I’m a huge fan of the CFO and APQC Metric of the Month series. It’s something that satisfies the numbers nerd in me and gives a different perspective on the important things that others find important in the finance world.
In fact, it’s something I used in the series on top metrics to focus on during the road to recovery series that explored everything from uncontrollable balances to duplicate and erroneous payments, and it’s something I’ve kept up with over the past few years. But their most recent Metric of the Month article caught my eye and actually brought me back to a statistic I’ve quoted for years.
The article, Time Allocation in Finance, looked at which activities get the lion’s share of finance’s time while offering tips on what you can do to spend time more wisely.
Breaking down the role of the professional into control tasks, transaction processing, management activities, and decision support activities, this article found that approximately 40 percent of hours are allocated to keeping the lights on. While yes, this does point to an area for improvement, it also represents a small cause for celebration—companies have shown great progress in reducing the time spent.
Finance Has Cut Transaction Processing from 49% of the Week to 40%
For the last half decade, I spent a lot of time citing the APQC transaction processing metric, noting that highly paid finance staff spends the equivalent of Monday through lunch on Wednesday working on transaction processing. Now, it’s simply Monday through end of day Tuesday.
Defined as activities such as general accounting, processing accounts payable and receivables, processing journal entries and invoices, responding to basic customer or supplier inquiries, and producing financial statements, transaction processing is important to keeping the business running.
The Right Balance is Critical
But it’s not the only role and definitely not something that plays into the long-term evolution of a company. It’s that other 60 percent of the day that positions companies for success. Control tasks keep you compliant, management activities ensure the team continues to improve, and decision support helps you define a clear picture of the future.
In turn, finding the right balance of activities is critical for success, and the latest article showed significant progress. As discussed by Perry D. Wiggins, CPA,
“While companies allocate more or less time to these activities based on the work they do, any of these activities done in excess can be bad. Too much time spent on transaction processing can hamper strategic work, for example. However, spending too much time on decision support by working and reworking scenarios can also sap time away from mentoring direct reports or working to ensure the right controls are in place.
Has Finance Embraced Automation?
For decades, leaders have looked to find this balance and many have turned to automation in order to align processes. From the continued move to implement AI to facilitate this to something as simple as working with a leading provider of AP and AR software, management is finding that when they can ensure data and processes can flow seamlessly from application to application.
Knowing this, seeing that finance professionals are spending four hours less each week is exciting. Seeing this big of a cut in half a decade points to the technological advancement and process automation efforts across the board. But it pays to ask—are you a leader or a laggard?
Get on Board with Automation: Free eBook from Controllers Council
Consumer digital payments are now more common than traditional payment methods. They’re quicker, easier, and more convenient than paper checks or dollar bills. Businesses, however, have been slower to join the digital payments revolution. Surprisingly 86% of businesses are still using paper checks.
Learn how your organization can move to a more efficient AP & AR process. Download the eBook Automating Your Financial Processes to learn how you can implement an automated approval workflow for POs to reconciliation, stop using paper, and decrease missing invoices. If you’re looking to improve your processes and move from the bottom performer to the top, a recent eBook from Controllers Council sponsor Bill.com has the answers. Click here to download the eBook, Automating Your Financial Processes.
Additional Automation Resources