3 Ways to Overcome Finance and Accounting COVID Challenges
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Since the onset of COVID, finance and accounting teams are accelerating their digital transformation. They’re adapting to compliance and risk mitigation requirements. And they’re under further pressure to streamline operations through efficiency gains - including the use of modern financial consolidation software.
These new forces are leading finance and accounting teams to update their people, processes, and technologies. But they also offer new opportunities for your operational expenses and bottom line.
How can you ensure that your business is well positioned to deal with such changing needs? The answer - and opportunities - lie in three distinct areas:
- Digital transformation for smarter business decisions
- A single source of trusted data to mitigate risks and streamline operations
- Regulatory compliance to provide transparency to a changing marketplace
As you’ll see, investing in financial consolidation software is a wise investment to deliver on all three fronts.
Both from a customer and employee-centric point of view, digital transformation reinforces the need for:
- Automating manual, error-prone, and labor-intensive processes
- Fast adoption among changing conditions - not just to survive but to thrive
- Streamlining operations while still delivering on targets
Before COVID, business leaders first wanted proof that digital transformation would be successful before investing. Since COVID, it’s become a matter of survival.
Today, 69% of business executives say COVID has accelerated their organization’s digital transformation strategies. Furthermore, 6 out of 10 say that an increase in digital transformation helped improve their operational excellence.
Adopting digital tools and having the right financial consolidation software in place will directly improve your efficiency and streamline operations. Having a consolidation system in place will automate processes and error-prone operations that are typically done manually.
As a mid-sized business in an ever-changing landscape, financial consolidation and reporting tools are a quick way to help you gain an edge on the competition. In particular, they’ll free up your finance team’s time to focus on achieving revenue and growth targets.
As a COVID-era finance leader, the advantages of digital transformation are obvious. But you’ve also got to mitigate risks while streamlining operations.
Balancing Risk Mitigation and Streamlining Operations
In the face of COVID, mid-sized organizations should invest in mitigating risks by strengthening their compliance, risk management, and internal controls. Combined with streamlining operations, tackling these challenges is a balancing act to be sure.
How to overcome them can come down to two key factors:
- Building a single source of truth with trusted data and controls
- Connecting directly to your transactional data
A Single Source of Truth and Controls
Having trusted financial data at your disposal will enable both sound business decisions and effective risk management. Both are especially important to mid-sized companies that may not have consolidation and risk management systems in place.
Both also depend on a single source of truth with the right controls in place.
A single source of truth - a repository of reliable financials - means you can deliver trusted:
- Financial reports for your management, investors and other stakeholders
- Management reports to inform the best possible business decisions
With a single source of truth, the next step is establishing proper controls.
- Who can input what data?
- What’s the workflow from data input to approved reporting?
- What are the variances that raise red flags?
Modern financial consolidation software gives you such controls.
The result? Your business leaders can make confident decisions based on trusted data. Thereby basing risk management and strategic business decisions on numbers that are accurate and up-to-date.
All of which leads to our next topic - connecting your financial consolidation software directly with accounting, ERP, and other transactional data.
Connecting Directly with Your Data
Being able to pull data directly from your general ledger (GL), ERP software, and other data sources is essential to a single source of truth. Consolidating actuals from their source ensures you’re making decisions based on reliable, up-to-date numbers.
Like controls, direct data integration is a must-have of modern financial consolidation software.
Consolidation software also delivers the guaranteed benefit of streamlining your finance and accounting. By automating manual tasks, you’ll eliminate the time and error so common with consolidations at mid-sized businesses today.
You’ll produce more accurate financial reports faster - an upward of 90% faster. And in the process, guide smarter business decisions.
Planning for Change and Regulation Compliance
If you’re like most mid-sized companies, you probably didn’t have a risk management plan in place to account for a pandemic like COVID. Even among those who did, few if any, could have predicted COVID’s full toll impact.
