The Financial Automation Gaps: Why 92% of CFOs Still Rely on Manual Closings

In today's fast-paced financial world, the role of automation cannot be overstated. However, a recent study titled "2026 R2R Efficiency Mirage" by Redwood Software has revealed a startling finding: an overwhelming 92% of CFOs still rely on manual efforts for their financial closing processes. As automation technologies become increasingly available, this reliance raises questions about efficiency in financial operations and highlights a significant gap that many organizations have yet to overcome.

The Current Landscape of Financial Closures

Despite years of investment in various automation tools and systems, only 2% of organizations have achieved a completely automated financial closure from beginning to end. This lack of full automation indicates a pervasive 'automation mirage' problem within many corporate finance departments. While executives often visualize a tech-enabled future, the reality is that many organizations still depend heavily on manual tasks for core financial processes.

Data from the study shows that while there has been digital transformation in oversight and control, the actual execution of financial tasks continues to be manual. In fact, 97% of organizations still rely on human involvement to complete their financial closures, and a staggering 86% still perform reconciliations using spreadsheets, indicating that many firms have only scratched the surface regarding financial automation.

The Disconnect Between Management and Reality

Perhaps even more alarming is the discrepancy between executive perceptions and operational realities. The study highlights that while 71% of finance teams believe they are more automated than they were three years ago, around 63% admit that over half of their closing processes remain manual. This disconnect creates a pressure on team leaders to enhance performance without the structural automation that could support their efforts.

Management often is unaware of the substantial manual workload their finance teams are handling. This 'blind spot' can lead to unrealistic expectations from executives who might be under the impression that financial interactions are already streamlined via automation. Compounding this issue, 80% of finance teams report long hours during closing cycles, and 68% find that processes can stagnate when key staff members are unavailable.

Challenges of Manual Financial Processes

The persistent manual involvement in financial processes leads to increased workloads that contribute to burnout among finance staff. Activities deemed automated, such as journal entries, adjustments, and reconciliations, remain largely manual, which deprives finance professionals of time they could use for decision-making and analysis. With 93% of organizations still coordinating closures through checklists, spreadsheets, or emails, the actual orchestration of these activities is virtually non-existent.

The Role of Automation in Transforming Financial Closures

Interestingly, Redwood's financial automation clients illustrate a promising contrast to these findings. Organizations utilizing Redwood's Finance Automation solutions report achieving over 90% automation in their R2R processes, a striking comparison to the broader industry landscape. For example, Forvia managed to automate around 32,000 monthly journal entries, reducing their manual workload significantly.

Energy Transfer, another client of Redwood, reported saving 45,000 annual hours by completely automating their R2R processes. According to Sabari Swaminathan, Energy Transfer's Associate Vice President of Corporate Enterprise Systems and Automation, adopting Finance Automation allowed them to streamline their financial processes in a way that was previously unimaginable, moving from manual coordination to fully orchestrated execution.

As Max Schultz, Director General of Redwood Software states, "The future of finance does not lie in accelerating manual closures but achieving a fully automated closure that frees up human potential across the financial record to report cycle."

Conclusion

The insights from the "2026 R2R Efficiency Mirage" report underscore the urgent need for financial organizations to reevaluate their processes. Many still struggle under the weight of manual tasks, which hampers their ability to adapt to a rapidly changing business environment. Beyond just digitizing oversight, a true transformation involves embracing automation across all financial functions, allowing finance teams to focus on providing valuable insights rather than managing cumbersome processes. The report indicates a clear roadmap for improvements in financial automation, revealing a future where finance teams can thrive in a less manual, more strategic operational landscape.

To access the detailed findings and comparative data on the state of financial automation, download the complete report here.

About Redwood Software

Redwood Software is a leading orchestration platform that enables organizations to accelerate their digital transformation with minimal total cost of ownership. Providing intelligent automation and orchestration solutions for complex ERP systems, Redwood empowers companies to unleash human potential and concentrate on innovation and growth. Trusted by over 50% of Fortune 50 companies, Redwood continues to lead the charge toward autonomous enterprises.