Survey shows too many hours wasted on manual accounting. Automation can help.
The results of the recent Airbase Annual Benchmark Survey of Finance Professionals reveal that finance teams continue to spend far too much time on repetitive manual tasks. The irony is that many of these tasks don’t have to be so time-consuming and tedious. While an IBM report named accounts payable as the most automatable business process, an astonishing 38% of our 745 respondents told us that their teams spend more than 25% of their total time on manual tasks. In large finance teams (of more than 25 members), that number was even higher, at 44%. For a sizable minority (11%) of respondents from teams of all sizes, manual tasks take up more than half of their team’s time.
In an age when automating processes is integral to so many facets of the business environment, it was surprising that only a small number (3%) of our respondents say their teams spent relatively little (5% or less) of their time on manual tasks. Automating manual tasks was listed as a clear priority for 2021.
From our data, the majority of finance and accounting teams have a systems and software budget in the $25,000 to $200,000 range. Almost all listed some sort of general ledger accounting software, with Intuit QuickBooks, Oracle NetSuite, Sage Intacct, and Xero comprising the top choices. While other software solutions were listed in their fintech stack, those tools were used by fewer than 20% of respondents. A significant number still rely on spreadsheet software: 31% use Google Sheets and 48% use Microsoft Excel. Heavy reliance on spreadsheets is a hallmark of small to midsize company finance team operations, but building them, and then exporting the data in them, are manual tasks.
When finance teams work with multiple systems, it is impossible to escape the necessity of manual work because each of those systems have to be reconciled with each other, and then booked separately to the GL.
The survey’s findings back this up. Take a look at the responses from finance professionals when asked which tasks were done manually. At Airbase, we built an integrated spend management platform to address each one.
- 56% currently reconcile bank statements manually.
With an automated spend management system, bank reconciliations are made easy because they report bank activity and spend activity on the same basis rather than the bank numbers being consolidated.
- 42% spend time gathering documentation to create audit trails.
A spend management system creates a full audit trail of the entire spend lifecycle, including the approval chain, categorization, tags, vendor information, and payment details. With a full transaction record created as each step occurs, nobody has to hunt down documentation when it is needed.
- 41% fix errors manually. Manual tasks are inherently inaccurate. Automated processes (especially around categorization) reduce this risk — and automated controls further ensure accuracy.
- 38% gather information manually in order to create interim reports for outside teams.
Stakeholders need self-service access to reporting when needed, and this distributed access is possible with spend management. Furthermore, since all expense reporting is consolidated, there is a single source of truth, eliminating the need to gather information from disparate sources.
- 36% of respondents use spreadsheets and CSV files to transfer data manually.
When data syncs automatically to the GL, spreadsheet control is no longer an issue. In fact, spreadsheets aren’t needed at all.
- 34% process purchase orders manually.
In a modern spend management system, automated approval workflows can eliminate the need for purchase orders, and requests, vendor documents, and payments are stored in one place, without any required paperwork. And when a purchase order is required, an automated spend management platform like Airbase creates one, then uses OCR technology to attach an invoice to a transaction record, and creates a bill that can be matched against the PO, all without any manual effort.
- 32% perform manual categorizations for expenses.
When an expense report is reviewed by an approver before money is spent, all information, including the expense category, is identified and reviewed up front. Machine learning can further automate this process by coding expenses according to past patterns.
- 30% code transactions to the GL manually.
A direct integration to the General Ledger for virtual card purchases, plus an automated sync for all others, eliminates this time suckand helps companies move towards a continuous close.
Relying on the manual work necessitated by using multiple, disparate systems has a domino effect on other tasks, most notably the month-end close, with 61% of our respondents saying they took at least one week to close, and 18% saying it took more than two weeks. In contrast, companies who have moved to an automated and consolidated spend management system, where all spend data is consolidated and synced automatically to the GL, report that they’ve cut their time-to-close in half, and some have been able to move to a continuous, or rolling, close.
Spending a large amount of time on automated tasks represents a real loss, not just in terms of the higher number of hours worked, but also in terms of accuracy and a company’s ability to to fully use the talents of its staff. A Blackline survey found that almost 70% of business leaders said they’d made an important decision while working with incorrect data. When asked what caused errors in the data, the top reasons given were human error, the use of multiple data sources, and a lack of automated controls. And the underuse of accountants’ education and skills has long been a source of frustration for many finance professionals.
Respondents to Airbase’s survey recognize the need to move to more efficient and accurate processes. When asked to name their top priority for 2021, the top answer was “Improve or change finance operations by adding new systems or processes.”
Adopting new systems that reduce manual tasks can change the nature of AP work. To find out how you can benefit, contact Airbase today.
Airbase offers a one platform solution to manage all non-payroll spend. It provides oversight and control over spending with real-time reporting and automatic syncing directly to your general ledger. Control all payments – physical cards, virtual cards, ACH, and checks – from one place. Close faster. Empower employees. Control spend.