Sage research reveals top pain points for financial close
Journal entries, bank reconciliation and reviewing transactions have been flagged as some key hurdles slowing down financial close, Sage research has revealed.
Finance teams spend an average of seven working days to close their books each month, totalling almost three months over the entire year, according to Sage's latest Close the Books survey.
Ahead of an upcoming webinar, the software firm has outlined some of the most time-consuming activities during financial close and the impact of automation on some of these activities.
Journal entries were listed as the top culprit for slowing down the financial close with 18 per cent per cent of respondents identifying this as the most time-consuming activity.
This was followed closely by bank reconciliation at 17 per cent and reviewing transactions for anomalies at 15 per cent.
Sage said that many finance teams are still completing these activities through manual processes and that automation could reduce the time spent on these activities.
More than half or 56 per cent of respondents said they are still using manual processes to review transactions for anomalies or inaccuracies.
Similarly, 51 per cent of respondents lack automation for journal entries, while only 9 per cent consider themselves very automated.
The report also noted that 47 per cent of finance teams are yet to implement automation for accelerating bank reconciliations.
The research also found that finance leaders who embrace automation cut their closing time by 29 per cent, which translates to two days every month and a total of 24 days a year.
Sage said this is valuable time that could be used on more valuable activities such as data analysis, training and personal development, strategic planning, team building and personal wellbeing.
Finance teams embracing the highest levels of automation have three times more time to spend on impact-driven value-added activities, the firm said.
Sage senior director of product marketing Sandi Main said the potential to reclaim two full days each month through automation is a huge opportunity for CFOs and their finance teams.
“By leveraging automation tools and technologies, finance departments can streamline manual tasks, improve efficiency, and accelerate the closing process," Main said.
"This newfound time can then be redirected towards activities that drive value for the company, such as financial analysis, forecasting, and proactive decision-making.”
Main said the research shows just how significant a role automation plays in freeing up that time.
"Respondents with the lowest level of automation available spend only 18 per cent of their time on value-added tasks, while those with high levels of automation at their disposal spend almost 58 per cent on these activities," she said.
Sage solutions engineering manager Justus Siage and Nick Fox from BDO's CFO advisory team will be delving deeper into some of the findings of the report and discussing strategies for speeding up financial close in an upcoming webinar next week.
