New global trends in technologies, data gathering, processing and analysis and ever present pressures for cost reductions are creating new challenges and opportunities for business development. Productivity must be increased across the whole organization for companies to remain competitive.
Approximately 8% of respondents’ business partners allocate 5% of their time to data collection, but the majority of business partners spend 11-30%. Only 47% of respondents’ business partners spend more than 31% of time on analysing and planning, as was the case in 2013. Business partners at companies in Slovakia still spend a great deal of time on data collection, rather than higher added value business tasks. Slovak companies still have a lot of room for further improvement in this area to achieve higher efficiency.
Despite the trend of decreasing costs of running the finance function, the cost increases in comparison to the year 2014. 36% of the surveyed companies spend below 1% of total the revenue, which is 4 percentage points lower than in 2014. The ratio of companies, that spent more than 4%, increased from 18 to 23%. Nowadays the new trend of digitalizing finance may be the cause of the cost increase. It reflects the investments into new software and updates. This is pictured in the running costs as depreciation. However, CFOs need to continue focusing on optimizing costs of running the finance function.
The survey shows a slow migration from MS Excel to more sophisticated programs, but respondents still rely heavily on MS Excel spreadsheets. In 2014, 68% of respondents used MS Excel to produce reports, this figure decreased to 65% in 2016. The extensive use of MS Excel has some disadvantages, such as lower effectiveness, extensive time requirements and higher error probability. This process can be significantly shortened and refined by implementing standardized ERP planning systems.
The month-end closing should be a focus area for finance function productivity, as the availability of timely results is essential for management.
Less than six days are needed to complete the month-end closing of 80% of respondents – 5% higher than in 2014. 32% are able to complete closing in three days. The surveys reveals an improvement in month-end closing time efficiency.
While the number of days required for the month-end closing have decreased, the number of days needed to prepare all the relevant reports has been increased. 80% of respondents complete all reports within six days of the month-end closing, compared to 87% in 2014. For more than 10% of respondents, more than 9 days are needed.