Whether it be implementing a new enterprise resource planning (ERP) system, incorporating a new piece of invoice processing software to an already existing technology stack or using technology to improve financial reporting, the associated time and cost is extensive. It’s why going through the process of improving technology within the finance function can be some of the most laborious and workflow-disrupting tasks a CFO can go through.
Because of this, the effort, time and money spent on incorporating new technologies and the processes that come with their implementation are increasing according to multiple data sources. In recent findings by the American Institute of Certified Public Accountants (AICPA) in its Q2 2024 AICPA Economic Outlook Survey, respondents indicate CFO spending on technology is up 3.8% QoQ in the second quarter of 2024, the highest jump in over two years.
Money and time
As the costs associated with IT products hit recent highs, other spending plans remained relatively the same. Training spend rose 1.7% in Q2, alongside an increase of 2.2% when it came to spending for other capital.
The time associated with implementation is also an issue for CFOs. A recent PwC Pulse Survey of several hundred executives found 58% of the CFOs they talked to are spending more time on technology investment and implementation compared to a year ago.
Despite data from both PwC and the AICPA indicating the digital transformations aren’t saving many CFOs time or money — at least at the start — data also shows CFOs are finding the investments still worth making. Forty-four percent of the CFOs surveyed by PwC said increasing the use of tech to reduce costs is very important to fund in the next 12 months, and almost half (46%) are prioritizing technology implementation right now.
Satisfaction with labor quantity
For those surveyed by the AICPA, talent shortages — particularly the highly publicized shortages in accounting — aren’t as much of a factor now as they may have previously been. More than half (56%) of respondents were content with their headcounts, saying they have the right number of employees at the current time.
That figure is up 7% from last quarter, the highest change of any labor metric in the survey from last quarter, suggesting some finance teams may have recently filled vacant positions earlier in the year.
CFOs who aren’t comfortable with their headcount seemed to differentiate heavily on why. Sixteen percent said they have too few employees but plan to hire more (down 6% from Q1), alongside 13% saying they are hesitating to hire new staff despite the need. Eleven percent said they are on the opposite side of the labor need spectrum, saying they’re in a situation where they have too many employees.
Economic outlook and recession expectations
CFOs who are planning to take the time and money required to improve their organizations are also taking into consideration how geopolitical and geoeconomic uncertainty can impact their business.
According to the data, confidence around the U.S. economy dropped 8% from Q1 to Q2, with just 35% of showcasing confidence. When it comes to a positive global economic outlook, a marginal increase of 1% does little to hamper a dreadful figure — only 22% said they’re confident in the global economy moving forward.
Despite a drop in confidence around the U.S. economy in particular, the amount of AICPA members who argue a recession is taking place, or is likely to happen, has dramatically decreased. Only 15% of respondents said we are currently in a recession; less than half the amount that said the same in Q2 of 2023.
Nearly half (45%) said they don’t expect a recession at all, a number that, although is marginally down from last quarter (3% decrease), is up from just 13% at this time last year. Just over a fifth (21%) said they expect a recession at some point in 2024, a prediction that 40% of respondents also made in Q4 of last year and then just 19% made last quarter.
The AICPA’s Q2 2024 survey included 315 qualified responses from AICPA members holding executive positions in business and industry.
The PwC’s survey featured 673 U.S.-based executives, including CFOs and finance leaders (13%), tax leaders (12%), risk management leaders, including CROs, CAEs and CISOs (12%), CIOs, CTOs and technology leaders (12%), CHROs and human capital leaders (12%), COOs and operations leaders (12%), corporate board directors (8%), CMOs and marketing leaders (12%) and CEOs (7%).
