Sage 2021 Close the Books Survey
Sage released the key findings of the 2021 Close the Books Survey, a poll of over 1,600 finance and accounting professionals. The purpose of this yearly survey is to help finance leaders benchmark against their peers and learn best practices.
This year’s findings revealed that the close process remains an endurance challenge for many businesses and an obstacle to getting timely information for strategic decision making. It also found that businesses that switched from spreadsheets to cloud financial systems were able to close the books 36% faster. Other findings include the acceleration of cloud software adoption during the pandemic, as businesses adapted more easily to a remote close with cloud financial systems than on-premise.
Close Process Remains a Challenge
Nearly 60% of respondents reported that the close process takes over a week, delaying access to vital business information.
The main barriers to a timely close were manipulating data in spreadsheets and data imports/exports. These manual tasks slowed the process and resulted in making decisions based on outdated information. The businesses most impacted by spreadsheet manipulation have a 36% longer close process than those only slightly impacted. For those impacted by manual data imports/exports, the close process is 25% longer than those only slightly impacted.
More Businesses Achieving a Faster Close by Adopting the Cloud
This year’s findings also revealed a trend in businesses moving their financials to the cloud. 58% of survey respondents reported currently using a cloud or hybrid financial management system. Of those using on-premise solutions 70% are planning to move to the cloud, an increase of 27% compared to the 2020 survey. This steep increase was likely accelerated due to the pandemic and the opportunity for a faster close.
In fact, when evaluating the impact of COVID-19, businesses already on cloud financial systems like Sage Intacct had an advantage when adapting to a remote close. 59% of those on cloud software reported an extremely smooth transition, compared to only 32% of those using on-premise software.
Companies on cloud-based systems were able to operate without disruption even during the sudden shift to a remote close experience.
More Close the Books Survey Findings:
- Organizations were able to close the books up to 70% faster by automating consolidation activities including currency conversions, inter-entity transactions, local tax reporting, and more—eliminating hours to days of manual work.
- Those who reported automating over 50% of their journal entries close the books 20% faster.
- Closing the books is two days faster for businesses with over 5 entities when using a cloud financial management system instead of spreadsheets or QuickBooks.
- 40% of organizations reported investing in assistance with closing the books. Those who invested in technology closed their books 25% faster than those who invested in headcount. They were also able to spend more of their time on strategy instead of manual tasks.
Faster Close with the Cloud
With cloud financial management systems, finance teams can eliminate or minimize repetitive manual tasks. Users can complete key tasks like consolidations, accruals, and allocations directly in the system – instead of requiring a separate spreadsheet. Cloud based systems also offer application programming interfaces (APIs) to easily connect with other systems and automate data import/exports.
Cloud solutions provide the foundation for automation and AI—available today—to transform the close. That leaves you with a current and accurate view of your business, so you can focus beyond the bottom line. Having the right technology enables finance teams to gain faster insights as they evolve from historians to visionary business leaders.
Accelerating the close takes you out of the ledger and keeps you ready for what’s next. To see the full results, download the 2021 Close the Books Survey report: Living on the Ledger. If you're considering a cloud financial management system, learn more about Sage Intacct