4 Benefits of R2R (Record to Report) Automation in 2024

The record-to-report (R2R) process is essential for finance teams to produce accurate and timely financial statements. However, manual R2R processes are inefficient, error-prone, and limit visibility into financial data.

Automating the R2R process is becoming a priority for forward-thinking finance leaders. Research shows organizations can realize major benefits by implementing R2R automation, including:

1. Drastically Improved Accuracy

Manual R2R processes inevitably lead to errors that distort financial reporting. Common issues include:

  • Incorrect journal entries due to typos or misstatements that risk material misstatements in the financials.

  • Missed transactions that never get recorded properly. Research shows the average organization misses logging 4% of its transactions.

  • Spreadsheet errors like broken formulas or links that produce incorrect numbers. Studies estimate up to 88% of spreadsheets contain errors.

These errors propagate through the R2R process, resulting in inaccurate financial statements. But R2R automation software can reduce errors by 95% or more, per customer-reported figures:

  • Trintech Cadency reduced financial close errors by 95% at Dixons Carphone
  • BlackLine found 98% accuracy for one customer’s automated intercompany accounting
  • Softrax achieved 99.7% matching accuracy across 450,000+ transactions after automation

By automatically compiling data across systems, reconciling accounts, and handling calculations, R2R automation leaves little room for human error.

2. Accelerated Financial Close Process

The financial close remains one of the most cumbersome steps in the R2R process. Companies relying on manual processes typically require at least 10 days to close the books. But R2R automation can cut that time dramatically:

  • Workiva customers report closing books in just 1-3 days with R2R automation
  • Logi Analytics reduced monthly close time from 10 days to just 3 days
  • Blackline customers shortened the financial close process by up to 50%

With R2R automation, finance teams no longer waste time on manual consolidation and reconciliation tasks. That accelerates access to final month-end numbers for reporting and planning.

3. Unified Visibility Across All Financial Data

Organizations often have financial data trapped in disconnected systems, spreadsheets, and paper records. This makes it extremely difficult to get accurate reporting and transparency into the numbers.

R2R automation consolidates all that disparate data into a single source of truth. This provides:

  • Real-time reporting with up-to-date numbers from across the business
  • Drill-down analysis to understand and investigate the data
  • Centralized control over all ledgers and subsidiaries
  • Audit trails for tracing activity and changes

In its first year after implementing BlackLine, one organization reduced the time required for audits and compliance by 25%. The unified financial data gave auditors and managers the visibility they needed.

4. More Strategic Finance Team

R2R automation liberates finance staff from monotonous manual processes. Automation handles many of the routine reconciliation, consolidation, reporting and approval tasks finance staff traditionally performed.

This enables the finance team to focus on more strategic initiatives like:

  • Data-driven analysis and insights for FP&A
  • Process improvements and control monitoring
  • Advisor role to guide business leaders

According to the Institute of Finance and Management, R2R automation solutions save accountants:

  • 45% of time spent on consolidations
  • 60% of time spent on reconciliations
  • 55% of time spent on month-end close

That translates to over 50% of an accounting team‘s time that can be redirected. Leading organizations are using this efficiency gain to build more effective and influential finance teams.

Comprehensive R2R automation platforms bring together a set of integrated technologies:

Intelligent transaction matching – Automatically reconcile high volumes of transactions without human intervention

Auto journal entries – Securely upload external files or feed data to book journal entries automatically

Account reconciliations – Reconcile accounts like bank, credit card, and intercompany in just a few clicks

Consolidations – Consolidate results across business entities and global subsidiaries

Reporting and analytics – Central reporting workbook with audit trails and drilldown

Workflow – Assign tasks and track status of approvals on a user-friendly dashboard

These technologies work cohesively to fully automate the entire R2R process from end-to-end. The leading solutions make R2R automation accessible even for organizations with limited technical expertise or resources.

Transitioning from manual R2R processes to automation can transform the efficiency and effectiveness of accounting teams. But organizations need an implementation approach that ensures adoption success.

Here are best practices I recommend based on experience automating R2R processes with clients:

  • Get executive buy-in – Demonstrate the ROI and strategic impacts
  • Map out current processes – Identify top priority areas for automation
  • Start with a limited pilot – Prove out the technology on targeted pain points before expanding
  • Phase in gradually – Don’t try to change everything overnight
  • Maintain open communication – Continuously get user feedback during transition

With the right approach, R2R automation can help accounting teams minimize manual work, while optimizing accuracy, speed, visibility and control over financial data. The benefits for both finance departments and the overall business are too substantial to ignore.