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rising at firms with more than $5 billion in revenue. ... Discussion and Analysis ...... However, further analysis of the data shows most companies are struggling to ...
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2017

BENCHMARKING THE ACCOUNTING & FINANCE FUNCTION

TABLE OF CONTENTS 3 Executive Summary 6 Workforce Management 19 Accounting Operations 27 Financial Systems 34 Outsourcing 38 Internal Controls and Compliance 45 Putting the Data to Work 46 Acknowledgments 47 Research Methodology and Respondent Demographics 52 About the Authors 53 About Robert Half and Financial Executives Research Foundation

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Executive Summary

EXECUTIVE SUMMARY

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

Accounting and finance leaders are under constant pressure to manage a growing portfolio of demands. But how do they, or can they, measure success? Many internal key performance indicators can be used to gauge progress in various areas. But at some point, leaders can also benefit from asking the simple question, “How are other companies doing this?” No matter how well your department feels it manages its operations, no organization can — or should — exist in a vacuum. That’s why Robert Half has teamed with Financial Executives Research Foundation (FERF) to produce Benchmarking the Accounting & Finance Function 2017. The report, now in its eighth year, is based on survey responses from more than 1,400 financial leaders at public and private organizations in the United States and Canada. It also includes insights from followup interviews with select financial executives.

we found many accounting and finance organizations are still facing the same challenges — especially around recruiting and retaining skilled talent for their teams. As a result, we are once again beginning with a discussion of workforce management trends. We then report on how companies and their finance leaders are handling the everyday operations of the accounting and finance function. Topic areas include trends in outsourcing, cloud technology adoption, automation and the burden of compliance demands. In addition, we’ve highlighted comparisons between the new data and previous years’ data and noted any trends or significant differences.

About the Authors

About Robert Half and Financial Executives Research Foundation

In our previous report, the theme centered on resources: how to secure and keep the employees, processes and technology you need now and in the future. This year,

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Executive Summary

Report Highlights

Workforce Management

We present our key findings in each section of the report. Of these, we’d like to highlight several we found particularly interesting:

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

• Sixty-two percent of the largest organizations in our survey (those with more than US$5 billion in revenue) report that their accounting and finance teams are at least somewhat understaffed.

• The finance function — and, in many cases, its certifying officers who must sign the internal control report — is the most likely organizational component to have primary responsibility for the overall effectiveness of internal control over financial reporting. However, at the largest companies, there appears to be a shift away from certifying officers and toward the audit committee.

• For the first time in four years, the percentage of staff resources devoted to general accounting is unchanged. From 2014 to 2016, we observed a significant decline in this percentage, from 23 percent to 16 percent. The percentage held steady in this year’s survey. • The number of active general ledger (GL) accounts is rising at firms with more than $5 billion in revenue. In the 2016 survey, only 9 percent of these companies had more than 10,000 active GL accounts. This year, it is nearly double that number, at 17 percent. • Acceptance of cloud-based solutions in the finance function continues to rise. Seventy-two percent of U.S. respondents said they are either using cloud-based solutions or plan to do so in the future, compared to 62 percent in 2016.

FPO

• Tax and payroll remain the two most commonly outsourced functions among U.S. and Canadian companies, although the percentage of companies outsourcing these functions has declined from 2016 levels.

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Executive Summary

How​to Use This Report Benchmarking the Accounting & Finance Function 2017 is divided into five sections representing key topic areas:

Workforce Management

• Workforce Management

Accounting Operations

• Accounting Operations Financial Systems

Within each category are: • Key Findings: An overview of trends identified in the survey and in follow-up interviews with executives • Discussion and Analysis: Summaries of survey results, with charts and tables

• Financial Systems • Points of View: Executive interviews • Outsourcing

Outsourcing

• Internal Controls and Compliance

• Takeaways: Summary of key insights from data and executives

Internal Controls and Compliance

Putting the Data to Work

You will also find tables referring to the top and bottom quartile, as well as the median. These quartiles and the median represent the three points that divide the total response rate for a given question into four groups. Each group represents a fourth of the sample group. Therefore, a response or value that is equal to or above the top quartile figure would be considered in the top or upper quartile.1

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

1

Due to response rate variation (not every respondent answered every question) and rounding, totals may not equal 100 percent.

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Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

WORKFORCE MANAGEMENT Key Data Findings

Discussion and Analysis

• Sixty-two percent of the largest organizations report that their accounting and finance teams are at least somewhat understaffed, due in part to challenges in finding skilled talent, as well as baby boomer retirements.

DROPS IN STAFF SIZES DUE IN PART TO TIGHT TALENT MARKET

• For the first time in four years, the percentage of staff resources devoted to general accounting is unchanged. From 2014 to 2016, we observed a significant decline in this percentage, from 23 percent to 16 percent. That percentage stayed at 16 percent in this year’s study. • After holding steady at 2 percent in our 2015 and 2016 surveys, Canadian businesses now report the cost of internal accounting and finance staff as a percentage of revenue has increased to 2.65 percent.

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

• More than one-quarter of U.S. firms use temporary or project professionals to assist with their accounting and finance functions, compared to nearly a third of Canadian businesses. • U.S. and Canadian businesses that engage interim staff assign these professionals primarily to three functional areas: accounts payable (A/P), accounts receivable (A/R) and general accounting.

The median number of internal accounting and finance function employees, up to and including the CFO, varies widely according to company size (see Fig. 1 on Page 7): The median number for the smallest firms (less than $25 million in revenue) is three, compared to a median of 95 at the largest companies. In general, the median employee number for all firms either stayed the same or went down from 2016. The median of 95 at the largest firms, mentioned above, was a dramatic drop: In 2016, the median for these companies was 236. Businesses in the $1 billion to $4.9 billion revenue range have also seen a sizable reduction in median staff size over the past year — dropping from 84 employees in 2016 to 40 in this year’s survey. Some of this drop-off in staff size may not be intentional. Many respondents at larger firms in North America believe their teams are not adequately staffed (see Fig. 7 on Page 12). This finding may be attributable, in part, to the tight market for skilled accounting and finance talent. Businesses in the United States and Canada are also facing a growing wave of baby boomer retirements.

• U.S. managers work an average of 47 hours per week, and nonmanagement staff work 41 hours per week. In Canada, managers work 45 hours on average, while staff-level employees work 39 hours.

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Executive Summary

FIGURE 1: Number of Internal Accounting and Finance Function Staff, by Company Size and Location (by quartile) Less than $25M

Workforce Management

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

5

10

15

17

38

United States

3

Canada

Bottom quartile

2

4

Median

3

7

15

32

40

95

6

8

Top quartile

5

10

27

65

110

325

12

20

Accounting Operations

Financial Systems

Outsourcing

Another factor contributing to these declines is automation. The reduction in manual processes and increase in efficiency are helping companies do more with fewer resources. As discussed in the Financial Systems section on Page 27, many larger organizations have made a shift to the cloud over the past year — and more plan to make the move soon.

GENERAL ACCOUNTING STAFF GROWTH SLOWS Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

For the first time in four years, we have observed neither growth nor decline in the percentage of financial staff resources devoted to general accounting. Respondents to our 2017 survey report that 16 percent of their accounting and finance staff are assigned to this functional area (see Fig. 2 on Page 8).

Other businesses may simply be unable to find the talent they need to handle general accounting duties or have decided it is more cost-effective not to fill certain roles with full-time employees. As discussed later in this section, many firms rely on interim staff to assist core teams as workloads rise and fall. A/P, A/R and financial reporting are the other functional areas with the highest allocation of staff resources (see Fig. 2 on Page 8). The percentages for these and other functional areas we track were essentially unchanged from our previous survey. Businesses often engage interim employees for these responsibilities, as well, particularly for A/P and A/R, as explained later in this section.

The unchanged figure this year suggests many companies have reached a point where they cannot or do not want to automate more tasks, and they know which tasks they should keep manual. They have been streamlining staff the past few years as they have automated more general accounting tasks, and perhaps many have found the right balance between the technology and human resources needed to manage these fundamental financial assignments.

About Robert Half and Financial Executives Research Foundation

7

Executive Summary

FIGURE 2: ALLOCATION OF ACCOUNTING AND FINANCE STAFF Workforce Management 16%  A/P 1%  International accounting

Accounting Operations

16%  General accounting

1%  Internal controls 3%  Treasury

Financial Systems

13%  A/R

3%  Tax 4%  Other

Outsourcing

4%  Credit and collections Internal Controls and Compliance

11%  Financial reporting

9%  Budgets and analysis

4%  Cost accounting 7%  Finance

8%  Payroll

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

The median employment-related cost — defined as base salary, bonuses and benefits — of internal financial staff as a percentage of revenue held steady at 2 percent for the third consecutive year in the United States. For the first time in three years, Canadian firms saw an increase, from 2 percent to 2.65 percent (see Fig. 3 on Page 9). Most companies in our survey reported a reduction in costs compared to 2016, however. Of particular note is a trend among the largest companies: After seeing their costs rise sharply, to 5 percent in 2016 from 1.10 percent in 2015,2 these organizations now report the cost of their internal accounting and finance staff represents 2 percent of revenue. Here again, technology efficiencies are a likely reason for many of these organizations experiencing a decline in costs; use of interim professionals may also be helping some firms to reduce expenses.

