There are a lot of things that keep finance executives up at night, but simple financial errors are one of their top worries, according to a recent survey.
More than half — 55 percent — of C-suite and finance executives surveyed said that they are not completely confident they can identify financial errors before reporting results. Nearly 70 percent of respondents said their organization has made a significant business decision based on inaccurate financial data, and a full quarter said they have concern over errors that they know must exist, but into which they have no visibility.
These concerns over something as simple as numerical errors seem like they should belong to a bygone era where the promises of artificial intelligence and automation of processes hadn't begun to be developed. But today, surely no CFO should be losing sleep over something simple software should be able to fix?
In the survey, more respondents (41 percent) selected human error as the main reason for inaccurate financial data than any other option, including not having enough automated controls and checks (28 percent) or having to rely on outdated technology (another 28 percent).
But Ralph Canter, managing director of financial management for Big Four firm KPMG, said in the survey report that human error should not be blamed in the era of advanced technology. “Competing today requires accurate data to support increasing complex growth strategies,” he said. “The demand for financial information isn’t just each month, but weekly and for some companies daily. This is not a problem that can be solved by adding more humans to process more data or reports. Greater transaction volumes, more complex operating models, and demands for greater business insights will need improved application of process automation and improved data models.”
“It is concerning that so many organizations are not confident in their ability to identify errors and ensure accurate reporting,” Mario Spanicciati, chief strategy officer at BlackLine, the accounting software company that ran the survey, said in the report. “Not just for compliance purposes, but also, as respondents themselves identified, the acceptable margin of error with accounts is decreasing in today’s technology-driven world. In reality, there is no longer any excuse for not having full visibility into accurate numbers from which to report and drive business forward.”
There is good news: 41 percent of respondents claimed they have implemented technology in order to mitigate the risk of inaccuracy, while 38 percent have reviewed internal and external audit processes, with 28 percent saying they have changed their company’s reporting processes.
BlackLine’s study was conducted in August and September of 2018. The research was conducted by Censuswide, with 579 C-level and 575 finance professionals in the U.K., US, France, Germany, Australia, Hong Kong and Singapore participating.
