Europe’s Scaling Businesses Are Paying a “Control Tax”, New Pleo Research Reveals

WHY THIS MATTERS: Scaling is often romanticized in startup culture, but the reality for European mid-market firms is that rapid growth frequently breaks the back-office. The “control tax”—the cumulative burden of fragmented, manual processes—has become an existential threat to sustainable expansion. As businesses venture into complex, cross-border operations, the reliance on disjointed, legacy finance stacks creates a visibility void that hinders strategic planning. This is not merely an administrative annoyance; it is a fundamental failure of digital maturity. Companies that fail to modernize their finance operations will inadvertently cannibalize their own growth through operational inefficiency, as administrative bloat crowds out critical innovation and financial agility. True success in the current climate requires leaders to recognize that their financial infrastructure must evolve in lockstep with their revenue ambitions, transitioning from reactive firefighting to proactive, automated oversight.

European mid-market businesses are not short on ambition, but new research from Pleo reveals many are being held back by finance operations that cannot scale at the same pace.

According to Pleo’s latest Pulse Report, 91% of European businesses are scaling or planning to scale (defined as scalers), yet 83% of this group are concerned about managing that growth effectively. The findings point to a growing tension: companies that are focused on expansion, but many are struggling with the operational complexity that comes with it.

Scaling is creating a control tax

As businesses grow, finance teams are increasingly facing what Pleo describes as a ‘control tax’: greater cross-border complexity, more manual oversight, more fragmented data and less uninterrupted time for strategic work.

This challenge becomes particularly acute as companies expand internationally. Almost two-thirds (64%) of scalers say cross-border expansion is critical or highly important to growth, yet 72% say operating across European markets involves different and complicated processes. A further 65% say scaling across borders can feel like launching a new business all over again.

Finance teams are feeling the strain the most acutely. More than two-thirds (69%) of scalers say growth creates a trade-off between expansion and control, while 72% of this group say scaling increases financial complexity. Meanwhile, 65% say maintaining financial control becomes harder as the business grows.

Finance systems are failing to keep up

At the same time, many businesses are trying to scale on finance systems that were not built for their next phase of growth. More than half (52%) of scalers say their business is growing faster than their finance systems can keep up with, while 48% of this group have already seen finance systems break under pressure as they scale.

Manual oversight is compounding the challenge. Half of finance respondents say their current finance stack requires too much manual oversight, while 38% say their finance tech stack will not support the next phase of growth. Despite this, 21% of organisations still rely primarily on traditional spreadsheets for expense and spend management.

The findings point to a growing problem for scaling businesses: operations are becoming reactive, fragmented and difficult to control. As companies add new entities, tools and markets, finance leaders are spending more time managing operational complexity and time guiding strategic growth. 

Strategy is being buried under admin

Pleo’s research found finance teams now spend more time on busywork than on high-impact strategic work. On average, finance professionals spend 19% of their time on finance admin – including manual data cleaning, processing and reporting. Meanwhile, just 16% is spent on strategic work.

More than half (56%) say they have not had a single uninterrupted day to focus on strategic finance work in the past month, while 53% say their role now demands more strategic input than they are currently able to deliver. Only 29% say their financial skills and experience are being fully utilised by their business at all times.

As a result, important strategic work is being pushed down the priority list, including financial scenario planning, innovation initiatives, market analysis and strategic modelling.

Businesses need finance operations built for scale

The research suggests the answer is not simply adding more tools. Instead, businesses need finance operations designed to scale alongside the company itself.

Almost half (48%) say their current finance stack lacks automation and AI capabilities, while 42% say automated workflows are among the capabilities most lacking in finance tools. Poor integration is also adding to the burden, creating excessive financial admin for 36% of respondents.

When asked what they need most from financial tooling, respondents pointed to better / native out-of-the-box integration with platform and tools (49%), accurate bookkeeping (40%), Human Resource Information Systems (HRIS) integrations (35%), automatic workflows (33%) and a central view of spend (26%).

Søren Lonning, CFO of Pleo, commented: “European businesses have the ambition to scale, but too many are being held back by finance operations that cannot keep pace. As companies expand across markets, finance teams are left paying the price: more manual oversight, disconnected tools, fragmented data and less time for the strategic work that drives growth.

“To scale with confidence, businesses need finance operations built for growth from day one. That means real-time visibility, smarter workflows, better integration and stronger guardrails. Automation and AI can be powerful, but only when they are part of an integrated system that helps finance teams move from firefighting to strategy.

“Pleo is the spend platform built for how European businesses close their books. While others are still translating for European finance, Pleo is already native, as we integrate with more financial tools than anyone else. We don’t just connect to your stack, we live inside it.” 

Mal Esankamal, Head of Finance, Cubbitts commented: ‘”Pleo is perfect for our size now, and when we scale, we’ll already have the infrastructure in place to support that growth.”

FF NEWS TAKE: The data confirms what we have long suspected: the “control tax” is the silent barrier to scaling success. It is not about adding headcount; it is about deploying integrated systems that prevent data fragmentation. Does this move the needle? Absolutely—but only if leaders stop viewing finance stacks as purely transactional. Watch for rapid market consolidation as mid-market firms aggressively swap out disconnected legacy tools for natively integrated, automated platforms.