With two-thirds of accountants making monthly errors, digitizing finance and accounting systems could alleviate pressure on overworked teams

Financial errors have tangible consequences on an organization, and the office of the CFO must look for solutions that help boost accuracy in financial reporting and analysis while also improving productivity to bridge increased workloads as a result of talent shortages.

In this blog, we will explore this research on financial errors, and where the solution lies for the office of the CFO – keep reading to learn more.

The current outlook

This report of nearly 500 accountants paints a stark picture that accounting mistakes are only on the rise and that this issue is likely a new one caused by excessive workloads and potentially an over-reliance on legacy systems to match.

Gartner reports that “While capacity issues aren’t new to accounting, demands on accounting staff capacity continue to rise. In the past three years, 73% of accountants report that their workload has increased because of new regulations, and 82% say economic volatility has increased demands for their work.”

They add that “If these financial and regulatory pressures continue to increase, as history suggests it will, the already limited capacity accountants will be stretched further and increase error rates.”

One area we see this demonstrated is in flawed audits, which surged to 6% in 2022 after rising 5% in 2021, showing that these issues are both historic and persistent.

Nearly three out of five accountants (59%) make several errors every month (18% make errors daily, and 33% weekly) presenting the case for new solutions to be found.

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What factors are leading to increased workloads for financial teams?

Financial teams can feel like they are being asked to do more than is possible with the tools they currently have, which is challenging when there is an increased need to re-forecast, plan, and budget with increased frequency, but less capacity.

• Global talent shortages - The American Institute of Certified Public Accountants (AICPA) found a decrease in the number of accounting graduates and an increased number of retirees which has had knock-on effects for future years. Many organizations are having trouble finding qualified accountants, which presents automation as a potential solution while the issue persists.
• Increased reporting compliance – Certain complex reporting compliance measures have recently come into place on top of usual financial close requirements, such as IFRS 16 or ESG reporting, placing an increased requirement on financial teams to have accurate reporting methods that can require some complex level of data consolidation.
• Large manual workloads – Organizations may still be using legacy systems like Excel, but these legacy systems cannot cope with the level of data consolidation that a modern enterprise needs, and as a result there can be a large amount of manual work that comes with this. Undoubtedly, financial teams can wain under the fatigue of these manual tasks.
• Pressure for financial strategy – Disruptions are becoming a common part of business, and there is a larger push for financial teams to form financial strategies and lead an organization with a future-proof strategy. This requires a level of financial planning and analysis, including increased forecasting frequency that can strain teams that are unprepared and ill-equipped.
• Poor collaboration – From reporting compliance to robust financial strategy, all these pressures require cross-functional collaboration for success. Those using legacy systems will struggle to overcome data siloes, version history, and other issues caused by legacy systems when trying to collaborate and find a single source of data truth.

How Unit4 can help you reduce financial errors

With an increased need to model scenarios, re-forecast, and use data for planning and analysis, and with capacity issues showing no sign of going away, CFOs must find new ways for their teams to alleviate workloads, improve productivity, and reduce financial errors.

Research has shown that organizations can reduce financial errors by as much as 75% by making the adoption of technology easy to use, learn, and customize.

Unit4’s finance and accounting tools provide the option to connect all your organizational data in one unified ERP platform – meaning a single source of truth provides the data visibility key to financial accuracy. This allows financial professionals to draw data from multiple functions into detailed reports in an accurate fashion.

Korn Ferry reports that “by 2030, there will be a global human talent shortage of more than 85 million people” highlighting that “the biggest issue isn’t that robots are taking all the jobs—it’s that there aren’t enough humans to take them.”

This points to automation as a solution to low productivity, rather than a replacement for staff. A recent report from Raconteur highlights that 96% of employees who used Generative AI found it increased their productivity.

AI can help increase the capacity to meet demand but also presents other benefits in that it reduces the time spent on manual data consolidation and entry that would occur in legacy systems. Finance teams can repurpose their time and energy to satisfy the requirement to form a strategy. Unit4 is exploring utilizing AI to help our customers communicate insights from their financial data more easily using AI-enabled finance tools along with smart assistance.

Talk to sales today and discover where AI can be used in your organization. To learn more about Unit4’s ERP and finance solutions and how we use AI, consult our website for more information.