By Daniel Hunter

UK companies need to overhaul their finance functions or suffer competitive disadvantage as the economy recovers and growth opportunities return, says PwC’s Finance Effectiveness Benchmark study.

The annual review of over 200 companies’ finance functions shows how less than half of financial professionals believe their company’s financial forecasts are reliable.

Andrew McCorkell, director, PwC said: “Technological and management advances of recent years have enabled the best finance functions to become real-time sources of insight to the business, and more are on a mission to achieve this. In the current climate, an out of date or poorly performing finance function will cost a company dearly in terms of innovation and growth.”

Middling finance functions are running at 60% higher cost to businesses
than top performers, with the best performing companies often employing outsourcing and shared service centres to drive down costs. Median budget reporting times have shortened by 14% this year thanks to improvements in technology and automation. The cost of finance functions remains highest within the financial services industry, running at around 1.48% of revenues for the median quartile compared to 0.86% of for the top.

The report also notes the need for many financial professionals to change their mindset round what they do.

Brian Furness, partner, PwC, said: “Moving into new markets, disruptive technologies and the demands of a new generation of digital customers are just some of the mega-trends informing and transforming businesses
today. Finance needs to advise and assist decision makers, and to participate
in those decisions.

“We are seeing finance as a discipline change from a technical challenge to an adaptive challenge. Businesses need to facilitate this transformation of skills and talent by building effective teams that will support them through recovery and into growth.”

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