Historically, the roles of finance and IT have been at a sort of odds with one another. IT is responsible for bringing innovation and change to an organization. This innovation sometimes means experimenting with costly new technologies that don’t always achieve the results that were expected. Conversely, finance teams are responsible for keeping the business running, and that sometimes means shutting down projects in the name of cutting costs.
Today, cooperation between these two core business groups is more important than ever. Due to the COVID-19 outbreak, the office of finance is not only responsible for their typical duties but must now overcome new obstacles that would not have been considered this time last year.
Below you will find three challenges that are currently being faced by the office of finance, and how a stronger relationship between IT and Finance will help solve these issues.
Managing a Virtual Close
The biggest change to occur because of COVID-19 for the office of finance is the need for a virtual close process. Many organizations have discovered that the tools previously in place do not translate into an efficient, or productive, means of performing the financial close when applied to a remote workforce.
Typically, when accountants have an issue or a question, they could simply walk to a coworker’s desk and discuss it. While time-consuming, this was a manageable solution a few months ago. To resolve this now, accountants’ calendars are filled with multiple, daily 30-minute status update calls and meetings. This causes a decrease in the amount of time accountants have to complete their work, and increases the likelihood that misstatement causing errors will rise, and the validity of any produced financial documentation will be at risk.
In order to improve the efficiency and transparency for the remote office of finance, IT and finance need to align on what tools to use. Any tools that do not promote communication, automation and increased productivity throughout the close process should be removed. Plans should be put in place to implement the tools that are needed for moving the organization forward into a modern and efficient close process powered by technology.
Rise in Cyber Security Threats
By far the most considerable cybersecurity risk and main cause of data breaches is employee negligence. Unfortunately, during times of constant change and uncertainty employees often scramble in order to complete their work and cybersecurity best practices become an afterthought. This leads to an increase in cyber-criminal activity. Now, more than ever, employees need to be reminded of why this is so important, as cybercrime has increased fourfold during the COVID-19 pandemic.
To overcome this challenge, the office of finance and IT need to meet and align on two separate factors. The first is the need to ensure that the controls and tools in place still function and can work as intended in a remote office setting. The second factor is reiterating and enabling the training of employees on cybersecurity best practices. Regularly reminding and teaching employees cybersecurity best practices can help avoid the costly losses that come with data breaches.
New Demands for Insight
As organizations have adjusted to the economic impacts of COVID-19, the office of finance has increasingly been leaned upon for guidance. In order to provide this, the office of finance needs reliable access to real-time data that can provide business-critical insights.
In the past, the office of finance conducted the close process through spreadsheets and other forms of manual processing. By their nature, these approaches offer nothing in terms of visibility to the entire organization. In order to meet these new demands, IT and Finance need to work together in order to implement a technological solution that removes inefficiency, by automating and streamlining the overall Record to Report process and empowers accountants with the ability to quickly drill down into the important details of the organizations financials.
Automation Is Essential for Success
Business alignment is never more important than in times of significant change and uncertainty. In order for the office of finance to navigate these unprecedented times, the same level of change that has taken place in where they work needs to take place in how they work. By leveraging automation, not only can your workforce perform their duties more efficiently by removing time-consuming manual processes, but your organization gains secure access to real-time data into financials that can help provide insight into how to navigate the current economic environment.
To learn more about the changes that come with a virtual close, watch our webinar: COVID-19 and a Virtual Close – How This Will Impact Your Audit and Cybersecurity.
Written by: Caleb Walter