About the Authors

About Robert Half and Financial Executives Research Foundation

2

Note: The 5 percent figure in the 2016 survey may have been an outlier due to sample size.

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Executive Summary

Workforce Management

Accounting Operations

Financial Systems

FIGURE 3: Cost of Internal Accounting and Finance Function Staff as a Percentage of Revenue, by Company Size and Location (by quartile) Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

Bottom quartile

1.00%

1.00%

0.49%

0.69%

0.80%

0.81%

0.80%

1.48%

Median

3.00%

2.00%

1.00%

1.00%

3.00%

2.00%

2.00%

2.65%

Top quartile

6.50%

5.00%

2.00%

3.25%

3.00%

3.38%

6.00%

5.00%

The percentage of U.S. companies that rely on temporary or project professionals to assist with their accounting and finance functions was unchanged from last year: 28 percent. (See Fig. 4.) Canadian businesses reported an increase in their use of interim staff, rising from nearly one-quarter (24 percent) last year to 32 percent in this year’s results (Fig. 4).

Outsourcing FIGURE 4: Use of Temporary or Project Professionals, by Company Size and Location Internal Controls and Compliance

Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

Yes

22%

26%

35%

41%

57%

62%

28%

32%

No

78%

74%

65%

59%

43%

38%

72%

68%

Putting the Data to Work

Acknowledgments

As in our past benchmarking studies, this year’s findings show larger organizations — especially those with $500 million or more in annual revenue — tend to rely more heavily on the use of temporary or project professionals than do smaller firms (Fig. 4).

Research Methodology and Respondent Demographics

However, the percentage of the workforce represented by interim professionals is highest at the smaller companies (see Fig. 5 on Page 10). Firms with less than $99 million in revenue report temporary, contract or project professionals represent about one-tenth of their accounting and finance staff (median figure).

About the Authors

About Robert Half and Financial Executives Research Foundation

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Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

FIGURE 5: Percentage of Accounting and Finance Function Staff Who Are Temporary, Contract or Project Professionals, by Company Size and Location, by quartile Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

5%

5%

3%

3%

2%

1%

4%

5%

Median

11%

10%

5%

5%

8%

5%

8%

9%

Top quartile

23%

15%

7%

9%

10%

5%

15%

10%

Bottom quartile

To better understand how accounting and finance organizations are using interim employees to support their core teams, respondents identified which areas in the function are typically filled by temporary, contract or project professionals (see Fig. 6 on Page 11). This question is new to our annual benchmarking survey. Businesses across North America typically need the most support from interim employees in three functional areas: A/P (24 percent), general accounting (18 percent) and A/R (14 percent). Many businesses also tap interim professionals to assist with payroll (8 percent) and tax (7 percent) — two areas that are commonly outsourced. (For more on outsourcing trends, see the Outsourcing section on Page 34.) Also of note: Seven percent of respondents in our latest survey selected “other.” This suggests many firms may look to interim professionals to assist with special initiatives designed to add value to the business, such as business intelligence and other data analytics-related projects, that core staff cannot devote the time to or lack the appropriate skills to manage.

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

10

Executive Summary

Workforce Management

Accounting Operations

FIGURE 6: ACCOUNTING AND FINANCE FUNCTIONS FILLED BY TEMPORARY OR PROJECT PROFESSIONALS 24%  A/P 1%  Treasury

Financial Systems

2%  International accounting 2%  Finance

Outsourcing

14%  A/R

2%  Cost accounting 3%  Internal controls

Internal Controls and Compliance

18%  General accounting

4%  Credit and collections

8%  Payroll

7%  Tax

4%  Budgets and analysis Putting the Data to Work

5%  Financial reporting

7%  Other

Acknowledgments

As for general staffing trends, significant percentages of respondents in both countries said their teams are somewhat understaffed (see Fig. 7 on Page 12). (This examination of staffing levels is also new to our survey.)

Research Methodology and Respondent Demographics

One-third of the smallest companies (less than $25 million in revenue) are unsatisfied with their staffing levels, while 62 percent of respondents at the largest organizations (those with more than $5 billion in revenue) indicate their accounting and finance teams are at least somewhat understaffed.

About the Authors

About Robert Half and Financial Executives Research Foundation

11

Executive Summary

FIGURE 7: How Accounting and Finance Departments Are Staffed, by Company Size and Location Less than $25M

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Somewhat overstaffed

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

5%

7%

4%

14%

3%

8%

6%

6%

Adequately staffed

61%

54%

51%

51%

51%

31%

55%

64%

Somewhat understaffed

31%

36%

42%

27%

43%

54%

36%

29%

2%

4%

2%

8%

3%

8%

3%

2%

Severely understaffed

Our research for the 2017 benchmarking survey suggests accounting and finance managers at companies in the United States and Canada are working more hours this year than they did in 2016. U.S. accounting and finance managers work an average of 47 hours per week, up from 46 hours last year (see Fig. 8). In Canada, both the average and median work hours increased significantly from 2016. The uptick in work hours for Canadian accounting and finance managers follows a decrease observed in our 2016 survey. For example, managers were working 43 hours last year, down from 44 in 2015. Now, they are devoting 45 hours a week to their jobs, on average. Meanwhile, standard work hours, both average and median, for nonmanagement staff in the United States and Canada are relatively unchanged from 2016 (see Fig. 8). The average number of weekly work hours for nonmanagement employees in Canada decreased slightly year-over-year, from 40 hours to 39 hours.

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

FIGURE 8: STANDARD WEEKLY HOURS WORKED BY MANAGEMENT 47

45

45

BY NONMANAGEMENT 45

41

39

40

40 United States

About the Authors

About Robert Half and Financial Executives Research Foundation

Canada Average

Median

Average

Median

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Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

Points of View: Companies Must Be Prepared to Help New Hires Succeed In our interviews with financial executives in the United States and Canada, we learned many accounting and finance departments — across businesses of all sizes — have difficulty recruiting and retaining skilled talent. This has been an ongoing theme in our surveys over the past eight years. “Finding and retaining great employees are among our greatest challenges,” said Bobie Froman, controller of Phil Long Dealerships LLC, an automotive dealership group based in Colorado Springs, Colo. “You’re only as good as the staff you have, and honestly, we struggle to find real ‘rock star’ employees for our accounting department.”

“Finance has changed. We used to do data entry work. You’d learn how to run your systems to make sure the entries were properly posted. That’s all automated today. Now, people need to know how to extract the data and provide insight. It’s a completely different mindset for accountants who are used to putting data into systems, not pulling it out.” — Louis Marcotte CFO Intact Financial Corp.

She added, “It’s also hard to find skilled employees who want to work their way up. Some candidates believe they are going to walk into an office manager job without taking time to learn each of the jobs in our department.”

Even when they identify promising candidates who are ready to work hard and take a more traditional path up the ladder, financial leaders often must be prepared to provide training to those workers to ensure they will succeed.

Setting expectations and outlining potential growth opportunities during the interview process are critical steps toward ensuring the right fit — for both the candidate and the business, according to Froman. “We explain that there are many ways to grow at the company because our business has many facets. If someone is a fast learner and a great position opens, that person might be able to move into that role quickly. However, we can’t give them an actual timetable for advancement.”

Frank Stempin, CFO of Multi-Flow Industries LLC, Huntingdon Valley, Pa., said he sees many up-andcoming accounting and finance professionals today lacking practical experience. “They need to understand the analytical aspects of finance,” he explained. “What they are learning in school is not what is needed in the workforce. Helping them to learn the fundamentals — like A/P, A/R and cash application — while on the job can be at least a two-year investment.”

About Robert Half and Financial Executives Research Foundation

13

Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

THE NEED FOR ADVANCED SKILLS Some financial leaders would like to find a way to accelerate training so they are better prepared to address unexpected skills gaps on their teams — especially in more technical areas. “Let’s just say, if my senior financial analyst leaves right now, it would be quite a challenge to find someone to fit that role,” said Aileen Campbell, CFO of commercial and residential real estate developer Landrex Inc., based in St. Albert, Alberta, Canada. “That’s because new graduates often don’t know how to use or are not familiar with the systems that we have. As a result, we have to spend a lot of time and money on training.”

never able to fully realize any process improvement or value from what we are doing. It’s more about survival, and I think we’ve been in survival mode for a while now.”

RETENTION STRATEGIES Given the investment required to equip accounting and finance employees with the necessary skills and knowledge, it’s not surprising that many of the finance leaders we spoke with said they are focusing more effort on retention these days.

“Finance has changed,” said Louis Marcotte, CFO, Intact Financial Corp., Toronto. “We used to do data entry work. You’d learn how to run your systems to make sure the entries were properly posted. That’s all automated today. Now, people need to know how to extract the data and provide insight. It’s a completely different mindset for accountants who are used to putting data into systems, not pulling it out.” Some respondents are worried about not having skilled professionals at the ready to address a potential loss of existing and hard-to-replace talent. Others lament they don’t have enough skilled talent on hand to meet rapidly and constantly changing business demands. This is a challenge especially for lean accounting and finance teams like the one at Tucows, an internet services and telecommunications company in Toronto. “We’re finding it increasingly difficult to have the right skill sets in place to meet the ever-increasing complexity of our business,” said Dave Singh, CFO for Tucows. “When something unusual comes up, like an acquisition or an integration, it displaces other work. So, we are

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Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

“We are very concerned about retention,” said Dave Sackett, senior director of finance and administration, ULVAC Technologies Inc., Methuen, Mass., a public manufacturing and distribution company. “I take time to sit down with new employees to review what they want to do at the company this year and beyond — really help them to plan their career at the company. I want to understand how they see their future here and what they want to get back from the organization.” Providing employees with a chance to work on special projects or pursue other types of professional development opportunities is a key retention strategy for many of the financial leaders we interviewed. Bill Velasco, director of finance and global controller for Flowserve Corporation, Dallas County, Texas, is one of them. He said, “I try to expose people to new things. I might have them work on special projects that involve complex transactions or that allow them to travel to other parts of the world and experience new cultures. These experiences impact their development and help position them for growth within the company.”

