Despite growing pressure from private equity sponsors to automate budgeting, finance leaders remain reluctant to abandon familiar tools, with 84% of PE-backed CFOs still building the core budget model in Excel, according to a new survey by private equity consulting firm Accordion.
When asked which finance activities they would let AI run autonomously, CFOs showed the strongest resistance around forecasting and budgeting, chosen by 76% of respondents, followed by board reporting (64%). Other areas where finance leaders push back on automation include vendor and AP management (52%), expense and travel and expense processing (41%) and close and consolidation (33%).
Accordion’s survey was conducted with Wakefield Research in September and received responses from 100 private equity operating partners at private equity sponsors and 100 CFOs at private equity-backed companies with $50 million or more in annual revenue.
Seventy-four percent of operating partners said the top opportunity for AI in finance is budgeting — the area CFOs said they are most protective of. This was followed by close-cycle acceleration at 68% and revenue and margin intelligence at 61%.
Value creation and valuation are a big part of PE operating partners’ push for AI, with 65% of sponsors saying they are confident AI-enabled budgeting expands exit multiples. The report found that 44% of buyers are already asking about the technology in diligence and 9% of completed deals showed “a demonstrable AI exit premium.”
Budgeting benchmarks
Budgeting remains a time-intensive process for firms, and even more so for those who have completed recent add-on acquisitions. PE-backed finance leaders said it takes an average of 11 weeks to build out the annual budget, from kickoff to board-ready. For firms that completed an add-on acquisition in the past 12 months, that timeline stretches to 14 weeks.
Finance leaders identified several recurring tasks that contribute to the 11-week cycle. CFOs said the cycle breaks down into four areas: reconciling department inputs (estimated to take up about 38% of that time, reworking assumptions after sponsor feedback (27%), formatting and rebuilding for board presentation (22%) and strategic analysis (13%).
Among CFOs who have piloted AI-assisted reconciliation for at least one part of the cycle, most said they got back four to five weeks, bringing their average budget cycle length down to six to seven weeks. The report does not specify what share of respondents "most" represents.
Sixty-seven percent of finance leaders said the budgeting model will undergo five or more full-scale revisions before it is final. When breaking down the causes of late-cycle budget revisions, 46% of those surveyed said a single late assumption tweak with minimal strategic impact was the top cause. Other reasons included department heads submitting numbers late (31%) and a shift in the underlying business (23%).
