Executives overwhelmingly agree that finance and accounting is key to business growth, but few are making the investment, the Paro study finds

CHICAGO–(BUSINESS WIRE). However, only 24% of executives say they are investing in these capabilities to drive growth. Rather, they say they are focusing resources on efficiency, resulting in potentially limited opportunities for expansion.

Efficiency leads to investment reasons

The study found that finance executives view finance and accounting as a critical component to their organization’s long-term success. When asked which role offered their organization the greatest opportunity to build core competencies, a majority (52%) chose finance. Closely followed by Operations and People Management at 49% and Accounting at 46%.

However, 38% of senior finance executives say they focus on being more efficient when their organization invests in resources for the finance and accounting team. Another 33% said investments are focused on raising money, and 5% say investments are focused on recovery efforts such as turnaround strategies or addressing the impact of macroeconomic situations.

“Finance and accounting is a key growth hub for companies, and companies that focus too much on efficiencies without having adequate resources on hand to leverage them will hinder their own growth,” said Anita Samojednik, CEO of paro. “As companies consider current recession concerns, those that prioritize a flexible model that can drive both efficiency and growth are best positioned to meet economic challenges and build long-term competitive advantage.”

Low bandwidth, lack of strategic leadership and profitability pose challenges

Finance executives say a lack of bandwidth to embrace new opportunities is the most common challenge they face (38%). Closely followed by responding to investor needs (36%) and a lack of strategic advice for decision-making (34%). Additionally, 60% of senior finance managers say profitability is a financial challenge for their organization.

To meet challenges, financial service providers are often seen as the solution. When evaluating these vendors, top criteria include having a system that offers an innovative technology platform (36%), provides data and insights to make decisions (34%), and helps guide the next steps of the journey company to plan and optimize (34%) and provide customized solutions to a business problem (32%).

Recruitment is still seen as an impediment to growth

Many senior finance executives (39%) cited staffing, hiring and retention as the top barrier to business growth. This could explain why 79% are willing to increase their company’s headcount to capitalize on volatility or expand the range of solutions. However, only a small proportion (16%) are already doing this.

A majority (53%) see flexible workforce and resource planning as an effective strategy to protect their business from the threats of market volatility. In fact, 69% of senior finance managers say their company relies on partial resources for their finance and accounting teams, while only 19% say their company’s finance and accounting team consists entirely of dedicated, full-time resources.

“It is evident that finance executives recognize the importance of flexible operating models to capture market opportunities and protect against volatility,” said Samoyednik. “However, there is a clear activation gap between wanting to do this and being able to actually leverage and deploy an agile talent management strategy that enables them to fulfill their potential.”

methodology

The 2022 Paro Financial Maturity Study was conducted by Wakefield Research (www.wakefieldresearch.com) among 500 US senior finance executives between June 6 and June 15, 2022 using an email invitation and online survey.

About Paro

Paro is an AI-powered marketplace that delivers enterprise finance and accounting solutions through a combination of expert talent, data-driven tools and game-changing insights. Harnessing the power of people and technology, our growth platform offers flexible options ranging from transaction processing support to business development and funding strategy to solve core business challenges and fuel growth. The result enables companies and professionals to exceed even their highest goals.

Learn more at paro.ai.

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