Across regions, departments, and levels of management, COVID represents the ultimate of “unknown unknowns.” And for businesses of any size, such unknowns spell risk - both:
- Internally on making the best business decisions you can
- Externally through the lens of regulatory compliance
Looking at decision making and risk management under COVID, Gartner reveals that senior executives cited the following top concerns in the last quarter:
- Preparing for the second wave - one that’s already underway
- The new working model - from divesting property to digital transformation
- Managing a remote workforce - for health, collaboration, and factors
The Second Wave and Adapting to Changing Conditions
As cases continue to soar globally, the impacts of a second wave of the pandemic are understandably a top concern for most businesses. If you’re not already, you should be actively establishing risk-management protocols
The volatility of the times means that successful organizations are those who continually assess, monitor, and plan for changing situations with scenario planning.
Ideally, you should be ready to implement differential models with regards to the working environment. For example, ensuring that when employees return to work in a re-entry scenario, they feel supported and guided, with regards to how to act when returning on site, to ensure the safety of all.
To plan for a return to “normal,” managing remote employees should be high on your radar. The sharp rise in remote work means that you will need to be prepared for the changing norms that accompany this, including employee disengagement and miscommunication.
How can you make sure your talent feels engaged in remote-working scenarios?
- Ensure that your employees feel a high level of trust in the organization
- Gain employee feedback on satisfaction regarding your organizations response to the pandemic
- Give your employees the tools to effectively communicate, collaborate and work remotely
Ultimately, ensuring that employees feel engaged will ensure that they remain productive, cohesive, and committed to your business - in spite of changes in their work environment.
Regulatory Compliance Considerations
Regulatory reporting compliance is a going concern for most mid-sized organizations. Especially if they’re growing globally - either through expansion or M&A activities.
Most growing companies will eventually find themselves dealing with more rigorous reporting regulations and different regulatory frameworks. Whether it’s IFRS (International Financial Reporting Standards) and/or GAAP (Generally Accepted Accounting Principles), getting regulatory reporting right is essential.
Where management reporting guides smarter decisions on the part of your board and management, regulatory financial reporting does the same for external stakeholders. Timely and accurate financial reports provide the marketplace with much-needed transparency and a level playing field on which to base investment decisions.
Through controls, a single source of truth and built-in compliance checklists, financial consolidation software ensures your financial reports are always accurate and up-to-date. And your business is delivering the transparency the market needs.
Regulatory Compliance and COVID
Part of the transparency financial reports need to provide the marketplace is identifying uncertainties and their impact on your business. Today there’s no greater uncertainty than COVID.
When assessing the uncertainties and impacts of COVID in your financial reporting, your company should consider:
- Short, medium, and long-term financial effects related to COVID
- Your business resilience in the face of multiple COVID scenarios
- Details of how you’re monitoring and controlling the situation
As the pandemic continues, consolidation software will only help you quickly and accurately report its impact on your financials. The result? Easier, more efficient, and more confident compliance - even during dynamic times.
Staying Proactive, Efficient, and Adaptive
The COVID pandemic will continue to shift the business landscape for the foreseeable future. It will bring to light new challenges, risks, and opportunities.
To be successful, finance and accounting teams need to remain adaptive and proactive. Taking advantage of opportunities to streamline operations, manage risks, and comply with regulatory requirements.
Accelerating digital transformation is the obvious way to get there. And financial consolidation software is one investment that promises to deliver on all fronts.
With the three main steps described above, you already have the tools needed to set your business up for success in spite of COVID. Not just to survive, but to thrive.
About the Author
John Power is the CEO and co-founder of Fluence Technologies, responsible for strategic direction and operational execution across all areas of the company. Before Fluence, John was CEO for ten years at Longview Solutions, a global financial close and consolidation software provider focused on the enterprise market. His career spans three decades of leadership roles at organizations including Andersen Consulting (Accenture) and Southam Inc. John lives in Toronto with his wife and two children.