“We always worry about losing good employees,” said Chris Adams, vice president of finance for Canfield & Tack, a commercial printer in Rochester, N.Y. He notes that workloads often fluctuate in the printing industry, so it’s important for his organization to ensure employees always feel engaged, especially during slower periods. “We want to implement more training this year and focus on education,” he said. “We want to give our employees opportunities to learn about areas that interest them, and help support them if they want to go back to school.” Adams said he is also a “big proponent of cross-training,” not only for retention but also for succession planning. Even though the best retention strategies can’t prevent every good accounting and finance employee from moving on, it’s important to make the investment, according to a vice president of finance at a consumer goods company based in New Jersey. “I think about the superiors and mentors I’ve had. They made sure I had work that was challenging and would help me move up the ladder,” he said. “I do the same for my people. You really just have to do the right thing, in my opinion.”

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

15

Executive Summary

Be Sure to Invest in Millennials — the Next Generation of Finance Leaders Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Millennials are the largest generation in today’s workforce, and many are working in management positions already. However, according to a recent report from Robert Half, FERF and author Michael S. Seaver — Creating a Leadership Pipeline: Developing the Millennial Generation Into Finance Leaders — some finance leaders “have trouble seeing this generation as the executives of tomorrow.” The report suggests some finance executives may initially overlook millennials as a solution to a looming leadership shortage because they don’t see these workers taking a traditional path to senior-level roles (that is, a path similar to one they followed when they entered the profession). But the report also offers this insight to finance executives: The secret to grooming tomorrow’s leaders is to not confine these professionals to traditional career paths or ways of working. So, what do millennials want? The report says a customized work environment and personalized careers are two must-haves for professionals in this demographic group, which includes Generation Y and Generation Z (those born roughly between 1980 and 2000). A “one-size-fits-all culture” is not likely to inspire millennial workers to contribute their talents to an employer. How can finance leaders foster the type of workplace environment that will nurture millennial talent and promote the knowledge transfer necessary to prepare this next generation of leaders for tomorrow’s challenges? A few suggestions, based on research and guidance from the report: • Promote work-life balance.

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

• Provide 360-degree feedback. • Focus on education. • Create a mentoring program. For additional tips and insights, download the Creating a Leadership Pipeline: Developing the Millennial Generation Into Finance Leaders report at: https://www.roberthalf.com/workplace-research/millennial-finance-leaders.

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16

Executive Summary

Workforce Management

Research Suggests Finance Leaders Should Closely Monitor Employees’ Job Satisfaction and Stress Levels IT’S TIME WE ALL WORK HAPPY®, a first-of-its-kind study on workplace happiness, suggests that professionals who work in the fields of accounting, finance and financial services have lower levels of workplace happiness compared to employees in other industries.

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Robert Half partnered with London-based Happiness Works to conduct the research, and the happiness levels of more than 12,000 working professionals across the United States and Canada were measured. Several leading experts on workplace happiness also contributed to the research. The good news for employers is that the research found most professionals are happy at work, in general. On a happiness scale of 0-100, they score 71. However, some specific groups of workers fall below that mark — including accounting, financial services and finance professionals. In fact, the latter group ranked last among all occupations surveyed for on-the-job happiness. Finance professionals also have the lowest level of interest in their work, according to the IT’S TIME WE ALL WORK HAPPY® study. Accounting and financial services professionals had low rankings in these areas, as well, compared to fields such as marketing and creative, legal and technology. They also tend to have higher stress levels than some of the other groups featured in the study. However, a bright spot for finance professionals is that they have the lowest stress levels at work, behind those in technology. Here are some other findings from the study for finance leaders to note:

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

• Accounting professionals report that they want to feel appreciated for the work they do. • Finance professionals say they want to have a sense of accomplishment from their work. • Financial services professionals report that having pride in their organization is their top driver for workplace happiness. To download the IT’S TIME WE ALL WORK HAPPY® report, visit the Robert Half website: www.roberthalf.com/its-time-we-all-work-happy.

About Robert Half and Financial Executives Research Foundation

17

Executive Summary

Takeaways Workforce Management

Accounting Operations

Financial Systems

Outsourcing

opportunities and special projects that will help to keep them engaged.

• Recruiting skilled professionals remains challenging in an environment of low unemployment for accounting and finance professionals. Companies must be prepared to invest in at least some additional training for most new hires — including, potentially, fundamental areas of accounting and finance.

• Some financial leaders are worried about their ability to address unexpected skills gaps in their department, especially in technical areas like financial analysis.

• To retain top talent, financial leaders are taking more time to understand what their employees want from their careers — and from the company. They are also making the point to connect their best people with professional development

• Businesses continue to use interim staff and project professionals to supply specialized skills. Temporary professionals are also brought in to provide support to core teams when workload demands spike.

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

18

Executive Summary

Workforce Management

Accounting Operations

Financial Systems

ACCOUNTING OPERATIONS Key Data Findings

Discussion and Analysis

• Most companies, except for large firms with $5 billion or more in revenue, will be investing more in budgets and analysis this year. The largest firms are focusing most of their investment on finance.

AREAS OF INVESTMENT

• The number of active general ledger (GL) accounts is rising at firms with more than $5 billion in revenue. In the 2016 survey, only 9 percent of these companies had more than 10,000 active GL accounts. This year, it is 17 percent.

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

• Well over half of U.S. companies (58 percent) and nearly two-thirds of Canadian firms (66 percent) rely on manual reconciliation of accounts. The percentage of Canadian companies reconciling accounts manually increased 11 points from our 2016 survey. • Despite heavy reliance on manual processes for account reconciliation, U.S. and Canadian companies are closing their books in less time — shaving two and three days off the process, respectively, since 2016.

We asked survey respondents to identify areas in the accounting and finance function where they will invest most heavily this year. We learned companies of all sizes — except for the very largest ($5 billion or more in revenue) — will be channeling most of their investment into budgets and analysis (see Fig. 9 on Page 20). More Canadian companies than U.S. firms will be focusing on this type of investment — 30 percent compared to 23 percent, respectively. Nearly one-quarter (23 percent) of respondents at the largest companies said finance — including special projects related to that key area — would receive the most investment this year. A/P, financial reporting and international accounting are other key areas likely to receive more investment at these firms in 2017.

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

19

Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

FIGURE 9: Accounting and Finance Function Key Areas of Investment, by Company Size and Location Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

A/P

5%

6%

8%

3%

6%

15%

6%

5%

A/R

6%

3%

6%

0%

0%

0%

5%

2%

Budgets and analysis

19%

28%

24%

23%

31%

8%

23%

30%

Cost accounting

12%

16%

9%

14%

14%

0%

12%

17%

Credit and collections

5%

3%

3%

6%

3%

0%

4%

6%

Finance

3%

3%

3%

3%

0%

23%

3%

3%

Financial reporting

16%

14%

12%

14%

9%

15%

14%

19%

General accounting

13%

11%

13%

14%

14%

0%

13%

8%

Internal audit

2%

3%

2%

0%

6%

8%

2%

3%

International accounting

0%

0%

2%

3%

0%

15%

1%

0%

Payroll

3%

4%

5%

0%

3%

0%

4%

0%

Tax

5%

2%

4%

3%

3%

8%

3%

6%

Treasury

0%

1%

1%

0%

3%

0%

1%

0%

11%

7%

10%

17%

9%

8%

10%

2%

Other

GENERAL LEDGER ACCOUNTS Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

Since 2014, we had seen a steady downward trend in the number of general ledger (GL) accounts, though this trend appears to be reversing. The largest percentages of companies in both the United States and Canada said they have between 100 and 500 general ledger accounts (see Fig. 10 on Page 21). Following are some specific findings by company revenue size: • Eighty-eight percent of smaller companies (those with less than $25 million in revenue) have fewer than 500 active GL accounts. This trend is in line with findings for the 2015 and 2016 surveys. • While the largest percentage of companies with $5 billion or more in revenue report having between 100 and 500 GL accounts, the number with more than 10,000 has grown significantly. This year, 17 percent report 10,000+, compared to only 9 percent in 2016 and 6 percent in 2015.

