Numerous studies have demonstrated how trust increases efficiency. Researchers from the International Monetary Fund (IMF) and Duke University found that employees who trusted each other were more willing to expend effort and less likely to “monitor” the behavior of others, thus becoming more efficient in their roles.
Lee McEnany Caraher, founder and CEO of Double Forte, also correlates inefficiency with a lack of trust, stating, “When we don’t trust our colleagues, we develop muscle memory that drives inefficiency up—preparing for others to drop the ball”.
Less has been written about the reverse statement: how efficiency itself increases trust. From an accounting and finance perspective, efficiency enables the timely completion of key processes and the delivery of data crucial to decision making.
Accounting teams that can be more efficient—without compromising accuracy—can better support the controller, CFO, CEO, and external stakeholders. Efficiency within accounting drives trust because it enables others to do their jobs and accomplish key tasks on time. But efficiency is hard to achieve when accounting professionals are dependent on manual accounting processes and outdated tools.
By streamlining repetitive activities like data entry and increasing the use of automation, organizations can see improved efficiency and simultaneously increase trust in accounting teams, processes, and data.
Building a Culture of Accountability
According to the U.S. Office of Personnel Management, organizations with a culture of accountability—an environment where employees take ownership of results—see improved employee performance, as well as a commitment to work, morale, and satisfaction.
These organizations also see greater trust internally, between both individuals and teams. How can organizations build a culture of accountability within the accounting function? It requires more than segregation of duties.
First, leaders must have an engaged view into who is performing what and when to more quickly identify errors and challenges, rebalance workloads, and most critically, offer support, including both constructive feedback and praise.
Second, individuals must be able to take real ownership of and have equal visibility into their tasks and activities, as well as performance standards and timelines for completion.
Start with Empowering Accountants
In an age when trust in public and private institutions is on the decline, organizations that can create and maintain trustworthiness have a tremendous competitive edge. It can be argued that establishing that trust starts with the numbers.
After all, for both internal and external stakeholders, it’s the numbers—not the brand, the boilerplate, or the press release—that deliver immediate and actionable insight. Numbers are the first tangible indicator of success and the first indicator of challenges to come.
“Unlocking the value of information and financial data is much more important than routine reporting, and if done well, a key competitive advantage,” says Tony Klimas, principal and Global Performance Improvement Finance Leader at EY.
“Yet many companies still haven’t implemented technology to enable this capability, despite the many advances in automation and cloud-based solutions, which reduce the required investment and time to implement. It is time for businesses to treat their financial data like an asset and invest in the technology, tools, and people to turn information and data into strategic insights.”
And if trust starts with the numbers, then organizations must prioritize improving the processes that enable trustworthy balance sheets. This means giving accounting professionals the technology that empowers them to simultaneously practice the core values of accuracy, efficiency, and transparency, and keep up with the ever-increasing pace of business.
Read this blog to discover how to bridge the trust gap between CFOs and their accounting and finance teams.