The Finance Automation Challenge: 92% of Organizations Still Rely on Manual Processes Amid Automation Potential

The Increasing Automation Gap in Financial Processes

As organizations globally strive for more streamlined and efficient operations, recent research unveils a stark reality in the finance sector: a staggering 92% of organizations still heavily rely on manual efforts to complete their financial closes. Redwood Software, recognized as a leading orchestration platform, has shed light on this concerning trend in its report, "2026 R2R Efficiency Mirage."

Automation Potential vs. Reality

Despite substantial investments in close management and automation tools aimed at enhancing control and predictability, most finance leaders find themselves confronting a persistent issue — the manual execution of essential accounting tasks. The research indicates that while organizations have digitized oversight and visualization with dashboards, the actual operational work remains labor-intensive and manual.

In fact, 97% of the organizations surveyed indicated that people are still needed to finalize the close process. Alarmingly, only 2% reported achieving a fully automated end-to-end closing process, highlighting an 'automation mirage' that has organizations believing they are more advanced than they truly are. Leadership often overlooks this extensive manual workload, equating dashboard metrics with genuine progress.

Manual Efforts: The Core of the Problem

The 2026 R2R efficiency mirage further uncovers that 92% of organizations are entangled in significant manual tasks within their record-to-report (R2R) cycles. Although 71% of respondents claim they have improved their automation efforts over the last three years, 63% admit that a majority of the closing procedures still depend on manual inputs.

This disconnect demonstrates that even with advanced close management systems in place, many organizations still find themselves executing critical functions—such as journal entries, reconciliations, and accruals—manually. For instance, 84% of participants identified journal entries as the largest contributor to manual effort in finance closures, highlighting an urgent need for a reassessment of current practices.

The Burning Consequences of Manual Closures

The reliance on manual processes not only causes inefficiency but jeopardizes the capacity of finance teams to produce timely and accurate financial reports. An overwhelming 80% of finance personnel report extended hours during close periods, with many processes susceptible to bottlenecks when key staff are unavailable.

Moreover, 93% are still coordinating closing activities using checklists, spreadsheets, or emails—tools that lack genuine orchestration and contribute to operational fragility. This heavyweight nature of manual processes creates burnout among finance teams, whose energy and time could be more wisely spent on analysis and strategic decision-making.

A Shining Example: Redwood Customers' Transition to Automation

In contrast, despite the industry-wide trend of dependency on manual execution, selected clients of Redwood Software are paving the way with significantly reduced manual workloads. By leveraging Redwood's Finance Automation and RunMyJobs platform, these organizations have witnessed substantial improvements. Customers report achieving up to 90% automation coverage for their R2R processes, which dramatically lessens the burden of manual tasks.

For example, the client Forvia automated approximately 80% of their journal entries, totaling around 32,000 entries monthly. Another customer, Energy Transfer, not only automated nearly 3,000 journal entries each month but also streamlined reconciliation processes, transitioning from an hour-long task to mere minutes while recovering around 45,000 hours per year.

The Future of Finance: Moving Towards Orchestrated Automation

As Max Schultz, Group General Manager at Redwood Software, aptly stated, the future of finance is not simply about speeding up manual procedures but rather achieving a fully touchless close. By transitioning from manual coordination to strategic orchestration, finance teams can focus their efforts on insights and strategic planning—a necessary evolution for any forward-thinking organization.

Ultimately, the findings of Redwood's report illustrate an urgent and solvable gap in the finance landscape that, with the right tools and understanding, organizations can overcome. By acknowledging this gap and implementing structured financial orchestration, businesses can redefine what efficiency truly means in their finance departments.