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Executive Summary

Workforce Management

Accounting Operations

FIGURE 10: Number of Active General Ledger Accounts, by Company Size and Location Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

Less than 100

42%

20%

100–500

46%

52%

12%

6%

54%

32%

27%

0%

27%

23%

33%

33%

49%

42%

501–1,000

8%

15%

15%

29%

21%

17%

12%

19%

1,001–3,000

3%

8%

7%

9%

9%

17%

6%

9%

3,001–5,000

0%

2%

5,001–10,000

0%

1%

4%

9%

3%

8%

2%

5%

8%

12%

3%

8%

2%

2%

More than 10,000

0%

2%

1%

3%

3%

17%

1%

0%

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Among the accounting and finance executives we surveyed this year, 92 percent in the United States and 91 percent in Canada indicated their organization reconciles 500 accounts or fewer at least quarterly (see Fig. 11 on Page 22). However, further analysis of the data shows most companies are struggling to hit the 100 mark. Sixty-four percent of U.S. companies and 72 percent of Canadian companies report they are reconciling fewer than 100 accounts at least quarterly. Seventeen percent of respondents at the largest companies said their teams are reconciling more than 10,000 accounts at least quarterly — up from just 9 percent in 2016. Eight percent are reconciling between 5,001 to 10,000, compared to 0 percent in last year’s survey. We interpret this as a positive trend: Companies reconciling more on a quarterly basis than they were a year ago means they’re moving faster. This gain in efficiency probably relates to larger firms embracing automation.

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

21

Executive Summary

Workforce Management

Accounting Operations

FIGURE 11: General Ledger Accounts Reconciled at Least Quarterly, by Company Size and Location Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

Less than 100

78%

65%

46%

35%

52%

33%

64%

72%

100-500

21%

27%

44%

32%

24%

17%

28%

19%

501-1,000

1%

4%

7%

15%

15%

17%

4%

5%

1,001-3,000

0%

2%

2%

3%

6%

0%

2%

3%

3,001-5,000

0%

0%

1%

0%

0%

8%

0%

0%

5,001-10,000

0%

0%

1%

12%

3%

8%

1%

2%

More than 10,000

0%

0%

0%

3%

0%

17%

1%

0%

Financial Systems

RECONCILIATION PROCESS Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Despite the automation trend, the reconciliation process is one area that remains manual and labor-intensive in most organizations (see Fig. 12A and 12B on Page 23). Fifty-eight percent of U.S. executives said their reconciliation process is manual. Sixty-six percent of Canadian respondents said they still reconcile their accounts manually. At first blush, one would think manual reconciliation of accounts would place a burden on finance departments and take away from their ability to engage in more value-added analysis. However, many companies are meeting generally accepted benchmarks for closing the books, whether their process is mostly automated, partially manual or largely manual.

Acknowledgments

In fact, it appears many organizations are closing their books in less time (see Fig. 13 on Page 24). For example, in the 2016 survey, U.S. companies said it took 25 days on average to close their books; now, they need only 23 days. And Canadian firms, which previously needed 27 days on average to close their books, now report they require 24 days.

Research Methodology and Respondent Demographics

Canadian companies are somewhat less efficient than their U.S. counterparts in reporting financial results, however, on an annual basis. U.S. companies report they need an average of 31 working days annually for this process. Canadian organizations report they need 42 working days annually, on average.

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Executive Summary

Workforce Management

FIGURE 12A: Tool/System Used for Account Reconciliations, by Company Size and Location Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

Developed internally

19%

21%

20%

18%

21%

25%

20%

19%

Third-party software

27%

17%

16%

9%

27%

25%

22%

16%

Manually reconcile/do not use a tool or system

55%

61%

64%

74%

52%

50%

58%

66%

Accounting Operations

Financial Systems

FIGURE 12B: TOOL/SYSTEM USED FOR ACCOUNT RECONCILIATION, BY COUNTRY

Outsourcing 66% 58%

Internal Controls and Compliance

United States

Putting the Data to Work 20%

19%

Canada

22% 16%

Acknowledgments

Research Methodology and Respondent Demographics

Developed internally

Third-party software

Manually reconcile/ Do not use a tool or system

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Executive Summary

Workforce Management

FIGURE 13: WORKING DAYS IT TYPICALLY TAKES TO CLOSE THE BOOKS (AVERAGE), BY COUNTRY 23

Accounting Operations

24

Financial Systems

United States 9

10

10

8

Canada

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

Monthly

Quarterly

Annually

Points of View: Even Small Changes Can Make a Big Difference in Improving Processes Financial leaders are always looking for ways to accelerate the closing process and to produce financial statements in a timely manner. However, it is clear from our executive interviews that there is no one “magic solution” for saving time in either of these areas. A finance executive in the U.S. said many factors contributed to the accounting and finance team being able to reduce from seven to five days the time needed to close the books. “It’s been a combination of focus, improved talent, better organization and some technology improvements,” he explained. “We also looked at our process. Merging some of our legal entities really helped to reduce our time to close.” Sometimes help comes in the form of improvements in other areas of the business. Changes to manual or overly complex processes outside of the accounting and finance department, for example, can have a significant, positive effect.

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Executive Summary

Workforce Management

Accounting Operations

Financial Systems

At Multi-Flow Industries, a recent technology investment is playing an important role in supporting the finance function’s ability to produce timely financial reporting, according to Frank Stempin. “In 2015, we implemented a different system for scanning products going in and out of our buildings. Before that, our company used paper invoices. Now, we can close our sales process in three days instead of 15 days,” he said. “The business of the close, the adjustments and review have not changed — it still takes about 10 business days to do those things. But the close of sales has dramatically improved.”

HOLDING FAST TO MANUAL PROCESSES Outsourcing

Internal Controls and Compliance

As noted earlier, most of the executives we interviewed seem resigned to a manual reconciliation process for accounts. For some, the lack of time stands in the

way of shifting to more efficient processes. The latter situation is what Dave Singh and his team face at Tucows. “We have not given any thought to automation at this stage simply because we haven’t had time to think about it,” he said. In other cases, it’s a matter of not finding the right technology solution. “If somebody has a better system, then I’m more than willing to look at it,” Stempin said. “We are definitely looking at various automation tools for the account reconciliation process, but we have not found one yet that we are ready to invest in,” said Mark Schneidereit, vice president of finance and administration and IT CFO for Taiga Building Products, Burnaby, British Columbia, Canada.

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

25

Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

Some simply don’t see an urgent need to change to an automated process because the current approach is working well. “We seem to go along fine with a manual process,” said a finance executive at a U.S.-based consumer goods company. “I don’t know if we’d see much of a gain going down the automation path. We’ve not considered it yet. We may look at it, though, when we’re implementing a cloud-based ERP system at the company, probably 18 months from now.” “Our process is predominantly manual,” said Chuck Larsen, controller for mining and exploration company Ur-Energy USA, Littleton, Colo. “We don’t have plans to move to an automated process. We keep things pretty simple.”

Takeaways • Simplifying complex processes outside of the accounting and finance department can help accelerate the closing process and support timely financial reporting. • Even though manual reconciliation of accounts is resource-intensive, many finance executives are not considering automation — either because they lack the time to explore other solutions or don’t see an urgent need to change. Other executives expressed a strong eagerness to move their function to a more automated process as soon as possible.

However, several financial executives, including Dave Sackett at ULVAC Technologies, reported they have embraced automation for some parts of the account reconciliation process. “We use a mix of manual and automated processes,” he said. “We’re constantly changing our ERP system to do more automated accounting tasks.” Other executives, like Aileen Campbell at Landrex, remain hopeful her team can move to an automated process soon. “We want to automate,” she said. “We’re now looking at new computer systems that will actually do the account reconciliation automatically, including some of our consolidation workbooks.”

About the Authors

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26

Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

FINANCIAL SYSTEMS Key Data Findings

Discussion and Analysis

• Adoption of cloud-based solutions among finance leaders continues to rise: 72 percent of U.S. respondents said they are either using cloud-based solutions or plan to do so in the future, compared to 62 percent in last year’s survey.

CLOUD-BASED SYSTEMS

• Canadian businesses are much more receptive to using cloud technology than they have been in the past. Sixty-seven percent report they currently use some or only cloud-based technology or are planning to in the future — a 20-point increase from last year’s survey. • The overall percentage of respondents who use an on-premises ERP system as their primary financial system held steady from 2016. Slight increases were seen in the percentages of U.S. and Canadian companies adopting cloud-based ERP systems.

For the past several years, we have been tracking the growing use of cloud technologies for accounting and finance processes. We also have been monitoring financial executives’ level of comfort with moving those processes and sensitive data to the cloud. This year, it appears that companies and their financial leaders have both reached an important moment with cloud adoption, with most firms in the United States and Canada using at least some cloud-based solutions in the finance function. And among those that don’t yet do so, many have plans to make the move. More than half (51 percent) of U.S. respondents said they are using some or only cloud technology in the finance function, and 21 percent plan to do so in the future (see Fig. 14 on Page 28). Only 28 percent said they have no plans to adopt the technology, down from 37 percent last year and 49 percent two years ago. A similar trend is occurring in Canada. Forty percent of Canadian respondents said their business is using some or only cloud-based solutions in their finance function — up from 27 percent in last year’s survey. Slightly more than one-quarter (27 percent) said they plan to do so in the future. About one-third (32 percent) of organizations surveyed have no plans to move to the cloud, down from 55 percent just two years ago.

