, identify low-hanging fruit. Get wins and then expand your targets for change. 

As always, the companies that dominate won't always be the ones with the leading product or biggest existing footprint. They'll be those that continually excel at growth. The finance team is critical to this endeavor. Those that reduce inefficiencies and hidden costs will better enable their organization to move quickly to fund expansions and protect them from faltering after the fact.