A recent Barclaycard survey shows that 48 per cent of Chief financial officers (CFOs) think that current accounting systems are too complex.
According to the survey, some of the main reasons that CFO’s find their accounting systems to be too complex are that they are not digitised enough and too are labour intensive. This is the reason why 44% of CFOs say that they would want more automation when they upgrade.
Not Investing Could Be Affecting Bottom Line
The Barclaycard survey also found that a Chief Financial Officer’s (CFO’s) leadership style and willingness to invest in their financial and accounting software has a real impact on their businesses’ bottom line. For example, over a fifth (22%) of finance heads believe their accounting software is out of date, which, according to Barclaycard, could mean that UK CFOs are missing out on £6.7 billion each year by not taking advantage of early payment discounts.
Complex And Out Of Date
According to Barclaycard’s survey results, even though 85% of the CFOs surveyed said they recognise the need to continuously invest in their accounting systems, this is clearly not happening and this may be because more than three-quarters (77%) admit to not having time and resources to find the right one.
This lack of investment and time, coupled with apparent resistance to change in many businesses appears to have led to a situation whereby 22% of businesses are using out-of-date accounting software, with 40% of businesses not having upgraded their accounting software for five years!
Barclaycard’s survey indicates that because many accounting software systems are outdated, companies can’t automate payments to meet supplier conditions for an early settlement discount, and this could mean that UK corporates are missing out on of £14.4bn of saving per year (the equivalent of £75,389 per business).
This survey, conducted on behalf of Barclaycard conducted by Opinium Research in February 2019, was carried out among 500 senior financial decision makers in companies with turnover of £6.5 million or more and who do not outsource their accounts payable.
What Does This Mean For Your Business?
Even though the research was conducted by Barclaycard, which has an interest in accounting systems, it does highlight some of the challenges and barriers to upgrading that many businesses face, such as not having the time, money, and other resources to help them invest in a new system, thereby making them miss out on possible savings from early settlement discount.
It is not just with accounting systems that businesses would like to reduce complexity and increase automation where possible but struggling with accounting technology and systems is certainly not uncommon. For many small businesses, it’s often a case of using desktop accounting software with related third-party apps and integration without much software training and asking the accountant for technology advice. For example, a recent Zoho and AccountingWeb report showed that small businesses ask their accountants for technology advice 83% of the time, and 40% of those accountants say they are asked technology questions up to 20 times a month.