A recent survey by Gartner revealed that a third of accountants make several financial errors per week due to capacity constraints (yikes!). The survey of 497 individuals working in the controllership function was conducted in July 2023. Let’s explore these findings in depth, the implications these errors have on the accounting profession, and their recommended solution to mitigating accounting errors across the business.
Why Are These Accounting Errors Happening?
Accountants are known for being detail-oriented, methodical, and diligent but they are also human; according to the survey, 18% of accountants make financial errors at least daily, and over half (59%) make several errors per month.
Although there are many reasons why accounting errors occur, Gartner’s survey found that these errors were closely linked to low capacity, high workload, and insufficient automation. According to Mallory Barg Bulman, senior director of research in the Gartner Finance practice, these issues aren’t new to accounting teams. Demands on accounting staff capacity continue to rise as:
- 73% report workload increases over the last 3 years
- 82% say economic volatility has increased demands for their work.
- 42% had insufficient capacity to perform tasks effectively
- Only 29% of respondents felt that they had adequate automation tools to support their work.
The Impact
While accountants know how important it is to close the books accurately, unfortunately, the most common types of errors are data entry mistakes, calculation errors, and incorrect classifications. Bulman emphasizes the impact of these errors stating, "Financial errors can have tangible business consequences”. These consequences for the business can range from financial losses and reputational damage to regulatory penalties. Moreover, incorrect data and inaccurate financial statements resulting from these errors can lead to misguided business decisions, highlighting the critical need for error reduction within accounting processes.
What’s the Solution?
It’s not all doom and gloom. A striking revelation from the survey suggests that the key to effectively tackling these errors is by leveraging technology that is accepted by accounting staff. Gartner experts found that when users showed high adoption and acceptance of the technology they were using, they exhibited greater efficiency, realized capacity improvements, and made significantly fewer errors.
Technology acceptance, as defined by Gartner, is comprised of four essential elements:
- ease of use
- ease of learning
- customization capabilities
- comprehensive information availability
Companies prioritizing technology acceptance witness a remarkable 75% reduction in financial errors.
In Conclusion
Fluence has heard from thousands of accounting professionals over the years, and it’s clear from Gartner's findings that technology doesn’t (and frankly, shouldn’t) require a 1,000-page manual. It’s no secret that finance and accounting folks love and rely on Excel to support them throughout their close process – so who are we to break that sentimental and reliable bond?!
Fluence’s pure-cloud, financial consolidation and reporting solution embraces this approach by touting Excel at the front helm, making the tool user-friendly with a short learning curve. In addition to being out-of-the-box, our customers can customize templates and dashboards with ease so that only information they deem relevant is visible. Plus, it’s finance-owned, so you’ll need no assistance from your IT team when completing tasks like onboarding new entities or adjusting currencies.
Curious to see how our solution looks and feels? Peek through our video library or reserve some time with our team to learn how our customers navigate the Fluence platform so easily.
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
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