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Executive Summary

Workforce Management

Accounting Operations

FIGURE 14: Use of Cloud-Based Solutions for Financial Functions, by Company Size and Location Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

Use only cloud-based solutions

12%

12%

6%

9%

0%

0%

11%

5%

Use some cloud-based solutions

38%

38%

43%

30%

42%

50%

40%

35%

Do not currently use cloud-based solutions but plan to in the future

21%

20%

21%

42%

33%

17%

21%

27%

Do not currently use cloud-based solutions and do not plan to in the future

29%

30%

30%

18%

24%

33%

28%

32%

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Our interviews with financial executives from the United States and Canada shed light on current cloud trends. First, it appears many companies now view cloud-based technologies as important tools for helping resource-strapped accounting and finance teams to work more efficiently. Second, many companies are finally facing the reality they must migrate from legacy systems that are inefficient and costly to maintain or be stuck using technology that vendors will no longer support. We also found that more U.S. companies than Canadian organizations are using cloud-based solutions for their financial systems — a median of 50 percent versus 25 percent, respectively. (See Fig. 15.) FIGURE 15: Percentage of Financial Systems That Are Cloud-Based Solutions, by Company Size and Location Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

Bottom quartile

15%

20%

25%

19%

10%

18%

15%

10%

Median

50%

50%

50%

38%

20%

20%

50%

25%

100%

100%

75%

63%

30%

21%

95%

80%

Top quartile

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

28

Executive Summary

Workforce Management

Accounting Operations

Financial Systems

ERP SYSTEMS The overall percentage of respondents who report their organization uses an on-premises ERP system as their primary financial system held steady this year (see Fig. 16). Slight increases were seen in adoption of cloud-based ERP systems by both U.S. and Canadian companies. Most accounting and finance organizations in North America still rely on stand-alone accounting systems. FIGURE 16: Primary Financial System Used, by Company Size and Location Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

On-premises ERP

20%

38%

51%

39%

67%

67%

32%

42%

Cloud ERP

12%

17%

15%

12%

12%

17%

15%

13%

Stand-alone accounting system

62%

40%

31%

30%

21%

8%

48%

40%

5%

5%

2%

18%

0%

8%

5%

5%

Other

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

29

Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Companies in our survey that use ERP solutions rely on an array of well-known brands or systems, with choices often varying by company size. Similar to previous surveys, smaller companies selected “other” as their brand or system, which might indicate they use a more customized or hybrid solution, or are working with a smaller or startup provider (see Fig. 17). However, larger firms (those with $1 billion to $4.9 billion in revenue), seem to be shifting in this direction, as well. In 2016, only 17 percent selected “other” for their ERP brand or cloud ERP system, but this year, that percentage has more than doubled to 35 percent. In addition, U.S. companies indicate they are more likely than their Canadian counterparts to work with a smaller provider or to use a customized or hybrid solution. Fifty-six percent of U.S. respondents chose “other,” compared to 42 percent of Canadian businesses surveyed. FIGURE 17: Leading Brand of ERP or Cloud ERP System Used, by Company Size and Location

SAP Oracle/PeopleSoft/JD Edwards

Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

4%

8%

9%

13%

23%

38%

6%

11%

2%

9%

22%

17%

35%

38%

14%

6%

Microsoft Dynamics (AX, GP, NV, SL)

20%

21%

11%

30%

8%

8%

17%

33%

NetSuite

10%

7%

3%

4%

0%

0%

7%

6%

Financial Force

0%

1%

1%

0%

0%

0%

0%

3%

Workday

1%

1%

0%

0%

0%

8%

1%

0%

63%

54%

53%

35%

35%

8%

56%

42%

Other

BUDGETING AND LONG-RANGE PLANNING TOOLS Research Methodology and Respondent Demographics

About the Authors

Microsoft Excel remains the go-to tool for budgeting and planning. Sixty-nine percent of U.S. companies rely on Excel, up slightly from 2016 (see Fig. 18 on Page 31). And more than three-quarters (78 percent) of Canadian firms said they use Excel for their budgeting and planning tasks. Excel is used by accounting and finance professionals at organizations of all sizes, but the survey results suggest smaller companies find this tool especially valuable. These findings align with trends observed in our previous surveys.

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Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

FIGURE 18: Leading Types of Budgeting and Planning Tools Used, by Company Size and Location

Excel

Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

78%

70%

62%

54%

47%

35%

69%

78%

IBM/Cognos

1%

1%

3%

0%

5%

6%

1%

0%

Oracle/Hyperion

1%

4%

6%

5%

18%

24%

4%

2%

SAP/BPC

0%

1%

3%

13%

13%

12%

2%

3%

Internally developed/legacy tool

10%

10%

10%

15%

13%

18%

11%

8%

Other

11%

14%

17%

13%

3%

6%

13%

9%

Points of View: Cloud Computing Gaining Greater Acceptance Financial executives interviewed for this year’s benchmarking survey seem considerably more comfortable with using cloud-based solutions for their financial data than in our previous surveys. None of the executives we spoke with cited strong concerns about security, although some did note they still see some risk in moving data to the cloud.

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

“We implemented a cloud-based accounting system … and then migrated off our product that was very old and no longer being supported by the vendor. We were kind of out on a limb. If anything went wrong with the old system, we would have had no support.” — Dave Singh CFO Tucows

“I see the potential for service disruption as being a greater issue than security with the cloud,” said David S. Noymer, CFO of The Greater Boston Food Bank, a nonprofit in Massachussetts. “I’m not diminishing the importance of security, but downtime of internet and cloud services would be hugely disruptive for many companies.” Dave Sackett of ULVAC Technologies said his company is preparing to transition to the cloud soon: “I expect our accounting and finance systems will be cloud-based by next year. When the server support contracts for our on-premises software expire, we plan to move to the cloud with our existing vendor.” Simple recognition of the need to replace legacy systems is another reason more finance functions, like Tucows, have moved to the cloud. “We implemented a cloud-based accounting system … and then migrated off our product that was very old and no longer being supported by the vendor. We were kind of out on a limb. If anything went wrong with the old system, we would have had no support,” said Dave Singh.

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Executive Summary

Workforce Management

He added, “It was a very old and unwieldy system and not very scalable anyway. The new system is much more flexible and dimension-based, and gives us a much better foundation for the future.”

COMPLIANCE EFFICIENCIES Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

Compliance demands, like the new revenue recognition standard, have prompted at least one of the financial executives we interviewed to explore the use of new cloud platforms. “We are testing a tool that we can use to evaluate contracts, document conclusions and store documents,” said Bill Velasco of Flowserve Corp. “It’s a document management system, but we are using it for our implementation of the revenue recognition standard. Our vendor has customized it so we can use it to evaluate contracts through four of the five steps required by the new standard.”

BUSINESS INTELLIGENCE Some financial leaders look to gain new data insights from cloud solutions. A CFO at a food manufacturing company in Concord, Ontario, Canada, reported he is spearheading an effort to implement a cloudbased business intelligence technology that will help the organization perform analyses to improve its product management.

However, even this forward-thinking executive did not seem overly enthusiastic about expanding the use of cloud technology. “I don’t see the cloud offering me much more,” he said. “But because more and more new technology products are being provided through the cloud, I view moving to the cloud as more of a necessity than a preference.” A few executives seem prepared to hold back on expanding their use of cloud-based solutions in the finance function, at least for the short term. “Our company has a cloud-based customer relationship management system,” said Aileen Campbell of Landrex. “Our sales and inventory are also in the cloud, and last year we fully integrated sales into our accounting system. So, I think we’re very satisfied with what we have right now. Any future expansion into the cloud will be done, maybe, in the next three years.” Added Mark Schneidereit of Taiga Building Products, “Our ERP vendor has a cloud-based option, and we look at it every so often. However, at this point, it would be more of an expense for us than just hosting it locally.”

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32

Executive Summary

Takeaways Workforce Management

Accounting Operations

Financial Systems

Outsourcing

• Financial executives, in general, do not seem as concerned about moving sensitive financial or customer data to the cloud as they once were. This is not to say they don’t see risk; however, the cloud industry has matured enough that many businesses are feeling more confident about using these technologies. • Many financial functions are adopting cloud-based solutions because they need to transition away from costly and inflexible legacy systems. In many cases, they are being “forced” to implement cloud technology because their vendors are no longer

supporting older systems and are expanding their cloud offerings. • Compliance efficiencies and the ability to extract business intelligence from data are examples of benefits some finance leaders hope to gain from cloud-based tools. • Excel is still widely used by companies of all sizes for budgeting, planning and analysis. Smaller companies appear to find this tool especially valuable.

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

33

Executive Summary

Workforce Management

OUTSOURCING Key Data Findings

Discussion and Analysis

• Tax and payroll continue to be the two most commonly outsourced accounting and finance functions among U.S. and Canadian companies.

Outsourcing practices are evolving. For years, tax and payroll have been two functions that businesses have commonly outsourced.

• Companies of all sizes see benefits to outsourcing payroll. For smaller companies, lack of internal staff or expertise is often the driver. For larger companies, the complexity of performing payroll in multiple countries and tax jurisdictions is often a key factor in the decision to outsource payroll.

In the 2016 survey, for example, 39 percent of U.S. respondents said their companies outsourced payroll. This year, only 26 percent said they outsource this function (see Fig. 19 on Page 35). Similarly, 22 percent of Canadian companies surveyed for our 2017 study said their business outsources payroll tasks, compared to 37 percent in 2016.

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

• Most U.S. companies (91 percent) reported their shared services centers (of which accounting and finance are often a part) are in the United States. Canadian companies have been expanding their use of shared services centers in Europe, the Middle East and Africa (EMEA), and the Asia-Pacific region.

There were similar declines in the percentages of companies outsourcing tax activities. Thirty-one percent of U.S. companies outsource the tax function, compared to 43 percent in the previous survey. Meanwhile, 30 percent of Canadian firms report they currently outsource tax preparation; last year, that figure was 44 percent (see Fig. 19 on Page 35).

