Most CFOs are already well aware of the fact that routine transaction processing is costing their finance and accounting teams time, money and growth potential. But what is harder to understand is why this holds true for so many organizations, and how the best companies are able to leverage F&A teams without getting them bogged down by paperwork.
The solution to every CFO’s transaction headaches requires a new approach to these foundational F&A functions. Time and again, research has shown that the businesses that spend less time on invoices and data entry are able to spend more time on adding value through strategic planning. From there, these teams are more free to finally act on their growth plans, regularly evaluating and improving upon them to continue succeeding.
How much time transactions are taking
A survey of more than 1,500 finance and accounting teams conducted by APQC provided some deeper insight into the transaction processing problem. According to the report:
- Top-performing F&A teams spend only 30 percent of their work week on transaction processing, on average.
- Meanwhile, the worst performers spent around 55 percent of their time on these same tasks, almost twice as much as the time devoted by the top-performing group.
- For every $1 billion in revenue earned by the top-performing F&A teams, there were two employees, on average, processing it. Bottom-tier teams, however, devoted five times the workforce to process the same amount of revenue.
It’s clear that many organizations are facing obstacles in improving and scaling their transaction processing infrastructure. As Philip Bernstein explained for Tech Target, the nature of the beast that is accounts payable and receivable makes complexity and inefficiency almost inevitable.
- Even in the smallest businesses or the most basic transactions, multiple operations need to be performed – every sale in an online store, for example, needs at least a record of the payment and proof of shipment. Even these functions can quickly overwhelm as they scale up.
- As transaction volume and database size increase, efficiency tends to decrease, usually as a casualty of cost-saving measures.
- As a business expands geographically, inefficiencies only multiply. Payment processes and systems become decentralized, and time spent verifying or correcting records increases.
Transactional turnaround
In short, transactional F&A work turns into one of the most pervasive bottlenecks for any expanding business. At the same time, it is also an ideal target for improvement, as small changes will grow into measurable results and savings.
Perhaps the most obvious way to ameliorate the F&A transaction processing issue would be to take it off the team’s workload entirely. Many organizations are now realizing that this is no longer an unrealistic ambition – Consero connects F&A teams with the people and proven processes to tackle unwieldy payment accounts and bookkeeping tasks that have grown too quickly. Consero’s solution is uniquely positioned to benefit growth-stage business as well as large, established companies.
Processing transactions accurately and quickly is an absolutely critical function of every finance and accounting team. That doesn’t mean it needs to get in the way of business growth, though.
