For the past ten years, the role and work performed by the Office of Finance in the organization has changed significantly. Once underappreciated and considered a back-office department, the finance function has been elevated now to a strategic partner that helps guide business decisions based on insights gathered from relevant and timely financial information.
This evolution of status and appreciation was accelerated by COVID-19. As the world went virtual and the economic implications of a global lockdown became apparent, the Office of Finance was relied upon to provide business-critical insights to C-level executives to help keep organizations afloat.
However, a recent survey performed by BDO USA found that boards of directors are now facing new problems in financial reporting, accounting processes and governance during the COVID-19 pandemic. A recent article by Accounting Today discusses the results of this survey and identifies some of the biggest challenges company boards are making a priority to fix.
Financial Reporting and Disclosures
COVID-19 brought a new level of uncertainty to the global economy. As organizations began handling the problems that it brought to the Office of Finance, investors quickly became concerned with the standing of those companies. Because of this, there’s been a heavy focus on informing investors and stakeholders of the financial standing of their company. In fact, according to BDO USA, “73% of the surveyed public company board members said they have increased their disclosures around new or emerging risks to their business. Meanwhile 42% have increased their disclosures around liquidity and 28% indicated they have considered disclosing asset impairments. In addition, 26% have added new disclosures for use of government assistance.”
While it is of the upmost importance, retaining shareholder confidence after such an unprecedented event is going to be a significant challenge for the first half of 2021, and likely the second half as well. Additionally, this task will primarily fall on accountants. As the entirety of an organization’s financial information flows through the Office of Finance, the key information that will put shareholders at ease currently resides in their work. However, compiling the information to do so requires the right processes and tools.
In the midst of the pandemic, the survey found that from a governance perspective, the biggest priority for nearly everyone was the safety of the stakeholders in organizations— this includes employees, customers and vendors. 71% of surveyed directors said that this is their key priority and 87% of the polled board members stated their organizations have implemented or expanded safety procedures in the work environment.
Moving forward, in the future, boards members need to figure out how to best keep people safe and what role they can ultimately play in that goal. However, no matter what changes are made, employees need to be empowered to perform their work wherever it is conducted.
Employees and a Remote Workforce
Due to the impact of COVID-19, many companies were forced to cut back on employees. 38% of the surveyed directors indicated that their organizations had to lay off or furlough their workers.
This development has forced boards to ask themselves very difficult questions, concerning topics such as:
- The right level of staffing for their respective organizations?
- If remote work is a viable option for their company long-term?
- How to rebuild and grow in the future?
While the answers to these questions are going to be industry-dependent, each organization has to empower their existing workforce in the Office of Finance to perform the necessary work to complete the Record to Report (R2R) process.
Automating the Office of Finance
While some finance functions would like to go back to an environment that resembles the workplace pre-COVID, the reality is that work environments and how accountants perform their work has transformed. In order to both perform their historical work as well as the new tasks that their board of directors now require, accountants must improve both the efficiency and effectiveness of their R2R process— even while working in a remote environment.
Trintech’s cloud-based solutions not only allow accountants to work together in a standardized, organized procedure, but grants CFOs and Controllers a set of controls and visibility into the close process through the convenience of simple dashboards. The dashboards can be accessed by a computer and a mobile device, so whether working in an office or working remotely, the Office of Finance can distribute tasks evenly and efficiently to keep the close on track.
To read the Accounting Today article in full, please click here.
Learn more about how financial close management software can grant better visibility and control. Speak with our Record to Report experts today.
Written by: Caleb Walter