Will You Use ‘Gut Feel’ to Steer Your Way Out of Brexit?

Brexit isn’t the first tumultuous event to rattle global stock markets, and neither will it be the last, but the way companies respond could have a profound impact on their medium to long-term prospects. And if ever there was a case for a data-driven response, this is it. Those companies that are continuously sampling conditions, testing the temperature of the water and monitoring financial and non-financial KPIs will be making decisions from a position of knowledge and strength.

Research sponsored by BlackLine, FSN’s “Future of the Finance Function Survey 2016” (you can get your complimentary copy here), suggests that more than a third of CFOs will rely on gut feel.  The perils of decision-making based on gut feel were amply illustrated by the wild gyrations of global markets clearly wrong-footed by the UK’s decision to exit the EU.

That’s not to say that there isn’t a place for gut feel.  Experience is indispensable, but the optimum position is to meld what experience is telling us with real-time data.  But if the data isn’t on tap, if management does not have complete visibility of performance, then it has no choice but to rely on gut feel.  Over the next 24 months, organisations that are on top of their game will be using data to guide early insights and drive decision-making.  But how many organisations continuously have their ‘finger on the pulse’?

The research sheds light on this as well. Unfortunately, too many finance functions are bogged down by managing day-to-day accounting with commensurately less time available for analytics.  Over 50% of the 762 senior finance executives surveyed by FSN consider they spend too much time on transaction processing, 42% feel they spend too much time on management accounting, and 32% believe statutory reporting takes up too much of their time.

Those that have standardised and automated their reporting processes and can close their books quickly will be at a distinct advantage. Not only will they be able to view current performance in a relevant timescale but they will be able to leverage actuals reported in real-time to not only judge their current performance but also to predict their prospects for success in different market scenarios.  Nobody would pretend that predicting outcomes post-Brexit is going to be easy. After all, there are so many unknowns and indeed so many unknown-unknowns. But taking the guesswork out of the equation certainly reduces the risk.

If there is a silver lining to Brexit, it just might be the realisation that Continuous Accounting has come of age.

Written by

Mario directs BlackLine’s strategic vision and initiatives globally. He is responsible for developing partnerships and building out an ecosystem of key strategic alliances worldwide. Mario has worked alongside CEO Therese Tucker since 2004 and headed up the company’s EMEA (Europe, Middle East and Africa) operations, launched in London in 2013, for many years. Mario also led the company’s expansion into France and Germany with the opening of the BlackLine Paris office in 2015 and BlackLine Frankfurt in 2016. Under his direction, the BlackLine Financial Close Suite for SAP® Solutions became an SAP-endorsed business solution, joining the ranks of fewer than 40 other software offerings globally across all industries and categories.