The R2R Efficiency Mirage: Why Finance Automation Isn’t Delivering
Despite significant investment in automation tools, a vast majority of finance organizations are still heavily reliant on manual processes for their record-to-report (R2R) cycle. New research reveals a disconnect between perceived automation and operational reality, highlighting what experts are calling an “automation mirage.”
The Illusion of Automation
A recent study released by Redwood Software™ and SSON Research & Analytics, titled “2026 R2R Efficiency Mirage,” found that only 2% of organizations have achieved a fully automated end-to-end close process.1 This finding exposes a critical gap between CFO expectations and the actual state of finance operations.
Key Findings from the 2026 R2R Efficiency Mirage Research
- 97% of organizations still rely on people to complete the close process.1
- 92% continue to carry significant manual effort in their R2R cycle, despite years of investment in close management tools.1
- 71% believe they are more automated than they were three years ago, yet 63% admit that more than half of the close remains manual.3
- 86% still reconcile data in spreadsheets, even when close management platforms are in place.1
- 93% coordinate close activities manually or through tracking-only tools, lacking true orchestration.1
The Perception Gap
The research indicates a significant disconnect between executive perception and operational reality. Leaders often overestimate the level of automation due to visibility into dashboards and approvals, while global process owners and finance operations teams continue to grapple with manual tasks like preparing journals, calculating accruals, and reconciling data.1 This misperception puts pressure on teams to accelerate performance without addressing the underlying structural issues.
Where Manual Effort Remains Concentrated
Despite tool investments, critical closing activities remain largely manual. The most significant manual burdens lie in:1
- Journal entries (84% report significant manual effort)
- Reconciliations (69% report significant manual effort)
- Accruals (67% report significant manual effort)
The Consequences of Manual Processes
Reliance on manual execution leads to unpredictability, scalability issues, and increased strain on finance teams. 80% of finance teams report working late during the close cycle, and 68% experience bottlenecks when key personnel are unavailable.1 This ultimately detracts from the time finance professionals need for analysis and strategic decision support.
Moving Towards a Touchless Close
According to Max Schultz, group general manager at Redwood Software, the future of finance lies in achieving a “touchless close” – a fully orchestrated, always-on process that eliminates manual effort and unlocks human potential.1 This requires a fundamental shift from managing the close to mastering it through orchestration and autonomous execution.
Customers utilizing Finance Automation by Redwood have demonstrated significant improvements, including automating up to 90% of R2R processes and reducing reconciliation times from hours to minutes.1
Access the Full Study
The “2026 R2R Efficiency Mirage” study provides detailed benchmarks on automation maturity and the perception gap within finance organizations. The full study can be downloaded here.4