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The Automation Challenge for CFOs: A Deep Dive into Financial Processes

In the world of finance, automation is often heralded as the key to efficiency and accuracy. Yet, a recent study by Redwood Software titled "2026 R2R Efficiency Mirage" shines a spotlight on a troubling reality: an astonishing 92% of CFOs still rely significantly on manual processes during financial close despite having access to various automation tools. This reliance unveils a striking execution gap that many organizations face on their journey toward becoming autonomous enterprises.

The Automation Landscape

Redwood Software, a leader in orchestrating autonomous business processes, highlighted through its report that while many CFOs have invested heavily in closing management and automation tools, very few have achieved comprehensive automation. Of the businesses surveyed, only 2% report having a fully automated end-to-end closing process. This indicates a widespread presence of what the report describes as an "automation mirage" in finance.

Instead of reaping the benefits of automation, finance teams often find themselves entrenched in manual tasks, which not only hinders efficiency but also compromises the predictability of financial results. The stark contrast between the perceived automation maturity and the operational reality is astonishing.

Key Findings from the Study

• - Human Dependency: A staggering 97% of companies continue to depend on manual effort for their financial closing processes, effectively demonstrating a deeper reliance on manual intervention than anticipated.
• - Existing Manual Efforts: Despite ongoing investments, 92% still report considerable manual effort in their Record to Report (R2R) cycles.
• - Perception vs. Reality: 63% acknowledge that a significant portion (over half) of their financial close processes still occurs manually. This discrepancy between executive expectations and ground-level realities suggests a concerning gap in understanding and execution.
• - Utilization of Tools: Even with advanced closing management platforms available, 86% continue to reconcile using spreadsheets.
• - Manual Coordination: An overwhelming 93% manage closing activities manually or through basic tracking tools, indicating a lack of structured orchestration in their processes.

A Disconnect in Executive Understanding

Interestingly, there exists a perception gap among executives regarding the true extent of manual workload in their organizations. A survey of 88 Shared Services Leaders revealed that 51% believed executives underestimate the scope of manual tasks involved in financial closing. This lack of awareness puts pressure on finance leaders to deliver faster results without the necessary enablement of structured automation.

The Cost of Manual Processes

The continued reliance on manual processes brings financial, operational, and personnel challenges. For instance, 80% of finance teams report long nights spent during close cycles, while 68% experience bottlenecks when key personnel are unavailable. The use of checklists, spreadsheets, and emails for coordination indicates an absence of effective orchestration, ultimately consuming time that could be better spent on analysis and strategic decision-making.

Innovations from Redwood Customers

While many companies are still struggling with manual processes, customers utilizing Redwood's Finance Automation technology are showcasing the potential of structured orchestration. Some highlights include:

• - Companies report achieving automation coverage of over 90% across various R2R processes.
• - Forvia, a Redwood customer, automated 32,000 journal entries monthly, which drastically reduced manual input times from hours to minutes.
• - Energy Transfer, also utilizing Redwood's solutions, saved 45,000 hours annually through complete R2R automation.

Looking Ahead

As Max Schultz, Group General Manager at Redwood Software, asserts, “The future of finance lies not in faster manual closings but in seamless, touchless processes.” The aim should be to transition from merely managing the closing process to mastering it through orchestration that replaces manual coordination with autonomous execution. This evolution not only frees up finance teams to focus on insights rather than error correction but also ensures that organizations remain agile and responsive to their growth demands.

Conclusion

The 2026 R2R Efficiency Mirage study serves as a clarion call for financial institutions to recognize the importance of fully embracing automation. Companies must acknowledge the gap between their perception of automation maturity and the actual execution on the ground. Only then can they successfully harness the benefits of automation to enhance efficiency, reduce manual workload, and ultimately drive better financial outcomes. You can access the detailed report for additional insights here.

For those organizations looking to leverage automation effectively, Redwood Software remains an essential partner in the journey towards financial excellence.