Finance and accounting professionals lack confidence in data

21 February 2021 Consultancy.com.au 4 min. read

Covid-19 has turned up the heat on finance and accounting professionals, and few are equipped with the right tools to manage the pressure. A new BlackLine study presents the key challenges facing the segment. 

BlackLine’s analysis is based on a survey conducted by independent research firm Censuswide among 1,300 C-suite executives and finance and accounting professionals across middle and large firms globally. Around 150 of these business leaders are based in Australia.

Against the backdrop of an economic crisis, finance and accounting professionals appear to be burdened with a core challenge facing the business environment – providing an accurate picture of company performance without any precedent for a pandemic response or forecast for a post-pandemic world.

Challenges anticipated in 2021

A third of finance and accounting professionals are facing more pressure than ever since the pandemic, while a similar figure feels obligated to meet these responsibilities without any extra tools in hand. In focus here is the sheer scale of change over last year.

Take working arrangements, for instance. Going into 2021, many businesses are considering hybrid working models – a combination of virtual working and coming into the office. For finance professionals, remote working spells a direct increase in compliance and fraud risks, calling for a host of new governance mechanisms.

Then there is the risk of collaborating with third-parties, which are facing their own concerns around compliance. Perhaps the biggest challenge here is the lack of adequate data capabilities – an issue reported by nearly 30% of respondents.

How much confidence do you have in the accuracy of financial data

“At a time when strategic decisions must be made fast—often to solve challenges that have no precedent – agility and access to data is critical,” explained Marc Huffman, CEO at BlackLine. Finance and accounting professionals fear that they simply cannot provide data at the speed and accuracy required in a crisis.

In fact, these professionals have little trust in their own data, particularly when compared to other C-suite executives. BlackLine conducted a similar study in 2018 – when over 70% of C-suite executives reported complete trust in the accuracy of their financial data. For finance and accounting professionals, this figure stood at less than 40%.

Today, faith is notably lower across the ranks. Around 56% of C-suite executives now trust their financial data, backed up by only 30% of the finance & accounting team. The analysis features input from top leaders at Big Four accounting and advisory firms – who suggest this scenario is far from sustainable.

“Poor visibility over financial data represents an unnecessary level of risk for many large organisations,” explained Ralph Canter, Advisory Managing Director at KPMG. “Not only could it mean that strategic decisions are based on inaccurate numbers, but there are also repercussions of failing to comply in an ever-expanding regulatory global business environment.“

Digital is key

According to Tony Klimas, Global Performance Improvement Finance Leader at EY, the pandemic has exposed key gaps in finance and accounting practices around the world. At the same time, such a foundational upheaval also presents “an opportunity for executives to reimagine the finance function.”

What are the main digital investments planned for 2021

Technology is key here – a fact that most finance professionals appeared to have recognised. More than a third want their company to invest in data analytics capabilities this year, for better data. A remarkable share also put their faith in automation.

Be it financial reporting, governance, planning, analysis, budgeting or forecasting, between 35% and 40% of professionals believe that automation has a key role to play. Just over a third also recognise that having more talent with the right skills will ease some of the pressure on the finance function, enabling more value-adding output.

For Tom Toppen, Managing Director at Deloitte, this is the right way to go. “Just as companies have recognised that technology is necessary to support virtual meetings and conferences, they should also recognise the value of implementing technology that allows these teams to seamlessly access systems remotely, reduce manual processes, and ultimately improve the visibility and accuracy of financial data.“