Business finance teams need to evolve if they are to support growth

2nd February 2015

Just 40% of companies agreed their finance team’s management information is insightful, according to Deloitte, the business advisory firm.

 

 

 

Deloitte’s finance benchmark survey found that for companies with turnovers over £100m, this figure falls to 35%. This compares with smaller businesses – those with turnovers of less than £100m – where the figure is 48%.

The research showed that 66% of businesses do not regularly review finance data for accuracy, with one in 10 carrying out no data-quality testing at all. Most respondents use only manual testing, and less than one-quarter believe data quality measurement is embedded in their business. Microsoft Excel is the most commonly used tool for collating and analysing data for producing management reports, with 60% overall using this tool. The figure among large, listed companies is lower, but 50% still use Excel for part of the process.

Lucy Newman, Deloitte audit partner, said: “Many finance teams will be disappointed by these results, but all is not lost. Better insight can be achieved by improving data review processes and using a smarter balance of historic and forward-looking KPIs aligned to strategic business goals. Less time spent on routine tasks means more time for activities that deliver real value for the business. In turn, we should see a more solid foundation for meaningful management information, and this can only be a good thing for a business’ growth.”

Deloitte’s survey also highlighted the need for finance leaders to invest in talent, which is set to become increasingly sought-after as economic activity picks up. However, the results indicate a difficulty to recruit people with the right skills, particularly in business intelligence or financial planning and analytics.

Simon Kerton-Johnson, Deloitte finance partner, continued: “While overall, respondents told us they are happy with their finance teams, commercial and strategic capabilities emerged as an area where there could be a potential weakness, and this is especially true in larger companies. Among businesses with a turnover under £100m, 48% told us this skill is strong. But, for companies exceeding £100m turnover, the figure is just 34%. Part of the problem is a basic lack of candidates with the right experience and qualifications. The onus will be on finance leaders to recruit and develop people with the analytical skills and commercial understanding needed for insightful reporting.”

“By addressing these priorities, finance leaders can ensure their functions are ready to deliver the data and insight businesses need to support growth. As the economic outlook gradually improves, the finance function can help business leaders understand where to focus investment, monitor the impact of new strategic initiatives and track performance, progress and profits.”

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