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The Automation Mirage: A Critical Look at Financial Closures

In the evolving landscape of corporate finance, the expectation of seamless automation continues to clash with the reality on the ground. A new study from Redwood Software unveils shocking statistics about the reliance on manual processes within financial operations. Despite the promise of technology, an astonishing 92% of Chief Financial Officers (CFOs) still depend heavily on manual efforts for their month-end closures. This phenomenon reveals a significant gap in achieving true automation, a situation that has been termed the “automation mirage.”

An Overview of the Findings

The recently published study titled 2026 R2R Efficiency Mirage by Redwood Software in collaboration with SSON Research highlights not only the existing reliance on manual input but also exposes executives' misconceptions regarding automation maturity within their organizations. Here are some of the striking findings:

• - A mere 2% of organizations have fully automated their closure processes from start to finish.
• - 97% of companies continue to rely on personnel for month-end financial closures, signaling a deep-rooted dependency on traditional methods.
• - Despite advancements, 92% of companies still allocate significant manual effort to the Record-to-Report (R2R) cycle, a clear indication that previous investments in automation tools haven't translated into meaningful change.
• - Furthermore, 71% of finance leaders claim they are more automated today than three years ago, yet 63% admit that over half of their closure operations remain manual.
• - A staggering 86% still conduct reconciliations using spreadsheets, proving that even with closure management platforms in place, the lack of true automation hampers efficiency.

Disparate Perceptions and Ground Reality

One of the most alarming insights revealed in the study involves the disconnect between executive perception and operational reality. While CFOs may feel confident about the level of automation based on dashboard views, many are unaware of the actual manual work driving these results. An analysis involving 88 shared services leaders indicated that 92% still exert considerable manual effort in their closure operations, yet many executives significantly underestimate the workload involved.

This disconnect necessitates urgent attention. It causes finance teams to be burdened with accelerating performance metrics while lacking the structural automation that could facilitate such growth. The enduring manual processes, which many assumed had been standardized and automated, have turned out to be labor-intensive and exhausting.

Consequences of Manual Processes

The implications of these findings extend beyond just operational inefficiencies. Many finance teams report severe stress during the closure cycle, with 80% indicating they often endure sleepless nights while meeting deadlines. This situation raises concerns around talent retention and overall job satisfaction, as skilled finance professionals become overwhelmed by the enduring manual workload.

According to the report, 93% of financial professionals coordinate their closure activities using checklists, spreadsheets, or basic tracking tools, highlighting a lack of effective orchestration in financial operations. This repetitive manual work takes away valuable time from analytical tasks that could drive better decision-making.

How Automation Can Transform Financial Closures: A Case Study

While many organizations cling to manual efforts, those utilizing Redwood’s Finance Automation are experiencing significant contrasts in automation success. The clients leveraging Finance Automation by Redwood, particularly through RunMyJobs, report automating over 90% of their R2R processes, dramatically improving efficiency and accuracy in their financial closures.

As a notable example, Forvia claims to have automated 32,000 journal entries monthly, which constitutes 80% of their total entries on a global platform. Moreover, Energy Transfer reported reclaiming 45,000 hours annually by implementing end-to-end R2R automation, indicating that the path to effective financial operations lies in embracing automation more fully.

Max Schultz, Managing Director of Redwood Software, encapsulates the vision for the future: “The future of finance is not about faster manual closures, but about contactless closures.” This fundamental shift towards orchestration over manual coordination enables finance teams to focus more on analysis rather than error rectification, leading to healthier organizational dynamics.

In conclusion, the 2026 R2R Efficiency Mirage report serves as a wake-up call for finance leaders. The insights gathered point towards the urgent need for structural changes in financial operations that prioritize full automation. Download the complete report here to explore benchmarks around automation maturity and the critical reliance on manual labor that currently plagues many organizations. Let us move towards a future where financial leaders can confidently step away from the legacy manual processes that are holding back their potential.