Seems many of your fellow finance departments are having “trust issues”: More than half (55%) of companies aren’t completely confident they can identify financial errors before they report their results.
Even worse: 70% of finance execs and biz leaders believe their firm has made a significant business decision based on inaccurate financial data.
Those eye-openers come from a recent study by BlackLine. And they can lead to some very serious – and costly – missteps.
Of course this has a ripple effect. You can bet the same phenomenon’s likely happening with your key customers and suppliers, impacting you.
Here’s where things are going wrong for your peers and what they’re doing to increase the accuracy of their reporting so you can be more confident in your own numbers.
The no. 1 culprit for financial errors is …
You probably won’t be shocked to hear that manual data entry and human error top the list of reasons it’s so tough to trust the numbers. A full 41% of BlackLine survey respondents offered that as the problem.
But what else is standing in the way of more accurate reporting?
- Companies lack sufficient automated controls and checks for the volume of data they must handle (28%), and
- The process to collect and process the data was just too complex (28%).
Righting the ship
So what are your peers doing about it? Here are the top three avenues they’ve pursued to have more confidence in their own numbers:
- 41% have implemented technology to minimize the risk of inaccuracies. Automating is a good way to reduce human error, whether you tap Optical Character Recognition Software or Artificial Intelligence. Just be careful – you’ll want to make sure the data coming in is clean. Otherwise automating won’t give you the results you’re hoping for.
- 38% have reviewed both their internal and external audit processes. That’s always a welcome move, but it’s still a reactive solution to the problem at hand. You want to do this in coordination with other fixes to keep financial errors at bay.
- 28% have changed their organization’s reporting process. If you’re thinking about going that route, be sure to enlist feedback from many different sources, from accounting staffers on the front lines to the high-level execs who receive – and act based on – reports.