Top 3 Finance Challenges in the Reopening Coronavirus Economy
Since the start of 2020, COVID-19 has devastated individuals and drastically altered the global economic landscape. Accounting and finance departments face unique challenges as a direct result of COVID-19 that require specific solutions.
Leapfin has sought feedback from over 300 accounting and finance professionals to synthesize a composite view of COVID-19’s impact on their departments. Below, we’ve highlighted three key challenges accounting and finance departments will face as the pandemic fades and the economy reopens.
Most likely, your business has been negatively impacted by the coronavirus. Resources have been redirected away from expansive projects and executive focus has shifted towards cost-cutting.
The burden of identifying the “best” places to cut cost is, of course, born by the accounting and finance departments. Drastic shifts in financial reporting accompany that burden. Executive leadership now requires more frequent, detailed, and actionable reports of a different type. You’re performing entirely different scenario analyses than you were months ago. Your KPIs are also different, scrapping well-oiled workflows and demanding more flexibility from your data sources.
It’s possible that you’ve instituted a hiring freeze or even laid off existing employees. If layoffs have occurred within your department, your workloads have increased as a direct result. You might also find that some collective knowledge has disappeared. Even if the layoffs occurred outside of accounting and finance, there will be indirect effects. For example, if there were engineering layoffs, you now have even less access to the data you need than before.
These organizational shifts are likely to stick around. They might have exposed deficiencies in your financial systems and workflows. For example, imagine you were previously performing certain reconciliations as batch processes. Recently, leadership has demanded better visibility into those figures, but your systems might not even allow you to perform the same reconciliations on a transactional level. Addressing those deficiencies can seem costly, but without a solution it’s difficult or impossible to have an accurate view of the business.
Reopening Transaction Volume
On a more hopeful note, reopening may suddenly reverse many of the economic declines we’ve seen since January. That’s great for businesses, but rapid changes will challenge accounting and finance departments once again.
Imagine the scenario where your sales volume reaches pre-coronavirus highs. Are you prepared to handle that surge in transaction volume? If your revenue reporting was manual before, do you have enough employee bandwidth to close in time? Do your previous reporting methodologies align with new executive standards?
Anticipate the sales surge.
Audits & Close
The new prevalence of remote work is perhaps the most obvious impact of the pandemic. Its impacts on accounting and finance departments are both short and long-term.
In the short-term, coronavirus-imposed remote work has limited collaboration and decreased morale. During audits and month-end, collaboration is essential. However, remote work has made it more difficult to coordinate across functions and departments, especially when financial data is gated in multiple systems. Working alone, processes that were just tedious before are now incredibly frustrating, contributing to decreases in morale.
Still, remote work has its benefits, so it’s important to accommodate where possible. Clearly, teams need the proper systems and tools to enable effective remote collaboration, especially for audits and month-end.
These changes provide accounting and finance departments an excellent opportunity to restructure their financial systems and workflows. Preparing in advance is key. Appropriate adaptations will focus on efficiency, future-proofing, and collaboration.
If you’re currently working to address these challenges, our team is available to share our expertise and best practices we’ve gathered from conversations with hundreds of organizations. Additionally, our platform consolidates all financial data to automate the close process. Our customers have reduced their close time by >90%. Their financial reports are updated in real-time, enabling leadership to make data-driven decisions every day instead of only at month-end.