COVID-19 Forces Finance Transformation Back to the Top of the CFO Agenda
If, six months ago, we had tried to predict the biggest business continuity challenge likely to affect your organization over the coming year, I doubt if the current global health pandemic would have made the list. There is, of course, a tragic human cost to the COVID-19 pandemic. But as we adjust to the new status quo, businesses are also being forced to rapidly adapt to new ways of working, extraordinary workforce challenges and unprecedented levels of uncertainty and instability.
The impact on the finance function is not insignificant. And if there’s one thing that it has brought into sharp relief it is just how people-centric and manually-intensive many back end financial processes are.
The situation is a wakeup call to CFOs faced with the prospect of business as unusual. Virtually overnight, organizations have had to deal with new working practices, enforced remote working or even business closure. But the finance show must go on. So how do you execute a period close and other day-to-day finance team activities when faced with a lack of control over who is working, what they are working on, where they are working or even when?
Throw into the mix the fact that finance teams are suddenly faced with the addition of new tasks to support other departments and help secure the business on top of the already significant workload. You may, for example, be faced with a surge in volume on the supply and demand side of the business caused by refunds for cancellations of goods/services. As well as being this under pressure to furlough staff and manage the size of finance teams.
There are, in fact, many challenges that come with a forced remote month-end close, but finance autiomation can help prove the integrity of the numbers with less manual work. To learn more about closing the books in a pandemic, listen to the groundbreaking podcast featuring finance transformation expert, Adrian Li, interviewed by writer and editor Tony Hallett.
The new normal will undoubtedly include revised cashflow forecasts, financial planning, reforecasting and applications for Government-backed loan and job retention schemes that just a few months ago didn’t even exist. At this unprecedented time, the business is turning to finance for answers to questions that will help them shed light on the host of unknowns we all face.
Adapting to new processes and ways of working is critical to weathering this storm, in particular the ability to manage teams and interactions between team members to ensure that things don’t fall through the cracks. The last thing you need is for any of the numerous finance process handovers and handoffs to end up in a black hole due to lack of visibility about what’s going on.
At the same time, the shifting business goalposts will almost inevitably result in the need for new business processes. But having to make rapid changes is both challenging and risky; even if processes are documented, human nature dictates that workarounds are common. Having systems in place that offer end-to-end visibility of your financial processes, including audit trails, has never been more important.
For CFOs there’s a need for short-term tactical solutions to the challenges thrown up by the COVID-19 pandemic, But the crisis also shines a light on the more fundamental longer-term changes that will need to take place that many organizations have been putting off or stalled on.
Finance transformation is helping organizations mitigate some of these unforeseen challenges. Automation of finance processes removes dependency on people to perform the high-volume, repetitive activities that form the mainstay of their roles. Systems will scale to handle increases in capacity across specific activities. Meanwhile, higher value finance tasks can be executed remotely with workflows streamlining activities, regardless of where they take place.
An audit trail of activity gives all-important visibility and peace of mind. But perhaps more importantly, automating transactional elements frees up today’s finance team members to plan for tomorrow, whatever form that will take. In these uncertain times, that has never been more important.
Find out how to eliminate manual effort and support finance transformation with Redwood’s Finance Automation
About The Author
Shak Akhtar is the Senior Vice President of Finance Automation for Redwood Software. Cutting his teeth as an accountant at IBM before working for leading IT companies such as SAP®, BEA and iTwo, Shak Akhtar combines his abundance of financial and IT experience to fulfill his global responsibilities at Redwood Software. That includes spearheading the adoption of robotic process solutions by enterprises across their back office operations and chairing client led financial transformation workshops.