The State of UK Accounting: Identifying and Overcoming the Challenges to Achieving Accounting Operational Excellence
In the current wave of economic challenges, it’s almost possible to forget that businesses (and the humans that run them) have been facing elevated stress and unprecedented circumstances since the start of the COVID-19 pandemic. Add to that a number of recent regulatory changes, and the finance and accounting teams feel the pressure in a real way.
UK accounting teams, in particular, have found themselves dealing with a perfect storm of increasing demands and a decrease in the supply of experienced, knowledgeable accountants to get it all done. In fact, in a recent study of 500 UK Controllers and Finance Directors, 41% of respondents saw themselves mediocre to “very bad” at meeting deadlines, while 33% were doubtful or uncertain of the accuracy of their numbers. In a field that’s all about accuracy, it’s alarming to see a third of accountants “doubtful.”
From what we’re seeing, these pressures lead to inconsistent output and added stress for all involved. Recently, FloQast Accounting Operations Evangelist Stevan van Duyvendijk hosted a webinar taking a look at the results of the study with former financial controllers Hugh O’Neill of FloQast and Raheel Zafar, now Customer Success Manager at ACCA. Here are four key takeaways.
Accounting Teams Are Short on Resources
Many Controllers and Finance Directors find themselves operating with a budget that just doesn’t stretch far enough. While the work they do is crucial for the entire company, it may not always be seen that way, leading to being under-resourced.
“Because we’re not revenue-generating, or we’re not seen as revenue-generating, then it’s just, “Why are you spending money,” Hugh noted. “If you think about it, the sales team has Salesforce, the project management team has all their fancy dashboards and agile methodology, and what do we have? We’re stuck in the corner with an Excel sheet, which is essentially a digital pen and paper, and we’re just told to get on with it.”
And the truth is, budgetary constraints are genuine limitations for accounting teams. When you don’t have the budget, you can’t afford to hire enough staff, and it’s doubtful that you’ll be able to afford the right tech stack. That double-whammy leaves teams doing more manual, cumbersome work with fewer bodies. And on top of that…
Deadlines and Regulatory Pressure Limit Operational Excellence
With diminished resources, hitting deadlines has become more and more challenging. The team is expected to do more with less — while also supporting the rest of the company — and still make the monthly Close go off without a hitch. I checked in with a few of the accountants here at FloQast, and they confirmed the math: Sometimes, it just isn’t possible.
Remember that 41% of survey respondents who struggled with meeting deadlines? The exact number also reported tightening deadlines, while a third said they have increasingly complex compliance requirements. Many requirements are still in flux after Brexit, and teams that are already stretched thin find themselves juggling new processes and procedures.
Many accountants find themselves between a rock and a hard place with tighter deadlines and more complex demands. Something’s got to give. And sadly, that something is often the quality and accuracy of work that is, by necessity, done in a hurry.
Fortunately, the accounting department’s mix of wily veterans and fresh-faced young prodigies can handle almost any challenge. Of course, that’s not always the case, because…
87% of Companies Lost Staff to Stress and Burnout
Increasing pressure and stress haven’t just made the job harder, they’ve also made a lot of people leave the job entirely (with some anecdotal evidence that many have become yoga instructors). And while we can joke amongst ourselves about the challenges of the accounting field, stress and burnout are serious issues that impact not only retention but also mental health and well-being. When your job is causing distress, you can’t always keep calm and carry on.
“It’s probably one of the reasons why I’m not an accountant anymore, to be honest with you,” admitted Raheel. “I see a lot in my clients as well: I have got quite a few big publicly-traded companies, and they just can’t cope with the stress of completing a month-end in a week. It’s becoming more and more of a pressure cooker, and staff turnover is a real thing that should concern businesses.”
While many accountants are reevaluating their career path, and others are hitting retirement age, there’s also a decrease in new accounting graduates and people entering the field. Nearly half of survey respondents say they don’t think accounting is an attractive career path for recent grads anymore.
With increasing turnover and fewer new candidates to choose from, it can be difficult to find the right fit for your team. And, regardless of fit, new staff needing to be trained on ever-changing requirements will always require a specific learning curve that cuts into productivity. A lot of your time and energy is spent on training and oversight. And if your team is distributed, you should know…
Remote and Hybrid Teams Feel the Pressure Even More Than the Average
While all of this adds to a difficult situation for any team, it’s had an even bigger impact on remote teams. When it’s time to close the books, 70% report that they’re under a lot of stress, but this number is even higher, at 75%, for remote teams. And this makes perfect sense: When teams are operating remotely, the Close requires close coordination and communication. You can’t just walk to the next cubicle to ask a question or check a number. And remote teams without budgets to allocate to tech are less likely to have a tool like FloQast to help them streamline the Close and communicate with distributed team members to make it easier.
This is a complex issue, and there’s no one simple answer. At FloQast, we believe that the right tools make a huge difference, and users are apt to agree. Streamlining your Close processes and speeding up the Close can take a lot of pressure off the team, reducing the need for manual work and redundant communication. It can also make it much easier to work together remotely. In other words, technology takes the pressure off the people and processes, enabling teams to do more with less and close the books faster.