Two-thirds of UK finance chiefs hit by hidden software costs

An investigation has found that a significant majority of finance leaders have experienced hidden costs or unexpected price increases from their financial software providers.

According to a survey by AccountsIQ, 78% of finance leaders reported being caught off guard by such extra charges, a situation that is compounding existing business pressures amid a challenging economic environment.

The survey collected responses from 125 Chief Financial Officers and senior finance professionals across the United Kingdom, providing insight into sentiment and trends regarding the costs and transparency of financial software.

Detailed breakdowns in the survey show that 14% of respondents cited being affected specifically by price hikes, 44% noted hidden costs, while a further 21% reported experiencing both issues.

The prevalence of cost increases is driving businesses to reassess their software choices. Of those surveyed, 81% indicated that price rises made them want to switch to alternative financial software providers.

Perceptions of the fairness of price increases were highlighted, with 64% of finance leaders stating that the rises imposed by their current software providers were not justified.

Despite the desire to switch, many finance leaders view the process as challenging. The survey found that 60% cited lengthy implementation times as the most common barrier to adopting new financial software.

Nonetheless, a significant proportion of finance leaders are actively considering alternatives. In the past year, 57% considered switching to a more cost-effective solution, while 29% are currently contemplating a change. An additional 36% have either already switched or are actively searching for another provider.

The impact of software price increases is broader than software budgets alone. AccountsIQ found that 41% of surveyed finance leaders have had to reduce spending in other parts of their business to accommodate higher software costs.

Darren Cran, Chief Executive Officer of AccountsIQ, said: "Finance leaders are facing increasing pressure to manage costs while also having to deal with a multitude of global, political and economic challenges such as policy changes and inflationary shocks. Against this backdrop, the last thing they need is to be blindsided by hidden costs and repeated price hikes from their software partners."

Cran further elaborated on the importance of support for finance teams during the current period of economic volatility. "It's up to software providers to do everything they can to support the mid-market businesses that hold the key to economic growth. By helping finance teams work smarter, we can help them adapt, grow and overcome the challenges they face," he concluded.