Why now is the best time to improve your finance processes

COVID has highlighted areas of weakness

There can’t be many businesses that had a perfect fall-back plan for this kind of situation and so it’s good to know that you are not alone.

What are a little rarer, however, are businesses that are using the lockdown as a catalyst to introduce change.

In our last post, we advocated analysing the effects of lockdown and how it changed our way of working.

Many businesses will have had limited working from home to cope with things like ‘snow days’ but when the whole workforce is not in the office then cracks can show.

These weaknesses will in many cases be only too obvious to the company and its customers which almost makes the case for change on its own.

It is important that finance use these issues, not as an attack on their professionalism but more as a way of pointing to changes they want to make that will mitigate problems in the future.

COVID has concentrated minds

Often, finance managers and FDs find themselves trying to put in place disaster recovery plans which include elements of remote working or working from home.

However, they can be stymied by senior managers and directors not really seeing either the need or the urgency.

It has to be said that the need has been amply demonstrated with the problems we have had but at the same time it is important to also stress that the situation isn’t necessarily over.

Experts also say that with the global movement of people it is easier than ever for viruses to transmit and cause another pandemic.

COVID is a useful example to give to directors who are normally change-resistant as it will concentrate their minds on the importance and the urgency of new systems and processes.

Not everyone did badly

Most companies, if they are being honest, probably just about managed to muddle through. Some had a really hard time, but others managed the situation really well.

Invariably the successful exhibited two key attributes; they were flexible and they were prepared.

Whilst it is easy to look at the negatives when making the case for change, it can actually be more productive to highlight positive news stories.

Companies that did really well already had key systems such as finance, expenses, payroll etc in the cloud. They had distributed connectivity and methods for the company to keep in touch.

Many will already have practised days where everyone works from home, a little like a fire drill.

Benchmarking against these as examples of best practice can help provide a template for changing finance systems to a more robust state.

Rapid forecasting is the key

What has been interesting is that some companies have been able to produce reforecasts very quickly indeed.

Imagine how much better the decision-making process is where directors have almost instant access to a rapidly updated forecast.

Knowing exactly how current circumstances are affecting KPIs within days if not hours is an incredibly powerful weapon in the finance armoury.

Now is absolutely the time to look at reporting systems and identify areas that can be speeded up and, at a fundamental level, whether the KPI’s and reporting measures are fit for purpose in a post-COVID world.

How will you make the case for change?

Finance is at its best when it is leading the case for change.

Now that people are much more aware of the need for flexibility around working arrangements it is clear that there is an information vacuum in many companies that Finance can seek to fill.

Yes, it takes some effort and most likely some investment, but having robust systems that can cope with dramatic shifts in our environment can only be a good thing for modern businesses.