COVID-19 revealed major weaknesses within many organizations’ Offices of Finance. As work-from-home policies became mandatory, companies began to scramble to complete the close process effectively with a dispersed workforce. Many of the controls that were put in place to ensure accurate and timely reporting were created under the idea that the Record to Report process would be completed in-house, behind a certain level of security and oversight. Without working in this specific environment, the validity and efficiency of the Office of Finance were called into question.
As time has gone on, organizations have learned to cope with their new reality to the best of their ability. However, while COVID-19 is a unique situation, this will not be the only obstacle that the Office of Finance will face in our lifetimes. Changes in the global economy, shifting dynamics between countries such as Brexit, and changes to governmental regulation can all have a similarly severe impact on the organization.
In order to set your organization up for success in the future and meet both the expected or unexpected challenges it may face, change must take place in regards to how the Record to Report process is handled. Within this blog, you’ll find the most significant challenges that the Office of Finance is facing today and will likely face in the future, and how financial automation can establish resiliency within your organization.
Additional Workload and The Demand for Insight
COVID-19 has set the new standard for the role that accounting plays in the overall organization. At the beginning of the pandemic, the Office of Finance was heavily relied upon to be a guiding force for the organization. While many have found ways to cope with the new demands, the transition to a source of critical business insight has been difficult.
However, this is still a new ask for many offices of finance, and the expectation will only continue to rise as the insights deliver increased levels of benefits for the overall organization. Simply put, combing through financial information won’t be efficient enough to keep up in the future. In order to meet this new demand properly, a new approach to replace the manual processing of financial information must take place.
Using Trintech’s powerful suite of solutions for automation, escheatment and data delivery gives us more control and insight into our business. – G6 Hospitality
Cost-Cutting and Doing more with less
In the wake of COVID-19, many organizations began cutting costs in order to shore up their organization fiscally. Even without the pandemic, the Office of Finance is often the first place to see cuts. Despite these cuts, many offices of finance made no adjustments to how they approach their financial close.
Instead, organizations introduced an increased level of risk by adopting a “do more with less mindset”. Beyond the increased risk, this approach requires longer hours and later nights to produce financial statements that have less reliability than past statements.
Even the best organizations will admit to a few hiccups within their current processes. Expecting those hiccups to improve with less resources is unrealistic. Necessary cost-cutting within the Office of Finance will not likely end any time soon, but “doing more with less” is not a sustainable approach. In order to maintain the reliability and accuracy of reported financial documentation, organizations need a solution that increases the effectiveness of the Office of Finance without compromising integrity.
Because of Cadency, we have not had to bring in extra resources to cater to the 40% increase in reconciliation. – Secure Trust Bank
Turnover and a Lack of workforce
Thankfully, COVID-19 did not negatively affect organizations’ ability to staff their offices of finance. While organizations that currently have a hiring freeze would be an exception, as global unemployment levels rise, now is a great time to hire people at a time where they might have had trouble finding quality staff before. However, this does not mean that companies will not have to deal with this issue soon. By 2021, the average “Baby Boomer” will turn 65 years old and if they have not already, will retire in the near future. As time goes on, the percentage of accountants that fall under the “Gen X” and “Millennial” category will continue to grow. This means that more organization’s need to accommodate the generations that make up most of the workforce.
While millennials have often led older generations in their adoption and use of technology, there has been significant growth in tech adoption amongst Gen Xers since 2012. Similar to millennials, factors such as organization’s adoption of technology, that enable higher-value tasks to be performed, will heavily factor into a person’s decision when choosing to accept or decline an organizations offer of employment. In order to be an attractive option for future workforces, organizations need to move past technology developed in the ‘80s and towards a more automated solution.
70% of high-volume transactions are matched automatically, freeing up time for the research and resolution of exceptions. – Western and Southern
The Need for Smart Investments
Outside factors that impact an organization’s workload are inevitable. Additionally, we will not likely see another event that changes the global economy quite like COVID-19 has soon. However, the Office of Ffinance still has its own set of challenges coming. In order to establish resiliency in your organization, smart investments in technology must be made. While some organizations may choose to cut costs to weather the storm, investing now will lead to a greater ROI and long-term savings that have a bigger impact. Furthermore, doing so will allow your team to adapt to outside factors that impact your workload, workforce and resource availability.
Cadency has been an incredible investment for our organization, as it was a key step in our world-class finance initiative to regain control of our balance sheet, build capacity to absorb growth and simplify the month-end process. – Secure Trust Bank
To learn more about how you can build a resilient organization with the ability to meet growing demands, download our eBook: 4 Ways RI RPA Can Take Your Office of Finance to World-Class