European mid-market companies are ambitious to grow, but many are being held back by finance processes unable to keep pace with that growth, according to a new study from Pleo.
According to Pleo’s latest Pulse Report, 91% of European companies are growing or plan to expand their business in the coming years. In Spain, this figure reaches 94%, the highest among the markets analyzed. However, this growth also raises concerns, as 83% of these companies acknowledge worry about their ability to manage that expansion effectively, a concern that in Spain rises to 89%.
The data reveals an emerging tension in the European business fabric and it is that while organizations maintain strong growth ambitions, many struggle to manage the growing operational complexity that this entails.
The growth is generating a “control tax”
As companies grow, finance teams are increasingly confronted with what Pleo calls a “control tax” — a greater operational complexity derived from international expansion, more manual oversight processes, data scattered across multiple systems, and less time available for high-value strategic tasks.
The complexity intensifies especially in international expansion processes. According to the study, 64% of growing companies consider operating in multiple markets essential to continue expanding. However, 72% say that managing activity across different European countries involves dealing with complex regulations, processes and requirements, while 65% say that entering a new market can be as demanding as starting a business from scratch. Among Spanish finance leaders this perception is even sharper, with 71% stating that expanding internationally feels like launching a new business from zero, compared with 53% in Germany.
It is precisely the financial teams that are bearing much of this pressure. More than two-thirds of expanding companies (69%) acknowledge that growth forces them to strike an increasingly difficult balance between driving the business and maintaining control over operations. This tension is especially acute in Spain, where 82% of expanding companies feel there is a trade-off between growing and keeping control of the business, compared with 54% in Germany.
Furthermore, 72% say that scaling increases the organization’s financial complexity, while 65% indicate that preserving visibility and control of finances becomes more challenging as the company grows.
Financial systems are not prepared to keep up with growth
At the same time, many companies are attempting to tackle a new growth phase with financial systems that were not designed to support them in that process. More than half of expanding companies (52%) say their business is growing faster than their financial tools can handle, and in Spain this figure reaches 49%. Additionally, nearly one in two (48%) acknowledges having experienced failures or limitations in their financial systems due to growth pressures. Among Spanish finance leaders, the figure is very similar, with 47% reporting this kind of situation.
Manual oversight remains another major hurdle as half of the finance leaders surveyed say their current toolset requires too much manual intervention to function properly, while 38% believe their financial technology will not be able to sustain the next growth phase of the company. In Spain, 34% of finance leaders say their current technology ecosystem will not be able to accompany the next growth phase. Despite this, 21% of organizations still manage corporate expenses primarily through traditional spreadsheets.
The study’s results point to an increasingly widespread problem among growing companies, translating into increasingly reactive, fragmented, and hard-to-control financial operations. The lack of integration between systems appears to be one of the main contributing factors. In fact, 38% of Spanish finance leaders say that the disconnect between tools creates an excessive administrative burden for their teams.
Strategy is buried under administrative tasks
The results show that the growing operational complexity is pushing strategic work out of reach for finance teams. On average, finance professionals devote 19% of their time to administrative tasks, such as manual data cleansing, processing information, or preparing reports. By contrast, only 16% of their day is allocated to growth- and decision-oriented strategic activities.
The data suggests that finance leaders are getting stuck in the day-to-day management of the business. More than half (56%) say they have not had a single uninterrupted full day in the last month to devote to strategic tasks. In Spain, this situation is even more severe, with 60% saying they have not had even one interruption-free day for such work.
At the same time, 53% feel that their role should contribute more to areas such as planning, growth, or decision-making, but they lack the time to do so. This situation directly impacts talent utilization: only three in ten finance professionals (29%) feel that their knowledge and experience are being fully utilized within the company. In Spain, this perception is even lower, with only 27% feeling their capabilities are being fully leveraged.
Ultimately, a number of important strategic tasks are being relegated to the background, including financial scenario planning, innovation initiatives, market analysis, and the development of strategic models. In Spain, the activities most frequently displaced by operational demands are professional development (31%), innovation initiatives (28%), competitive analysis (27%), market analysis (26%), and financial scenario planning (24%).
Businesses need financial operations built to grow
The study suggests that the answer isn’t simply about adding more tools. Rather, companies need financial operations built to grow at the same pace as the business itself.
Almost half of expanding companies (48%) say their current financial tools lack sufficient automation and AI capabilities. Additionally, 42% identify automated workflows as one of the most needed and least present capabilities in their technology ecosystem. Add to this the lack of integration between systems, a shortcoming that creates an excessive administrative burden for 36% of the finance leaders surveyed.
When asked what capabilities finance leaders consider priorities in their management tools, the top demand was better native integration with the platforms and systems they already use (49%). They also highlighted the need for more accurate and reliable accounting (40%), integrations with HRIS systems (35%), automated workflows (33%), and a centralized view of all organizational expenses (26%).
In Spain, the priorities are similar, though with a greater emphasis on automation and data quality. The most demanded capabilities are better native integration with platforms and tools (48%), more accurate accounting (38%), automation of tax processes (36%), greater data integrity (35%), HRIS integrations (34%), and supplier management automation (32%).
Søren Lonning, CFO of Pleo, said: “European companies have the necessary ambition to grow, but too many remain constrained by financial operations that do not evolve at the same pace as the business. As organizations expand into new markets, it is the finance teams that end up bearing the cost of that complexity: more manual oversight, tools that are disconnected from one another, fragmented data, and less time to devote to the strategic work that genuinely drives growth.”