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

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34

Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

FIGURE 19: Outsourced Functions, by Company Size and Location Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

A/P

1%

0%

1%

3%

9%

0%

1%

1%

A/R

0%

1%

1%

3%

5%

0%

1%

0%

Budgets and analysis

0%

0%

1%

0%

0%

0%

0%

0%

Cost accounting

1%

0%

0%

3%

0%

0%

0%

0%

Credit and collections

2%

3%

2%

5%

2%

0%

2%

0%

Finance

0%

1%

0%

0%

0%

0%

0%

0%

Financial reporting

2%

1%

0%

0%

0%

0%

1%

1%

General accounting

1%

2%

1%

0%

2%

7%

1%

0%

Internal audit

3%

7%

6%

8%

9%

7%

5%

4%

International accounting

1%

2%

0%

3%

0%

7%

1%

1%

Payroll

29%

24%

22%

8%

16%

33%

26%

22%

Tax

31%

33%

29%

33%

26%

7%

31%

30%

2%

0%

3%

3%

5%

0%

2%

0%

29%

25%

36%

35%

26%

40%

28%

39%

Treasury

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

Other

Most U.S. companies that use a shared services center report the center is in the United States (see Fig. 20 on Page 36). This percentage increased slightly from 86 percent in last year’s survey. Seventy-four percent of Canadian companies with shared services centers maintain them in their home country, down from 83 percent last year. Similar to last year, 14 percent of shared services centers utilized by Canadian firms are in the United States (see Fig. 20 on Page 36). However, it appears

Canadian firms are expanding their use of shared services centers in the EMEA and Asia-Pacific regions. In last year’s survey, no Canadian companies reported using shared services centers in these areas. NOTE: Because shared services centers handle operational tasks, such as accounting, purchasing and human resources, internally in the companies where they exist, they do not represent outsourcing, which typically involves a third party, in the most common sense.

About the Authors

About Robert Half and Financial Executives Research Foundation

35

Executive Summary

Workforce Management

Accounting Operations

FIGURE 20: Locations of Internal Shared Services Centers, by Company Size and Location

U.S.

Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

85%

87%

90%

81%

61%

33%

91%

14%

Canada

7%

9%

2%

8%

9%

5%

0%

74%

South America

2%

1%

0%

0%

0%

10%

1%

0%

EMEA

2%

1%

7%

4%

13%

19%

3%

6%

Asia-Pacific

2%

2%

0%

0%

0%

19%

1%

6%

India

2%

0%

2%

8%

13%

10%

3%

0%

Mexico

1%

1%

0%

0%

4%

5%

1%

0%

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

As we noted in our previous benchmarking survey, accounting and finance functions that are managed through a shared services center are becoming more dispersed (see Fig. 21). A/P, A/R and general accounting functions are still the most prevalent, but less so than last year. FIGURE 21: Functions Within Shared Services Centers, by Company Size and Location Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

A/P

9%

11%

10%

13%

13%

10%

10%

11%

A/R

9%

10%

9%

11%

11%

8%

9%

11%

Budgets and analysis

7%

7%

8%

7%

6%

10%

7%

6%

Cost accounting

4%

5%

5%

6%

4%

5%

4%

6%

Credit and collections

5%

6%

6%

8%

7%

7%

6%

6%

Finance

7%

7%

7%

9%

5%

7%

7%

6%

Financial reporting

8%

10%

9%

9%

7%

7%

9%

9%

General accounting

9%

10%

8%

9%

9%

8%

9%

10%

Internal audit

3%

3%

4%

1%

5%

5%

3%

2%

International accounting

1%

2%

2%

1%

2%

5%

1%

3%

Payroll

7%

7%

6%

9%

7%

8%

7%

6%

Tax

5%

4%

4%

5%

5%

7%

5%

5%

Treasury

4%

6%

6%

6%

7%

8%

5%

5%

22%

15%

15%

7%

11%

5%

17%

15%

Other

36

Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

Points of View: For Many Firms, Nothing Beats Outside Expertise Payroll and tax preparation are the two business areas most likely to be outsourced by financial executives, which is consistent with our previous studies. Several executives said they have a greater level of comfort due to outsourcing these specialized and continually evolving aspects of their business. Time saving from outsourcing is also greatly valued by Dave Singh and his team at Tucows. “Our finance team is highly specialized and very lean, so we don’t have the capability to keep up with the latest and greatest tax compliance and tax provision work ourselves,” he said. “We are also happy to rely on outside experts for hedge accounting, sales tax and Sarbanes‑Oxley Act (SOX) compliance.”

CONVENIENCE, COST-EFFICIENCY AND ACCURACY Chuck Larsen of Ur-Energy said his organization outsources stock-based compensation and administration, in addition to traditional payroll functions. “We want our employees to have the ability to manage their own accounts, or their time sheets and benefits. That’s a primary reason we outsource payroll,” he said. “Employee convenience is our motivation for outsourcing our stock-based compensation. They can manage their own stock options and exercises using a captive broker.” Most financial executives also appreciate the cost‑efficiency outsourcing arrangements can provide. “We outsource our tax and payroll functions for the expertise and efficiency,” said a U.S.-based

vice president of finance. “Outsourcing is also probably the most cost-effective way for us to do these things, especially when you look at what we’re paying for these services versus hiring internal resources.” Accuracy is another important benefit of outsourcing, according to Bobie Froman of Phil Long Dealerships. “We’re kind of ‘old school’ in our processes and we like to control everything,” she said. “But there are things we don’t want to deal with, like payroll taxes and payroll itself. It’s easier to ship those functions to people who have the right knowledge — especially with the laws around payroll and accuracy.”

Takeaways • Businesses that need to access highly specialized knowledge and keep pace with frequently changing regulations, such as those for payroll and taxes, find value in outsourcing, either to shared services centers or third-party service providers. • Convenience, cost-efficiency and accuracy are some of the benefits finance leaders hope to gain by outsourcing certain functions. • Even though fewer companies reported that they are outsourcing payroll and tax, many organizations appear to be expanding their use of shared services centers and third-party service providers for other functions.

37

Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

INTERNAL CONTROLS AND COMPLIANCE Key Data Findings

Discussion and Analysis

• Finance — and, in many cases, its certifying officers who must sign the internal control report — is the organizational component most likely to have primary responsibility for the overall effectiveness of internal control over financial reporting. However, at larger companies (those with more than $5 billion in revenue), there appears to be a shift away from certifying officers and toward the audit committee.

U.S. and Canadian executives cited various functional areas as having primary responsibility for the overall effectiveness of internal control over financial reporting. These findings align with last year’s survey. The largest percentage of U.S. companies (42 percent) indicated their certifying officers (CEO and CFO) who sign the internal control report are responsible, while 39 percent of firms in Canada reported that they follow the same process (see Fig. 22 on Page 39).

• Fewer companies reported having a separate SOX project management organization (PMO) in charge of the SOX compliance management process this year, compared to 2016. However, larger organizations have significantly increased their use of PMOs for this purpose. • Most U.S. and Canadian companies report this year that they have fewer than 100 key internal controls documented in their internal control over financial reporting framework. However, the largest firms (more than $5 billion in revenue) appear to be struggling to reduce the internal controls they designate as “key.”

Notably, in the largest organizations, there has been a shift away from certifying officers who sign the internal control report and toward the audit committee. Only 9 percent of these companies reported in 2016 that their audit committee had primary responsibility for the overall effectiveness of internal control over financial reporting. This year, that figure is 36 percent (see Fig. 22 on Page 39).

• Most financial executives in the United States and Canada see the cost of their compliance requirements remaining steady this year. However, most also expect the compliance burden for their firms to increase over the next three years.3

3

This survey was conducted before the new U.S. presidential administration took office in January 2017. The new administration has stated it intends to reduce regulatory compliance mandates in the United States, and, at the time this report was being finalized, had taken steps to begin reducing regulations, notably those that impact manufacturing companies. For more on these actions, see www.whitehouse.gov/briefing-room/presidential-actions. How these actions will ultimately affect the compliance burden for U.S. or Canadian businesses remains to be seen — particularly with respect to reporting on internal control over financial reporting.

38

Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

FIGURE 22: Primarily Responsible for Overall Effectiveness of Internal Control Over Financial Reporting, by Company Size and Location Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

9%

7%

9%

19%

13%

36%

9%

15%

Certifying officers who sign the internal control report (CEO and/or CFO)

41%

41%

44%

38%

42%

18%

42%

39%

Finance function

35%

39%

36%

28%

16%

27%

35%

38%

Financial reporting

8%

8%

6%

6%

6%

0%

7%

5%

Internal audit

1%

3%

3%

6%

13%

9%

3%

0%

Other

6%

3%

3%

3%

10%

9%

5%

3%

Audit committee

Consistently across U.S. and Canadian companies — 40 percent and 55 percent, respectively — the financial reporting function is primarily responsible for executing the SOX compliance management process or similar mandates (see Fig. 23 on Page 40). Additionally, the financial reporting area is also the majority owner of the design and operating effectiveness of specific key internal controls (see Fig. 24 on Page 40), suggesting that overall responsibility for evaluating effectiveness is centralized. Such centralization requires transparency into the execution of the key controls across the organization to facilitate ongoing monitoring.

