The costs of the finance and accounting function at many companies are expected to climb in the next few years, according to a new survey.
The Benchmarking the Accounting & Finance Function 2016 report from Robert Half and the Financial Executives Research Foundation, the research affiliate of Financial Executives International, found that while many companies reported the overall cost of compliance requirements remained steady from 2015 to 2016, more than half of U.S. (68 percent) and Canadian (60 percent) companies expect their compliance burden to rise over the next three years.
The researchers surveyed more than 1,700 financial executives from public and private companies in North America, and conducted follow-up interviews, to compile the report. They also found employment-related costs spiked sharply for the largest companies ($5 billion or more in revenue) to 5 percent of revenue, compared to 1.1 percent in 2015. According to the study, this may be a reflection of the tight market for talent, which has prompted many companies to spend more money recruiting and hiring accounting and finance professionals.
"The need for resources is a common theme," said Robert Half senior executive director Paul McDonald in a statement. "Financial executives are asking themselves 'How do we do more with the same amount of resources?' Some firms are addressing the issue by using interim staff for special projects or during peak periods to ensure their finance and accounting functions are running proficiently."
The study found that 62 percent of U.S. respondents said they're either using cloud-based solutions or plan to in the future, compared to 51 percent last year. Canadian respondents have been slower to embrace cloud-based solutions, with 47 percent saying they use or plan to use cloud-based computing platforms in the future, compared to 46 percent last year.
The percentage of U.S. companies that use an on-premises enterprise resource planning system as their primary financial system dropped considerably to 32 percent in this year's survey from 53 percent last year. The use of on-premises ERP systems among Canadian firms surveyed also decreased this year to 42 percent, compared to 58 percent in 2015
More than half of U.S. (52 percent) and Canadian (55 percent) companies rely on manual reconciliation of accounts.
"A prominent difference from last year's survey is that financial executives seem considerably more comfortable with using cloud-based solutions in their accounting and finance departments," said FEI and FERF president and CEO Andrej Suskavcevic. "In the ever-changing environment, it is essential for companies to benchmark their accounting and finance practices against others to remain competitive. This research can help identify best practices and areas of improvement."
Robert Half and FEI plan to host a webinar on June 21 at 11 a.m. PDT/2 p.m. EDT, to discuss the report findings. The complimentary session qualifies for one unit of continuing professional education credit.