Executives agree that finance and accounting are key to business growth, but few make the investment

According to the 2022 Financial Maturity Study by Paro, a Chicago-based startup disrupting the way companies access on-demand financial expertise, 93% of CFOs believe investments in finance and accounting are essential to support business growth. However, only 24% of executives say they are investing in these features to drive growth. Rather, they say they are focusing resources on efficiency, resulting in potentially limited scope for expansion.

Efficiency is the reason for the investment

The study found that senior finance executives view finance and accounting as a critical component of their company’s long-term success. When asked to choose which function gives their company the best opportunity to build core competencies, the majority (52%) chose finance. Operations and personnel management (49%) and accounting (46%) are followed by a small margin.

However, 38% of CFOs say that when their company invests in resources for their finance and accounting team, they focus on improving efficiency. Another 33% said the investment is focused on raising money, and 5% say the investment is focused on recovery efforts, such as turnaround strategies or dealing with the effects of macroeconomic situations.

“Finance and accounting is a critical focus of business growth, and companies that focus too much on efficiency without having the proper resources to leverage it will hinder their own growth,” said Anita Samoyednik, CEO of Paro. “As companies navigate current recession concerns, those that embrace a flexible model that can drive both efficiency and growth will be best placed to weather economic challenges and build long-term competitive advantage.”

Low throughput, lack of strategic leadership and profitability are challenges

CFOs say the most common challenge they face is lack of bandwidth to take advantage of new opportunities (38%). This is followed by responsiveness to investor demands (36%) and lack of strategic advice for decision-making (34%). Additionally, 60% of CFOs also say profitability is a financial challenge facing their company.

To overcome the challenges, financial service providers are often seen as solutions. When evaluating these providers, the most important criteria are having a system that provides an innovative technology platform (36%), providing data and information to help make decisions (34), and helping to plan and optimize the next business steps (34). %) and provision of individual solutions for business problems (32%).

Hiring is still seen as a barrier to growth

Many CFOs (39%) cited hiring and retention as the top obstacle to business growth. This may explain why 79% are willing to increase their company’s headcount to take advantage of leaps or expansions in their solution offering. However, only a small proportion (16%) already do so.

The majority (53%) see flexible staffing and resource selection as an effective strategy to protect their company from threats of market volatility. In fact, 69% of CFOs say their company relies on part-time resources for their finance and accounting teams, while only 19% say their company’s finance and accounting team is made up entirely of full-time professionals.

“It’s clear that CFOs recognize the importance of flexible operating models to take advantage of market opportunities and hedge against volatility,” Samoyednyk said. “However, there is a clear gap between the desire to do this and the ability to actually use and deploy an agile talent management strategy that can enable them to fulfill their potential.”

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