By Neil Kinson, Chief of Staff, Redwood Software explains how COVID-19 has forced finance transformation back to the top of the CFO agenda.
The COVID-19 pandemic has generated severe disruption—and finance is no exception. Chief Finance Officers (CFOs) have suddenly found their companies in firefighting mode and are at the heart of implementing change, quickly orchestrating their contingency business plans and listening to the needs of their organisations.
If this wasn’t challenging enough, CFOs are having to manage the usual backend financial processes without physically having their colleagues alongside them – as well as the physical volumes of paper files they would usually keep in an office.
Finance teams are now suddenly faced with the addition of new tasks to support other departments and help secure their businesses on top of already significant workloads. These teams, for example, may be faced with a surge in volume on the supply and demand side of the business, caused by refunds for cancellations of goods and services. CFOs may also be under pressure to furlough staff and manage the size of their finance teams. Furthermore, a recent study by Deloitte found almost two-thirds (62%) of CFOs do not expect demand for their own products and solutions to recover to pre-pandemic levels until after Q2 2021.
The new normal also includes revised cashflow forecasts, financial planning, reforecasting and applications for Government-backed loan and job retention schemes that just a few months ago did not even exist. At this challenging time, businesses are turning to finance for answers to questions that will help them shed light on a host of unknowns.
The pressure on CFOs is therefore clear to see.
Resilience, however, is starting to become a buzzword for 2020 and if CFOs and their finance teams can adjust their working practices appropriately, matching the businesses challenges their organisations face, many may come out of the COVID-19 pandemic stronger than when they first entered it.
Adapting to new processes and ways of working is critical to CFOs weathering this storm, in particular the ability for them to manage teams and interactions between team members to ensure that things do not fall between the cracks. The last thing a CFO needs 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 is happening.
At the same time, 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 financial processes, including audit trails, has never been more important.
For CFOs there is 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 which, up until now, many organisations have been putting off or stalling.
Finance transformation is helping organisations mitigate some of these unforeseen challenges. The automation of finance processes removes dependency on people to perform the high-volume, repetitive activities that form the mainstay of many finance team roles. Systems can 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.
The year of 2020 has undoubtedly thrown up more challenges for CFOs than ever seen before. However, adversity is the mother of invention and by automating their financial processes CFOs have the opportunity to emerge from this pandemic more resilient than ever.