Acknowledgments

Fewer organizations reported having a separate project management organization (PMO) in charge of the SOX compliance management process this year. However, respondents at 22 percent of large firms (those with revenue of $5 billion or more) said they have a separate SOX PMO taking the lead on this process (see Fig. 23 on Page 40). This compares to 0 percent last year.

Research Methodology and Respondent Demographics

In addition, 11 percent of respondents at the largest firms said internal audit is responsible for executing SOX compliance management. Last year, no respondents reported this function was leading the process.

About the Authors

About Robert Half and Financial Executives Research Foundation

39

Executive Summary

FIGURE 23: Primarily Responsible for Executing SOX Compliance Management Process, by Company Size and Location Less than $25M

Workforce Management

Accounting Operations

Finance projects

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

1%

4%

0%

7%

0%

0%

2%

0%

Financial reporting

45%

46%

34%

21%

41%

33%

40%

55%

General accounting

26%

31%

34%

21%

18%

22%

29%

15%

Internal audit

5%

12%

23%

43%

27%

11%

14%

20%

Separate SOX PMO (Project Management Organization)

1%

0%

0%

0%

0%

22%

1%

0%

22%

7%

9%

7%

14%

11%

14%

10%

Other

Financial Systems FIGURE 24: Owns Responsibility for Design and Operating Effectiveness of Specific Key Internal Controls, by Company Size and Location Outsourcing

Internal Controls and Compliance

Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

Financial reporting

47%

43%

34%

19%

31%

27%

42%

34%

Individuals directly responsible for executing the controls

22%

22%

27%

23%

10%

27%

23%

19%

Internal audit

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

2%

5%

8%

16%

17%

0%

5%

7%

Owners of applicable business processes in which controls reside

16%

22%

24%

26%

41%

45%

20%

31%

Other

13%

8%

7%

16%

0%

0%

10%

9%

Most U.S. and Canadian companies report they have fewer than 100 key controls (see Fig. 25 on Page 41). This finding is similar to last year’s survey and indicative of the steady decrease we have observed in recent years in the number of key internal controls companies use. Many organizations have been able to streamline the number of key controls they have in place by making a concerted effort to reduce or eliminate redundancies and improve efficiencies. This, of course, is a widely accepted best practice. The largest firms, however, appear to be struggling to reduce their internal controls. In the previous survey, 11 percent of companies with $5 billion in revenue or more reported they had more than 1,000 internal controls. Since last year, that percentage has doubled to 22 percent. This trend may reflect the underlying complexities of the business and the more stringent audit requirements being driven by the Public Company Accounting Oversight Board inspections process.

40

Executive Summary

FIGURE 25: Number of Key Internal Controls Documented in Internal Control Over Financial Reporting Evaluating Framework, by Company Size and Location

Workforce Management

Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

96%

83%

78%

81%

48%

33%

84%

81%

100–250

4%

13%

16%

14%

20%

11%

10%

16%

251–500

0%

3%

3%

5%

24%

11%

3%

0%

501–1,000

0%

1%

3%

0%

8%

22%

2%

0%

1,001–2,500

1%

0%

0%

0%

0%

0%

0%

3%

More than 2,500

0%

0%

0%

0%

0%

22%

1%

0%

Less than 100

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

Most U.S. and Canadian financial executives see the cost of compliance requirements remaining steady for their firms this year, although significant percentages of these executives also anticipate rising costs (see Fig. 26 on Page 42). Smaller firms (less than $25 million in revenue) appear to be most optimistic their compliance costs will remain steady. In addition, 50 percent of the largest firms see their compliance costs staying the course in the near term (see Fig. 26 on Page 42). Last year, 73 percent of the largest firms said they anticipated rising costs. U.S. and Canadian companies both said the compliance burden is likely to increase over the next three years.4 Sixty-one percent of U.S. organizations and 56 percent of Canadian firms cited this response (see Fig. 27 on Page 42). Only 2 percent of U.S. businesses — and 0 percent from Canada — expect to see their organization’s compliance burden ease during that period.

4

“We can actually play offense instead of defense. We can do a lot more ‘red flag auditing’ — looking at things proactively that we know we will be held accountable for. So, we take a little bit more time to audit and review issues before they get to a point where they could become financially and reputationally damaging.” — Bobie Froman Controller Phil Long Dealerships LLC

Ibid.

41

Executive Summary

Workforce Management

FIGURE 26: Cost of Compliance Requirements Impact on Accounting and Finance, by Company Size and Location Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

Rising

35%

43%

48%

45%

53%

42%

40%

46%

Falling

1%

0%

1%

3%

0%

8%

1%

2%

63%

58%

51%

52%

47%

50%

59%

52%

Staying steady

Accounting Operations FIGURE 27: Compliance Burden Over the Next Three Years, by Company Size and Location Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

Increase

57%

63%

58%

64%

72%

58%

61%

56%

Decrease

3%

1%

3%

0%

0%

8%

2%

0%

41%

35%

39%

36%

28%

33%

37%

44%

Financial Systems

Outsourcing

Stay the same

Internal Controls and Compliance

Points of View: Financial Executives See Few ‘Silver Linings’ with Compliance Requirements

Putting the Data to Work

Most companies have become proficient at meeting compliance requirements, but financial executives would still like to see some relief.

“I think, by and large, we run a pretty tight ship with SOX. I also believe our Securities and Exchange Commission reporting is some of the best in the industry. I know it’s some of the most complete reporting in the industry,” he said. “And that would be the case whether we had additional regulations or reduced regulations.”

Chuck Larsen of Ur-Energy said he would like to devote more of his team to special projects, which he said would help enhance retention as well as the company’s bottom line. But there is little time for these pursuits in the current compliance environment. Larsen is also confident that if there was an easing of some regulations, it would not impact the quality of his team’s financial reporting work.

Dave Singh at Tucows has a long list of things that he would like to pursue if his finance team could worry less about meeting compliance requirements. Implementing integrations with a HR information system, expanded credit card programs for employees to pay for expenses and adding a new automated expense-reporting system to replace the current paper-heavy submission system are just three of the items on his to-do list.

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

42

Executive Summary

Workforce Management

“I would also love to build out self-serve reporting so people could see what their results are every month instead of waiting for us to produce heaps and heaps of spreadsheets,” he said. “These are all things that we could do, but we just don’t have the bandwidth.”

Accounting Operations

THE ABILITY TO PLAY OFFENSE INSTEAD OF DEFENSE

Financial Systems

Some financial executives we interviewed were quick to highlight the “silver linings” their organizations have seen emerge from their compliance initiatives.

Outsourcing

“Our company follows J-SOX,” said Dave Sackett of ULVAC Technologies. “Those requirements keep

increasing year after year. But J-SOX keeps us more organized by giving us a framework for internal control to follow. It has also provided guidance that has helped us to automate some of our workflows and approvals.” Bobie Froman at Phil Long Dealerships says established compliance processes help her team identify problems before they become major issues. “We can actually play offense instead of defense,” she said. “We can do a lot more ‘red flag auditing’ — looking at things proactively that we know we will be held accountable for. So, we take a little bit more time to audit and review issues before they get to a point where they could become financially and reputationally damaging.”

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

43

Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

TECHNOLOGY: THE KEY TO HELPING FINANCIAL TEAMS MEET FUTURE COMPLIANCE DEMANDS Most executives who responded to this year’s survey, and who we interviewed, expect their compliance burden to increase in the years ahead. However, U.S. and Canadian executives are keeping a close eye on dynamics in domestic and global markets that could impact their business — positively or negatively. Several executives we interviewed see technology as vital to keeping up with future compliance demands. David S. Noymer of The Greater Boston Food Bank said he expects he will need to invest more in technology tools, like specialized software, to help his staff stay on top of compliance related to employee benefits, including healthcare and retirement planning.

Takeaways • Compliance demands are preventing finance teams in some organizations from focusing on activities that could help the business become more efficient and grow. • Other finance teams have seen some “silver linings” from their compliance work, including better organization and efficiency, and the ability to stay on top of risks. • Technology will likely play a central role in helping organizations to meet their compliance requirements in the future.

Louis Marcotte of Intact Financial Corp. said, “One of our biggest challenges is making sure that we have sufficient technology to deal with all the compliance requirements we face, including reporting, governance and regulatory requirements.” Technology can only create so much efficiency on its own, however. It is still essential to have people with the right skills who can work with these solutions and help the business get the most value from them. “IT savvy is becoming increasingly important in the accounting and finance function,” said Mark Schneidereit of Taiga Building Products. “We constantly face the challenge of ensuring the skills of our team match the changing skills requirements in the industry.”

About Robert Half and Financial Executives Research Foundation

44

Executive Summary

PUTTING THE DATA TO WORK

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

It’s not easy to understand how well your accounting and finance function is performing without some form of measurement and comparison. Benchmarking the Accounting & Finance Function 2017 from FERF and Robert Half is intended to provide financial executives with such a point of reference. Applying benchmarks and standards helps financial executives learn more about how peer organizations use resources and are evolving their processes and practices to meet new and ongoing challenges. The findings in this report are designed to help senior financial executives to make comparisons easily and build a better understanding of how their finance function operates in relation to its peers.

From this report, financial leaders should be able to gain insight into the successes and struggles that other accounting and finance departments in North America are facing in aligning technology, knowledge, and human and financial resources to respond to changing expectations, increasing pressures, and new opportunities and risks. Areas where shortcomings appear can then be targeted for improvement.

