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Increased regulatory pressures and the fear of sanctions for failure to comply are making FTSE-350 FDs reluctant to relinquish control over sensitive finance and accounting functions

The burden of handling regulatory and compliance issues has become a major obstacle to outsourcing finance and accounting business functions, according to research among UK finance directors.

The survey of 50 FDs from UK FTSE-350 companies by LogicaCMG has found that FDs believe that increased regulation and a greater emphasis on corporate governance are the biggest barrier to outsourcing. Only 7% currently outsource any finance and accounting functions, with 68% stating that the burden of current financial regimes is holding them back.

Accountancy Age: Compliance stifles outsourcing

A new report into reporting and forecasting processes in European companies offers suggestions for improvement

What are the hot topics that finance directors are facing this year? In short, it’s people, performance and processes, in that order, according to recent research by BPM International, a network of business performance management consultancies, the UK arm of which is Paragon Consulting.

The research questioned group FDs, financial controllers and planning managers in more than 130 European businesses, the bulk of which had revenues in excess of (euro) 1bn. It found that people pipped performance as the agenda-topping issue: improving the skills and capabilities of finance staff was regarded by 81% of the companies taking part in the survey as a ‘hot topic’ for 2007, just slightly ahead of the need to improve performance (80%).

People issues feature in the business units as well as the corporate centre, the research found, adding that 72% of respondents ranked ‘operational excellence in the finance function’ as a priority. But with such a high proportion chasing after excellence, the report authors said it was “astonishing how many companies have still not managed to get their basics right”. Moreover, the research unearthed the fact that there is a high potential for improvement in many businesses.

Performance management, predictably enough, was almost equally high, but further investigation by the researchers suggests that corporate performance is still not good enough: the blame would appear to lie with “external distractions” such as the demands of Sarbanes-Oxley compliance, IFRS and, for financial services groups, Basel II.

AccountancyAge: FDs tackle reporting processes