Nearly 40% of CFOs do not Completely Trust their Organization's Financial Data
Errors due to manual processing of critical finance and accounting activities identified as key issue negatively impacting trust.
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Trusting the data organizations work with is critical for effective decision-making for the CFO and the entire business ecosystem. This is especially important when dealing with external events that are difficult to predict or control.
A new research finding shows that, globally, C-suite and senior finance and accounting (F&A) professionals do not entirely trust the accuracy of their organization’s financial data.
According to BlackLine research, nearly 40% of CFOs worldwide do not completely trust the accuracy of their organization’s financial data. Confidence in cash flow visibility also remains stubbornly low, making it difficult for organizations to respond to unexpected market changes.
The research shows more than three-quarters (78%) of respondents are concerned about another global financial crisis. Respondents also worry about cybersecurity issues (76%) and new disruptive technology (73%) in their business.
Responding to Business and Economic Disruption
When asked what would help their company respond to business disruption, CFOs said one of the most important factors would be the ability to access and analyze financial data in real-time. However, 37% admitted they do not completely trust their own data. Levels of trust are even lower for those closer to the numbers, with 50% of senior finance and accounting professionals indicating they do not fully trust the financial data they are working with.
Additionally, for the second year in a row, a staggering 98% of overall respondents confirmed they lack complete confidence in their organization’s visibility over its cash flow. This is because 37% acknowledge that understanding cash flow in real-time will be critical for their company’s ability to deal with unpredictable market changes.
Visibility Challenges Undermining Responsiveness
The lack of confidence in cash flow visibility is causing challenges for business responsiveness. Close to half (48%) of respondents say this makes it harder to respond to market fluctuations, and a similar number (47%) are concerned they are making decisions based on inaccurate or out-of-date information.
Manual processes and the potential for human error also challenge organizational preparedness and decision-making. Almost two-thirds (64%) of respondents stressed that the overwhelming volume of manual day-to-day work leaves little or no time for proper financial planning and analysis. At the same time, more than two-thirds (68%) state that manual work leaves their organization vulnerable to errors that could undermine business decision-making.
Manual Processes Limiting Trust
When asked why they did not completely trust their organization’s data, almost a third (31%) of global respondents said the data comes from too many different sources, meaning they cannot be certain that all data is being accounted for. Other reasons include reliance on clunky spreadsheets that leave F&A teams in the dark until month-end (27%) and outdated processes, including manual data collection, which is prone to human errors (25%).
In acknowledging the myriad of challenges with manual work, C-suite and F&A leaders feel the modern business has to embrace new technologies like AI to streamline their financial operations, with a majority of respondents saying that cloud computing (80%), generative AI (78%), and new kinds of AI (76%) are essential for improving business resiliency in the face of future disruption.
Confidence in financial data is undermined due to ineffective manual processes. Although businesses have invested in technology solutions, including AI, many still rely on manual processes for a significant portion of finance and accounting work.
According to the report, companies must embrace modern, next-generation solutions that automate cumbersome processes, such as financial close, consolidation, invoice-to-cash, and intercompany, and give them complete visibility and control over their financial data.
This is indispensable to building resilient organizations.
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