42% of finance leaders don’t trust their own data, says BlackLine survey

While data is increasingly important in today’s business world, a significant chunk of finance leaders don’t entirely trust what comes from their own organizations.

Accounting solutions provider BlackLine found that 42% of leaders said they “do not completely trust the accuracy of their organization’s financial data.” As for why, about 31% of respondents indicated the data comes from too many sources, meaning they cannot be sure all the data is being accounted for. BlackLine also found that people are wary of manual processes, which increases the risk of human error, as well as a reliance on clunky spreadsheets. BlackLine noted that, since 2020, reliance on spreadsheets has consistently been listed among the top three reasons people don’t completely trust financial data.

“Trusting the data organizations work with is a critical pillar of effective decision-making, not only for F&A departments, but for the entire business ecosystem, especially when dealing with unforeseen events,” said Owen Ryan, co-CEO of BlackLine. “It is essential to consider the ‘why’ behind this trust divide.”

The amount of trust does vary from country to country. The U.K., France and Canada were found to be especially skeptical of their own organization’s data — 56% of British and Canadian leaders, as well as 51% of French leaders, expressed sentiments along these lines. Germany and the U.S. had higher levels of trust in their data, 36% and 34% respectively.

The BlackLine report noted that while many do not trust their own organization’s data, it is a slightly smaller proportion than before. Compared to the previous year, the proportion of executives who said they completely trust the accuracy of their organization’s financial data increased by 7%.

“This rebound in trust signals a positive trajectory that we hope will continue,” said Ryan. “That said, variations in trust levels across different organizations and regions emphasize that while some have successfully addressed trust issues in their financial data, others are still grappling with them.”

The BlackLine survey polled 660 C-level and 679 F&A professionals in seven markets (U.S., Canada, U.K., France, Germany, Australia, and Singapore).

The results call to mind the results of a survey from 2016, which found many corporate finance leaders don’t trust data coming from others’ organizations either. The poll of about 400 public and private company CFOs found that when they look at another business’s earnings report, they believe there’s a decent chance those numbers have been manipulated. Specifically, poll respondents were asked what percent of companies, in any given year, are misrepresenting their economic performance. The average overall answer was about 20%, though when looking at private company CFOs only that guess jumps to 30%. When asked to estimate the scale of these manipulations, CFOs believed that misrepresentations accounted for 10 cents out of every dollar of reported earnings figures from these companies.