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

45

Executive Summary

ACKNOWLEDGMENTS

Workforce Management

Financial Systems

FERF and Robert Half would like to thank the more than 1,400 finance leaders who participated in the online survey, and the many executives who spoke with the authors in follow-up interviews. Their real-world experience and comments gave us a deeper understanding and appreciation for the role of the accounting and finance departments at companies and organizations of all sizes, and of the opportunities and challenges that lie ahead. While many of these executives are acknowledged within the report, others requested anonymity, yet offered valuable insights.

Outsourcing

Financial Executives Research Foundation (FERF) gratefully acknowledges these companies for their support and generosity:

Accounting Operations

PLATINUM MAJOR GIFT | $50,000 + Internal Controls and Compliance

Exxon Mobil Corporation

Microsoft Corporation

GOLD PRESIDENT’S CIRCLE | $10,000–$14,999 Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

Cisco Systems, Inc. Dow Chemical Coompany

General Electric Co Wells Fargo & Company

SILVER PRESIDENT’S CIRCLE | $5,000–$9,999 Accenture LLP Apple, Inc. The Boeing Company Comcast Corporation Corning Incorporated Cummins Inc Dell, Inc. DuPont Eli Lilly and Company General Motors IBM Corporation Johnson & Johnson

Lockheed Martin Corp. McDonald’s Corporation Medtronic, Inc. MetLife Motorola Solutions, Inc. PepsiCo, Inc. Pfizer Inc. Procter & Gamble Co. Select Medical Tenneco Valeant Pharmaceuticals International Walmart Stores, Inc

46

Executive Summary

Workforce Management

RESEARCH METHODOLOGY AND RESPONDENT DEMOGRAPHICS

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

From October 2016 through December 2016, FERF and Robert Half conducted their eighth annual benchmarking survey of accounting and finance departments at more than 1,400 public and private companies, mainly in the United States and Canada. The data contained within this report was compiled from U.S. and Canadian responses to a 39-question online survey.

More than one-quarter (26 percent) of respondents identified themselves as CFOs. Most (89 percent) are in the United States, while 7 percent are in Canada. Two‑thirds of respondents are from private companies (66 percent), while 15 percent work at public companies. Most respondents (83 percent) said their company’s annual revenue is under $500 million.

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

47

Executive Summary

CURRENT TITLE Workforce Management

26%  Chief Financial Officer

20%  Corporate Controller

0%  Management Consultant Accounting Operations

1%  Managing Director 1%  Chief Auditor/VP of Internal Audit

Financial Systems

13%  Director title (Director of Finance,

Director of Accounting, etc.; includes those who may also be a Senior Director)

1%  General Manager 1%  Chief Accounting Officer

Outsourcing

12%  Other

4%  Business Owner, Principal or Partner 12%  Manager title (Manager of

5%  Assistant/Divisional Controller Internal Controls and Compliance

Putting the Data to Work

COMPANY HEADQUARTERS 7%  Canada

Acknowledgments

4%  Other

Research Methodology and Respondent Demographics

About the Authors

Finance, Manager of Accounting, etc.)

5%  Vice President of Finance

89%  United States

About Robert Half and Financial Executives Research Foundation

48

Executive Summary

COMPANY TYPE Workforce Management 66%  Private

17%  Nonprofit

Accounting Operations 15%  Public Financial Systems 2%  Government Outsourcing

Internal Controls and Compliance

INDUSTRY Putting the Data to Work 30%  Other 1%  Utilities Acknowledgments

1%  Telecommunications 2%  Transportation

Research Methodology and Respondent Demographics

2%  Insurance 2%  Natural Resources 2%  Media

About the Authors

2%  Government 3%  Information Technology

About Robert Half and Financial Executives Research Foundation

Services and Software

24%  Manufacturing 10%  Services 5%  Wholesale Trade 4%  Healthcare Providers 4%  Retail 3%  Banking and Investment Services 3%  Education

49

Executive Summary

ANNUAL COMPANY REVENUE Workforce Management 37%  Less than $25 million

28%  $25–$99 million

Accounting Operations 18%  $100–$499 million Financial Systems

Outsourcing

4%  $5 billion and over 6%  $500–$999 million

7%  $1–$4.9 billion

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

50

Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Number of Divisions/ Business Units

Less than $25M

$25M– $99M

$5B and over

United States

Canada

1

30%

13%

9%

2%

2–10

62%

67%

56%

42%

5%

0%

18%

11%

40%

46%

58%

64%

11–20

5%

13%

17%

25%

20%

11%

12%

13%

21–30

1%

3%

7%

13%

31–50

1%

2%

7%

6%

9%

5%

4%

3%

13%

10%

4%

6%

50 or more

0%

2%

5%

12%

14%

29%

4%

4%

Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

88%

84%

2%

5%

68%

58%

48%

38%

17%

19%

8%

5%

12%

13%

78%

78%

10%

11%

24%

38%

40%

49%

5%

4%

Less than $25M

$25M– $99M

$100M– $499M

$500M– $999M

$1B– $4.9B

$5B and over

United States

Canada

Domestic only

87%

75%

65%

59%

49%

24%

76%

65%

Domestic and international

13%

25%

36%

41%

51%

76%

24%

35%

Centralized/Decentralized Centralized Decentralized

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Both (some functions centralized; some functions decentralized)

Domestic/International

$100M– $499M

$500M– $999M

$1B– $4.9B

Due to response-rate variation (not every respondent answered every question) and rounding, totals may not equal 100 percent.

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

51

Executive Summary

ABOUT THE AUTHORS

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

Thomas Thompson, Jr.

Paul McDonald

Thomas (Tom) Thompson is a research manager at Financial Executives Research Foundation (FERF), the nonprofit research affiliate of Financial Executives International (FEI). Thompson specializes in qualitative and quantitative research methodologies, and has authored more than 60 executive reports and white papers. He earned a B.A. in economics from Rutgers University and a B.A. in psychology from Montclair State University. Prior to joining FERF, Thompson held positions in business operations and client relations at NCG Energy Solutions, AXA Equitable and Morgan Stanley Dean Witter.

Paul McDonald is senior executive director with Robert Half. Robert Half’s specialized staffing divisions place professionals on a temporary, temporary-to-hire and full-time basis in the accounting and finance, technology, office administration, legal, and creative, marketing and design fields. McDonald joined the company in 1984 as a recruiter in Boston, following a public accounting career with Price Waterhouse. In the 1990s, he became president of the Western United States, overseeing all of Robert Half’s operations, and most recently served as senior executive director of Robert Half Management Resources. Over the course of more than 30 years in the recruiting field, McDonald has spoken and written extensively on management and employment issues based on his work with thousands of client companies and job seekers.

He can be reached at 1.973.765.1007 or [email protected]

Follow Paul McDonald on Twitter @PaulCMcDonald. About the Authors

About Robert Half and Financial Executives Research Foundation

52

Executive Summary

Workforce Management

ABOUT ROBERT HALF AND FINANCIAL EXECUTIVES RESEARCH FOUNDATION

Accounting Operations

Financial Systems

Robert Half Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

Founded in 1948, Robert Half is the world’s first and largest specialized staffing firm, and has 325 staffing locations worldwide. The company’s professional staffing divisions include Accountemps®, Robert Half® Finance & Accounting, and Robert Half® Management Resources, for temporary, full-time and senior-level project professionals, respectively, in the fields of accounting and finance. Robert Half is also the parent company of Protiviti, a global consulting firm providing solutions in finance, technology, operations, data, analytics, governance, risk and internal audit. For more information about the specialized staffing and recruitment divisions of Robert Half, visit www.roberthalf.com. Robert Half is an Equal Opportunity Employer M/F/Disability/Veterans.

Financial Executives Research Foundation, Inc. Financial Executives Research Foundation (FERF) is the nonprofit 501(c)(3) research affiliate of Financial Executives International (FEI). FERF researchers identify key financial issues and develop impartial, timely research reports for FEI members and nonmembers alike, in a variety of publication formats. FERF relies primarily on voluntary tax-deductible contributions from corporations and individuals, and publications can be ordered by logging on to www.ferf.org.

About the Authors

About Robert Half and Financial Executives Research Foundation

53

Executive Summary

Workforce Management

Accounting Operations

Financial Systems

Outsourcing

Internal Controls and Compliance

Putting the Data to Work

Acknowledgments

Research Methodology and Respondent Demographics

About the Authors

About Robert Half and Financial Executives Research Foundation

Copyright © 2017 by Financial Executives Research Foundation, Inc. All rights reserved. No part of this publication may be reproduced in any form or by any means without written permission from the publisher. The views set forth in this publication are those of the authors and do not necessarily represent those of the FERF Board as a whole, individual trustees, employees, or the members of the Advisory Committee. FERF shall be held harmless against any claims, demands, suits, damages, injuries, costs, or expenses of any kind or nature whatsoever except such liabilities as may result solely from misconduct or improper performance by FERF or any of its representatives. International Standard Book Number 978-1-61509-224-6 Printed in the United States of America First Printing Authorization to photocopy items for internal or personal use, or the internal or personal use of specific clients, is granted by FERF provided that an appropriate fee is paid to Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923. Fee inquiries can be directed to Copyright Clearance Center at 978.750.8400. For further information, please check Copyright Clearance Center online at www.copyright.com.

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