Hidden costs in finance teams threaten company growth ambitions

Internal inefficiencies within finance teams pose a significant but often overlooked challenge for companies aiming for external expansion. As organisations launch into new markets, acquire subsidiaries, or grow their operations, finance departments can experience a hidden drain on productivity that impacts the company's ability to execute strategic growth plans.

Resource allocation

Recent analysis shows that up to 85% of finance team time can be devoted to gathering and validating financial data. Only 15% remains for strategic analysis required to inform growth decisions, according to research from Accenture. Additionally, nearly four out of ten firms reportedly lose one day each week to the financial reconciliation process when managing multiple corporate entities.

Multi-entity "tax"

As organisations grow, complexity within the finance function can increase dramatically. Disparate systems, especially those brought together through mergers and acquisitions, require regular reconciliation-a process that is often manual and time-consuming. A 2025 study by Modern Treasury found that 98% of companies still rely on some manual processes in payment operations.

More than half of surveyed companies indicated that between 26% and 50% of their payment operations are handled manually. This manual approach not only demands substantial time but also increases the risk of errors, leads to delays in audits, and escalates both internal and external costs.

Error risk

Manual data entry and disconnected financial systems heighten the likelihood of mistakes. As firms add more entities, the potential for error grows due to differing data protocols and misaligned reporting periods. These mistakes can take significant time and resources to rectify and frequently result in prolonged audit cycles and higher professional fees.

Agility concerns

When financial information resides in silos across the organisation, executives struggle to access timely data. Outdated or incomplete information limits the capacity to make informed decisions quickly-a vital requirement in competitive markets with narrowing opportunity windows.

Talent retention issues

The overreliance on manual processes means that high-calibre finance professionals often spend their time on repetitive, administrative work. This leads to employee frustration, higher turnover rates, and the additional expense of hiring and training new staff. There is also a risk of losing institutional knowledge as experienced team members exit the organisation.

Opportunity costs

When finance teams lack a comprehensive, real-time view of cash flow, businesses are inclined to maintain a buffer of surplus capital. This cautious allocation can slow down investment in growth opportunities. Poor financial data can also delay strategic moves, such as market entry or acquisition due diligence, further inhibiting development.

Systemic oversight

Organisations may underestimate these challenges because inefficiencies are dispersed and not always immediately visible. Reliance on legacy technologies or core ERP systems, which may not be designed for multifaceted entity management, compounds the issue. Research indicates that most finance transformation initiatives fail to deliver expected outcomes, primarily because businesses depend on general-purpose systems for specialised requirements.

Compliance considerations can further constrain finance operations. While compliance is necessary, it can divert focus from process improvements that would better support growth objectives.

Steps forward

To address these hidden costs, companies are urged to assess the extent of manual processing within their finance departments. Evaluating whether current systems support multi-entity workflows and targeting precise pain points, rather than launching sweeping upgrades, may be more practical. Incremental improvements and clear metric-based reporting help finance leaders to measure progress and prioritise intervention.

"The companies that dominate won't always be the ones with the leading product or biggest footprint. They'll be those that continually excel at growth. The finance team is critical to this endeavour. Those that reduce inefficiencies and hidden costs will better enable their organisation to move quickly to fund expansions and protect them from faltering after the fact," said Konstantin Dzhengozov, CFO, Payhawk.