Two-fifths of chief financial officers do not trust the accuracy of their company’s financial data, making it harder to respond to market fluctuations and make strategic decisions, new research shows.

Confidence in cash-flow visibility remains stubbornly low, making it difficult for companies to respond to unexpected market changes, according to a survey for finance and accounting software company BlackLine. 

An emphatic 98% of survey respondents said they didn’t have confidence in their company’s cash-flow visibility, despite 37% saying that understanding real-time cash flow was critical for their company to deal with unpredictable market changes.

CFOs surveyed said one of the most important factors to respond to business disruption was the ability to access and analyse financial data in real time. But 37% said they didn’t completely trust their own data. Levels of trust are even lower for those closer to the numbers, with 50% of senior finance and accounting professionals saying they did not trust the financial data they were working with. 

Ian Pay, Head of Data Analytics and Tech, ICAEW, says: “Good-quality, well-managed data has to be central to keeping on top of cash flow in a rapidly changing society, particularly with the current fragilities of international trade and a cost-of-living crisis.”

And yet too many finance professionals still perform manual data cleansing and manipulation, which could and should be automated with relative ease, Pay says.

More than three-quarters (78%) of survey respondents said they were worried about the prospect of another global financial crisis, as well as cyber security and new disruptive technology, and their ability to respond quickly.

Almost a third (31%) of global respondents attributed their lack of trust in data to the myriad data sources, reliance on month-end spreadsheets and manual data collection, which is prone to human errors.

“As soon as you are looking at drawing on data from a range of sources, it can become a time-consuming, labour-intensive exercise if the appropriate pipelines and automations are not in place,” Pay says. 

BlackLine co-CEO Owen Ryan says that although overall in the past five years trust levels in cash-flow visibility have improved, confidence is not nearly as robust as it should be, “making it difficult for leaders to make fast, effective, data-driven decisions”.

He says: “Companies need to embrace modern, next-generation solutions that automate cumbersome processes, such as financial close, consolidation, invoice-to-cash and intercompany, and give them complete visibility and control over their financial data. These will be indispensable assets in navigating the terrain of the future and building resilience for future success.”

Kalle Soininen, Chief Finance Officer at customer service outsourcing provider CCI Global, says he is “exceptionally confident” in his company’s cash-flow data. This he attributes to “meticulous planning, transparent relationships with customers, vendors, and banks, along with the strategic use of cutting-edge technology”.

The BlackLine survey interviewed more than 1,300 C-suite and senior finance and accounting professionals in the US, Canada, UK, France, Germany, Australia and Singapore.