Survey reports on findings from 400+ global finance leaders on the state of the finance function amidst the ongoing COVID-19 crisis, conducted in partnership between Avalara & Zuora.
COVID-19 swept 2020 like a slow-moving tsunami. In its wake, the pandemic upended business models, roiled markets, and disrupted traditional ways of working. And that’s just so far. In order to dig beneath the headlines and get a direct bead on the impacts, both short and long-term, Zuora, the leading cloud-based subscription management platform provider, partnered with tax compliance software firm Avalara to conduct a survey of how the pandemic and related restrictions continue to specifically impact finance professionals and teams. The survey included a broad cross-section of 400 finance professionals (from managers to controllers to CFOs) based in the U.S. and in Europe, representing a range of industries, from software and technology to media, healthcare, manufacturing, and more. Findings revealed both anticipated impacts, for instance hits to cash flow were common as customers delayed or scaled back payments — but also some unexpected outcomes, such as an acceleration of automation. Here we take a closer look at the data that demonstrates how COVID-19 has accelerated the push towards automation within the finance function.
Many expense categories, including marketing and sales (59%) and employee personnel expenses (49%) have taken a hit. Technology investments have also been impacted, with 32% of finance professionals saying that they’ve reduced spending on technology. But on the flip side, we’re seeing Finance teams leaning more and more heavily on process automation technology.
Nearly half (47%) those surveyed believe automation has helped their business handle the financial changes caused by the pandemic.
This is likely a reflection of an acceleration of online digital trends (across industries, not just as relates to “traditional” ecommerce like retail). Subscription billing software came in at number two with 25.21%. This again reinforces the value of recurring revenue models — and the ability to efficiently manage these models — amidst COVID-19. And tax compliance technology ranked #3 with 18.49% of finance professionals. This finding further exemplifies the need for technology to manage the increasingly complex world of tax compliance. A 2020 survey on remote sales tax laws found that nearly 4 out of 10 businesses are using some sort of automated solution to address remote sales tax compliance obligations.
Going forward, companies see automation, whether of CRM systems, processes, and especially, for forecasting metrics as a key not just to greater efficiency but also to increased consistency of service, which directly correlates with customer retention.
Expense management, and reevaluating company cost bases have obviously taken on more importance. For instance Zuora has adopted a zero-based budgeting process in response to the pandemic. Yet respondents expect to increase, not decrease, their technology spending. In a roundtable follow-up to the survey, 82% of finance professionals said they planned to increase spending on technology as the pandemic progresses, despite the heightened focus on costs. Automation had already seen growing gains in recent years as companies woke up to the costs of manual processes. In this climate, with the focus on stabilizing revenue and driving demand, businesses have even less tolerance for manual workarounds, inconsistency, and custom processes. As Zuora CFO, Todd McElhatton put it, “Investments are focused on anything that helps us become more efficient at scale.”
Collections and payments (28%), and forecasting and metrics reporting (28%) tied for number two, while financial reporting (23%) took fourth.