The survey leading up to last years’ Mistrust in the Numbers report discovered that a shocking seven out of every ten F&A leaders surveyed believed they had made significant decisions based on flawed data. The pervasiveness of the issue was surprising, and we wanted more information about how frequently these bad decisions are made and how they impact overall confidence in the industry.
We followed up by commissioning a survey of over 1,500 finance and accounting professionals. We discovered that, while executives expressed a great deal of confidence in their current abilities and readiness to tackle an increasingly competitive landscape, these data missteps happened fairly regularly.
For instance, when asked about their future preparedness, 77% of SVP+ respondents surveyed felt their teams were well-prepared to take on future challenges, including rapidly-evolving business complexity, such as managing mergers and acquisitions, new products, and ERP upgrades.
They also reported a high degree of confidence in their ability to identify errors before reporting results. Nearly 67% of SVP+ respondents agreed or strongly agreed that identifying financial errors before reporting results is never a problem for their company.
However, despite a high degree of confidence in both their current ability to catch errors and their ability to grow and evolve with the times, F&A leaders reported making decisions based on bad data on a regular basis. In fact, nearly 60% of SVP+ respondents agreed or strongly agreed that their organizations routinely made decisions based on incorrect or incomplete data.
According to our experience working with a multitude of clients within this space, data doubts can be put to rest when organizations start asking these questions.
Is my team empowered to identify and surface data problems?
What are you doing to create a culture of continuous improvement and strategic thinking, rather than asking skilled accountants to chase the close every month, putting out fires as they go? This shift in mindset increases the likelihood that incorrect data will be found and corrected before it influences business-critical decisions.
Rushing to complete the close creates a chaotic work environment and intense time pressure—a cycle of working like mad and then recovering. Your front-line accountants may want to go back to double-check something that didn’t seem quite right when there’s time, but there’s never time, and then the cycle begins again.
Conversely, adopting a Continuous Accounting practice transforms the way accounting and finance teams work by marrying automation, control, and period-end tasks within their daily workflows. Analyzing smaller subsets of data on a regular basis allows your team to identify and adjust incorrect data in real time.
Have we automated everything we can?
Improving legacy processes and automating rote tasks with technology unleashes strategic accountants to pull the story from the numbers instead of spending time on data collection and entry or tracking the close.
This automation decreases the likelihood of human error. It frees your highly skilled accountants to focus on reviewing exceptions and meeting the expectation of providing accurate, real-time financial data at any time during the month.
Where can we increase visibility into financial metrics?
Accountability and trust in reporting require real-time data visibility and strong controls across all your data**.** Process automation, for example, allows you to apply controls across all processes adjacent to the data. That level of control is difficult if your data traverses multiple departments or accounting organizations along the way.
Something like loading GL data from an ERP system into a spreadsheet creates risk, because every time the data moves, something could change. Controls for validating and substantiating data are essential if F&A leaders want to put these data headaches to rest for good.
Read the full Capstone Insights report to learn more about how your F&A team compares to their peers.