iplicit, the rapidly growing UK Accounting Software provider, has published research that identifies the perceived barriers that finance leaders see from changing their accounting systems. The study, “Adding to the Pressure,” is based on a survey of 1,000 finance leaders around the state of their accounting software.
It found that 42% of finance leaders are reluctant to change their accounting system because of the risk of lost historical data. The percentage is a huge rise from 23% in 2023. The research, however, did not determine why the sudden increase. Respondents do not want to have to run two systems to access it. Whilst 32% cited the cost of a right-to-use license to access historical data from a legacy solution as a concern.
A second barrier highlighted in the survey is that 27% believe that it would take too long to see a return on investment from changing to a new finance system.
Lyndon Stickley, Chief Executive Officer at iplicit, commented on the results, “The sharp rise from 26% to 42% in just a year highlights just how scared UK finance decision-makers are about losing historical data during a system change. This fear is becoming a significant barrier to technological advancement. Yet, it is largely unfounded.
“Providers of accounting software should have a responsibility to address these concerns, offering clear guidance and robust support to alleviate these fears.”
Perhaps of greater concern in these findings is the inefficiency that finance leaders are still facing within their functions. 93% of respondents work beyond their contractual hours, and 40% feel stressed often or all the time. With the recruitment of talent, another concern, the lack of trust in digitising their function is of concern. 80% of respondents are worried about the lack of talent entering the accounting/finance sector.
Adding to the Pressure
The report is 20 pages in length and after a foreword by Stickley, the key highlights have six main sections:
- Addressing escalating stress levels
- Highlighting the inefficiencies in UK finance departments
- Understanding the barriers to change
- The undeniable ROI argument
- Imposing control in an uncertain future
- Good has just got a lot better
Each section consists of data points from the survey results with commentary and some analysis. What the report lacks is some qualitative data that would shed further light on some of the findings. Within the report, there are also no quotes from experts, either those from iplicit or other industry organisations. These might have given weight to some of the findings.
Finance leaders face an ever-growing set of triggers for stress. The top five highlighted in the report were:
- A lack of staff resources to meet the organisation’s needs (28%)
- The need to manage budget constraints for the wider organisation and stakeholders (28%)
- The pressure associated with taking too long to create reports (24%)
- Responsibility for other areas outside finance, such as HR and IT (24%)
- Team management (24%)
Inefficiency remains
The lack of resources is exacerbated by digital tools to ease the burden. Finance leaders often have too many instances of software and 37% still spend too much time using spreadsheets to manipulate data. What isn’t pulled out from the quantitative data and might have been from some qualitative elements is why this happens.
One suggested reason is that the software in use does not meet the modern requirements of the finance team. Modern cloud solutions can ease that burden. They can build trust in data with real-time information and an audit trail that allows teams to start trusting their data again.
As CEOs demand a forward-looking rather than a backwards-looking finance team, they will struggle with the wrong tools to achieve this.
However, while these modern systems offer promise, finance leaders are reluctant to let go of the past and only see that maintaining old and new systems is the only viable option. iplicit, like many other cloud solutions, do, however provide a solution that enables firms to bring historic data across into an archive for reporting purposes.
The ROI of a modern cloud solution
The highlight of the report is the section that highlights the benefits of digitising the finance function. It lays out the benefits that a new finance solution can deliver for as little as £1,700 per month. It also highlights four of the benefits of implementing a modern solution:
- Month-end processes will take less than seven days
- Departments outside of finance can manage their budgets, lightening the load on finance teams
- Automation of finance processes will reduce overtime
- A modern solution will make the firm more attractive to new talent
Another barrier to digitisation is the lack of skills to implement such a solution. However, outsourcing to an external party offers tax benefits. With access to professional services teams, both within iplicit and its partners, firms can access experts without them completely disappearing at the end of the project.
A cloud accounting solution also offers better security and the flexibility to adapt and improve without costly upgrades. 38% cited cyber security as the primary concern regarding the future of finance.
Stickley added, “By demonstrating how cloud solutions can safeguard data and improve operational efficiency, I firmly believe that we can help UK finance decision-makers to move beyond the obvious limitations of legacy systems and embrace the full potential of modern, on-premises cloud accounting systems.”
Enterprise Times: What does this mean
This is a useful piece of research that highlights some of the barriers that still exist in the minds of finance leaders across the UK. Stickley is confident that these barriers are perceived and that opening a meaningful dialogue can alleviate them.
While not every cloud vendor is willing to ingest historical data, iplicit already has the vehicle for firms to take advantage of their need to report against historical data without the costs of maintaining a legacy solution.
Stickley added, “The fear of losing historical financial data should never be a barrier to adopting more advanced and effective accounting software. It’s time for finance leaders to overcome, break free from oppressors, and switch to an accounting software provider that isn’t going to hold you hostage by charging you to access essential historical data.”
In retaining legacy on-premises solutions, organisations risk losing out on efficiency talent and turning finance into a strategic asset for their organisation.
Stickley concluded with a piece of advice, “If you’re exploring new accounting software, do your homework and recognise that, despite what your vendor may tell you, you can access your legacy data without shelling out for an unnecessary and costly licence.”
