IT Brief New Zealand - Technology news for CIOs & IT decision-makers
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CFOs' confidence in cashflow visibility remains low
Tue, 6th Feb 2024

The annual survey released this week by the digital finance transformation leader, BlackLine, reveals that confidence amongst CFOs in terms of cashflow visibility and the accuracy of their organisation’s financial data stubbornly remains low. Results indicate that only 2% of CFOs have full confidence in their organisation’s view of cashflow, a figure that hasn’t improved in the last year.

Despite signs of economic recovery at a global level, the circumstances for many businesses and industries are far from stable. Irrespective of this, cashflow visibility, which is crucial for the financial resilience of businesses in the short and long term, is in short supply. A shocking 98% of CFOs confess they could be more confident about their current insights into the company's cashflow.

More than half of those surveyed (52%) state their scant visibility on cashflow gives rise to concerns they might be making decisions based on inaccurate or outdated information. Almost half (46%) admitted it causes them to worry whether the organisation can remain competitive over the next 12 months. A significant 38% acknowledged that perceiving cashflow in real time will be essential for their company’s capacity to handle unpredictable shifts in the market.

What are the disruptions causing most concern? These include another global financial crisis (85%), cybersecurity issues (82%), and disruption due to technology (82%). This information is based on a global survey of more than 1,300 executives and senior personnel in the Finance & Accounting sector. BlackLine has been monitoring the level of trust that leaders in Finance & Accounting place in the financial data used for reporting by their companies over a five-year period.

Nearly 40% of CFOs do not completely trust the financial data of their organisations, a fact which creates challenges for strategic decision-making during a period marked by multiple external challenges. Confidence in the visibility of cash flow also continues low, which affects the ability of organisations to respond to unexpected changes in the market.

Owen Ryan, co-CEO of BlackLine, stated, “Trusting the data organisations work with is crucial for effective decision-making, not just for the CFO’s office but for the entire business ecosystem. This trust is particularly important when it comes to dealing with external events that are tough to predict or control. We’ve been tracking confidence and trust in financial data for the past five years, and whilst trust levels have begun to improve, the bottom line is that trust is still not nearly as robust as it needs to be. This lack of confidence affects the ability of leaders to make swift, effective decisions based on data.”

He added, “When we examine what is undermining confidence in financial data, we find time and again that ineffective, manual processes are the problem. Businesses have invested in technology solutions in recent years, including emerging forms of AI, but it’s apparent that many are still dependent on manual processes for a significant portion of finance and accounting work. Companies need to embrace contemporary, next-generation solutions that automate cumbersome processes, such as financial close, consolidation, invoice-to-cash, and intercompany, and provide them with complete control and visibility over their financial data. These tools will be indispensable assets in navigating the future landscape and building resilience for future success."