Survey also shows appetite for cloud financial systems increased during pandemic, as businesses using cloud software adapted more easily to a remote close than those using on-premises software
ATLANTA, June 02, 2021 (GLOBE NEWSWIRE) — Sage (FTSE: SGE), the market leader in cloud business management solutions, today shared the results from its annual Close the Books Survey. Based on a poll of more than 1,600 finance and accounting professionals, the survey reveals that closing the books for many organizations is still an exercise in endurance. For nearly 60% of respondents, the close process takes over a week, delaying access to reliable information vital to business direction.
The survey found the top obstacles impacting the close process were data manipulation in spreadsheets and data imports/exports. These manual tasks have a significant impact on the time to close – slowing the process and leading to businesses making decisions based on stale information. In fact, those businesses most impacted by spreadsheet manipulation have a close process that is 36% longer than those only slightly impacted.
Similarly, the time spent on each manual data import or export adds up and contributes to a slower close. Respondents who were most impacted by manual data imports and exports on average had a close process that is 25% longer than those who were only slightly impacted.
Cloud financial management systems provide users with opportunities to eliminate or reduce these manual tasks. They are designed to enable companies to complete key tasks like consolidations, accruals, and allocations directly in the system – as opposed to maintaining a separate spreadsheet for these tasks. Cloud based systems also offer application programming interfaces (APIs) that make it easier to connect with other business systems to automate more of their data imports/exports.
“Today’s finance leaders are being called on to not only report the numbers, but to provide strategic guidance for their organizations,” said Dan Miller, Sage’s EVP of Medium Segment (interim). “Long, onerous close processes not only dampen team morale, but impede an organization’s decision-making when it can’t get current, accurate information at critical times. Having the right technology in place enables finance and accounting teams to speed the close and gain faster insights as they evolve from being historians to visionary business leaders.”
More Companies Heading to the Cloud
One of the other key trends seen in this year’s results was an increase in companies planning to move their financials to the cloud. 58% of respondents currently use a cloud or hybrid accounting system. Of those still using on-premises solutions, 70% were planning to move to the cloud – up 27% relative to last year’s survey. This increase was likely driven by opportunities to shorten the close process and lessons from the global pandemic.
For example, when looking at the impact of COVID-19 on business continuity, those who were already on cloud software had a leg up when transitioning to a fully remote close. 59% of businesses using cloud financial systems reported an extremely smooth transition to a remote close, versus only 32% of those still using on-premises software. Businesses with cloud-based systems were able to maintain accessibility to their data and continue operating without skipping a beat during the sudden transition from an in-office close experience to a remote workplace.
Other key findings from the Close the Books Survey include:
- Automating consolidation activities including currency conversions, inter-entity transactions, local tax reporting, and more eliminates hours to days of manual work so organizations can close the books 25-70% faster.
- Respondents who automate more than 50% of their journal entries close the books 20% faster.
- Among those respondents with more than 5 business entities, closing the books is two days faster when using a cloud financial management system instead of spreadsheets or QuickBooks.
- 40% of organizations invested in assistance with closing the books via added headcount or new technology over the past two years. Those who invested in technology closed their books 25% faster than those who invested in headcount and can allocate more of their time to strategy rather than manual work.
To see the full results, download a complimentary copy of the 2021 Close the Books Survey report.
Sage is the global market leader for technology that provides small and medium businesses with the visibility, flexibility, and efficiency to manage finances, operations and people. With our partners, Sage is trusted by millions of customers worldwide to deliver the best cloud technology and support. Our years of experience mean that our colleagues and partners understand how to serve our customers and communities through the good, and more challenging times. We are here to help, with practical advice, solutions, expertise, and insight. Learn more at www.sage.com/en-us/ and www.sageintacct.com/.
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