Finance teams at tech companies are often forced to inefficiently scale their headcount to manage the heavy workload of their finance operations; according to Ledge, the automated finance operations OS firm, which has released its finance industry report.
New benchmark data highlights that as businesses mature from early to late stage, finance team headcount grows at a rate of 3.5 times, which is around 20 per cent faster than all other combined functions of the company.
Ledge’s findings underline that tech companies are more dependent than ever on skilled finance professionals to manually deal with complex and high-volume finance operations, even in the midst of an unprecedented accountant shortage.
The number of CPA candidates sits at the lowest it has been since recording began, and 87 per cent of businesses say they find it increasingly hard to recruit the accountants they need.
The rapid adoption of digital payments has supplemented the traditional payment stack with a range of new ways to pay and be paid, and transaction volumes have simultaneously skyrocketed. In fact, PwC reports that there has been a 42 per cent increase in global cashless payment volumes, and it’s expected to further increase by more than 80 per cent by 2025, from 1 trillion transactions to almost 1.9 trillion.
This transformation in the payments space has created insurmountable challenges for finance teams at fast-growing businesses, who rely on spreadsheets and manual processes to manage massive volumes of payments data that are fragmented across disconnected silos. Forty per cent of finance teams’ time is spent processing transactions and 48 per cent of finance teams report that fragmented data is the largest impediment to them closing their books.
Global enterprises “still lack the automated tools they need”
Ledge’s finding that finance teams grow 20 per cent faster than the rest of the company reflects this strain – the increased complexity and workload forces tech companies to devote more and more manpower to their finance operations just to stay afloat.
Tal Kirschenbaum, CEO and co-founder at Ledge, explained: “While the digital payments space has seen considerable innovation, most finance systems and processes haven’t changed in decades.
“Finance professionals still overwhelmingly rely on Excel to manage their finance and treasury operations, stitching together an unbelievably fragmented stack of banks, PSPs, billing systems, databases, an ERP, and more.
“Highly skilled finance professionals at leading global enterprises still lack the automated tools they need to efficiently report on the most basic metrics like cash position and revenue.
“As our research indicates, these teams are instead forced to increase headcount with manual processes that dramatically increase the risk of material losses, expensive audits, compliance issues, and other challenges.”