CFO’s Seem Skeptical About Their Company’s Data

Confidence in cash flow is a massive issue in corporate finance.

In a world where information is king, a surprisingly high percentage of global chief financial officers don’t wholly trust their organization’s financial data.

That’s the sentiment from a new study by digital finance transformation leader Blackline, Inc.

The study reports that 40% of CFOs aren’t confident in the quality of their company’s financial data. That scenario, BlackLine says, can lead to more significant problems.

“(Lack of CFO confidence) creates challenges for strategic decision-making when global business leaders are confronted with a wide range of external challenges,” the report noted. “Confidence in cash flow visibility also remains stubbornly low, making it difficult for organizations to respond to unexpected market changes.”

The study tracked CFO sentiment among 1,300 corporate finance professionals worldwide on critical issues like a potential global financial crisis, cybersecurity issues, and technology-driven business disruptions.

73% of respondents were especially concerned about “new disruptive technology” in their companies.

“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,” the study reported. “However, 37% admitted they do not completely trust their data.”

“Levels of trust” slide lower among CFOs who operated “closest to their company’s numbers, with 50% of senior finance and accounting professionals indicating “they do not fully trust the financial data they are working with.”

Some Problems Are Bigger Than Others

Cash flow is a particularly vexing issue.

BlackLine reports a “staggering” 98% of CFOs don’t have complete confidence in their company’s cash flow processes. One upside is that 37% of finance executives say understanding cash flow in real time “will be critical for their company’s ability to deal with unpredictable market changes.”

The study also notes the final death toll for manually driven data processing.

Manual processing “limits trust,” the report stated.

There are varying reasons for that sentiment, with one-third of CFOs saying the data comes from too many different sources and can’t properly be accounted for. A “reliance on clunky spreadsheets that leave F&A teams in the dark until month-end” and “outdated processes, including manual data collection which is prone to human errors” also generate primary concern among global CFOs.

On the upside, the same financial executives say that embracing new technologies like artificial intelligence and cloud computing can alleviate the “myriad of challenges with manual work.”

“When we look at what is undermining confidence in financial data, we repeatedly find that ineffective, manual processes are the problem,” said Owen Ryan, co-CEO of BlackLine. “Businesses have invested in technology solutions in recent years, including emerging forms of AI, but it’s clear that too many still rely on manual processes for a significant portion of finance and accounting work.”

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,” Ryan noted.

“These will be indispensable assets in navigating the terrain of the future and building resilience for future success,” he added.





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