Forecasting, skills shortages and cash flow pain points

As businesses face up to the ongoing fallout from the pandemic, Rob Binns, CFO of Access Group, considers the challenges facing financial teams from forecasting to cash flow pressures

Last year arguably had the biggest impact on the role of the finance team for generations. We had a lot to contend with - which isn’t something new for accountants and finance professionals as our roles have traditionally been a balancing act of responsibilities and workloads that we often have to juggle to meet strict deadlines.

But last year was different. To understand the true impact of Covid-19, preparation leading up to Brexit and the challenges facing finance teams day-to-day, we sent out a survey to more than 1,000 UK CFOs, VPs, finance directors and managers in December 2020 - it produced in-depth insights about the pain points that will resonate with most finance professionals.  

Staff and skills shortages compounded by furlough, redundancies and staff self-isolating, added responsibilities like preparing for Brexit and helping to fuel recovery and inefficient processes hampering forecasting - have all contributed to unmanageable workloads. Something which was a common theme throughout the responses as finance professionals shared their frustrations and challenges.

 Payments and forecasting revealed as the least efficient

Almost two thirds of finance professionals who responded to our survey named either payments (26%), forecasting and budgeting (21%) or document processing (16%) as the least efficient responsibility of the finance team.  

Payments came out on top with most finance professionals citing it as their most time-consuming task. Respondents put this down to factors such as the ‘software being too old and slow’ or ‘not enough money coming in so it's hard for the team to complete their jobs efficiently’. 

And, the impact of payment inefficiency is already being felt. When asked about the biggest overall challenge for finance professionals in 2021, aside from Brexit and Covid-19, one third of all respondents (33%) said cash flow.

Making and receiving payments on time helps to ensure smooth cash flow within the business. If finance teams are unable to, it can impact them carrying out other tasks accurately and completely.

Which is why it’s no surprise that 21% of respondents named forecasting and budgeting as their least efficient task, in the current environment. Respondents replied with things like ‘not able to predict the future’ and that it’s ‘impossible to forecast in an uncertain economic outlook’. While finance teams may not be able to predict the future, they can certainly plan for it if they have the right tools at their disposal.

All these inefficiencies mount up to only exacerbate unmanageable workloads.

Staff and skills shortages

Adding to the pressures on workloads are staff and skills shortages. We are now seeing this through the lens of Covid-19, with 27% of our respondents in agreement that this is their top challenge for 2021. The pandemic has unfortunately forced some companies to make reductions in staff numbers or rely on the support from government grants like the furlough scheme. This has left remaining employees to pick up the extra work and responsibilities, while they themselves may also have needed time off to self-isolate or recover.

Let’s not forget that teams have also had to respond to challenges remotely - which adds extra barriers to communication. Although we have various video calling apps, messenger services, emails and phones - it’s still not as easy as exchanging information or discussing reports when together in the office.

As our roles change, finance teams and accountants have become more focused on financial strategy and helping the business to recover. With these new responsibilities comes the requirement for new skills, which means it's likely that learning and development will need to be a key part of the strategy for team development. Introducing or increasing training will not be easy. We have already talked about finance teams facing time constraints - so finance leaders will need to look to integrating training as part of wider solutions to easing workload.  

Lots of responses in the results also mentioned staff morale being a key issue to overcome for finance teams. As fragmented teams continue to work in isolation, with the return to the office still potentially months away - how do you keep team members motivated and engaged while looking after their wellbeing? All of the above are staffing challenges finance teams will be aiming to find positive outcomes for this year.  

Fundamentally, the results of our survey demonstrate an imperfect storm of challenges that all add up to finance teams needing to find time and resources. Therefore, finance teams will be searching for solutions to their pain points and earmarking investment towards improving tools could be one way they turn - which many of our respondents highlighted as priorities in 2021.

Payments software and cloud accounting tech priorities  

According to the finance professionals who responded to our survey, 74% expect to adopt further technologies in 2021 to support theirs and their teams finance and accounting practices. Cloud accounting software was at the top of the list for 24% as they look to transform the way they share, store and collect the vast amounts of financial data their business produces. This in turn helps to ensure data shared across the business is more accurate and timely, shoring up the validity of forecasting and reports.

It’s no surprise that after many finance professionals indicated payments to be their least efficient process, that 23% expect to invest in payments software in 2021. The importance of a good cash flow was not understated in the survey’s findings, and ensuring payments are made and taken in a timely fashion has a big role to play in keeping cash flow healthy.

After the financial shortfalls faced by many last year - the adoption of payment software and spend management solutions will only become more important. Especially with the return of travel and expenses, keeping a close eye on all costs will be essential.

Finance teams have a challenging period ahead, one in which many of the pain points cited in our survey will continue to frustrate. But as 2021 progresses, we hope finance professionals are given the support and tools they need to alleviate mounting workloads, release the shackles of inefficient processes and then as recovery begins to take shape, new staff and new skills to help them manage their responsibilities.

To view The Access Group’s full report, Financial Business Health Check: Alleviating your pain points in 2021, click here.


About the author

Rob Binns is CFO of Access Group

Rob Binns |CFO, Access Group

Rob Binns is CFO of the Access Group. He joined...

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