The challenges facing finance teams in 2021

23rd Jun 2021
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Can software really replace accountants?

Change within organisations and industries can happen quickly and unexpectedly. The pandemic has highlighted that we never know what is around the corner. There are all sorts of things we do today that we didn’t do just 12 months ago.

And even without sudden industry-wide shifts, technological advancements continue to occur at a consistent rate. This means that companies must always find new ways to adapt.

As with many back-office functions, finance teams are becoming more streamlined. A lot of laborious work can now be done at the click of a button. But despite this technological progress, finance teams still need people. Keeping your skills up-to-date is a good way to make sure you remain a vital part of the team.

Ensuring you are well versed on all the new technology and software that you use is also important.

Get the best tech

No one expects you to be a digital expert, but try to keep an eye on developments in the world of technology. Your IT team might be good at showing you how things work, but you need to talk to them about the functionality you require.

You don’t need to upgrade every single time a new programme or application hits the market. But do carry out regular reviews of your software. If your competitors have systems that allow them to get more in-depth value from their data, they’ll have an edge over you.

Data protection and security

Data protection should be a key consideration throughout all organisations, both because of regulatory requirements and as it’s a good general practice (especially as threats are rising).

But members of your finance team need to be aware that they have a particularly important role to play in this. They have access to a lot of personal data that would be of great interest to those in cybercrime.

Internally, there are employee payroll details, names and addresses, bank account numbers and various other sensitive details. There is also information about your organisation itself that would be dangerous in the wrong hands.

Externally, there is information about customers and suppliers, bank account details and credit card numbers, credit histories and addresses that you have been entrusted with.

Your financial compliance officer has some responsibility for this, but all members of the finance team must be vigilant.

Monitoring / managing risk is a key financial department challenge, and you should always be on the lookout for possible gaps in security.

With the huge increase in remote working over the past year or so, there are more opportunities for cybercrime. Staff often use less protection when they are working off site. Your colleagues in IT should be on top of this, but you should work closely with them.

All members of a finance team should be fully aware of your security policy, and what to do if they suspect something has been leaked or stolen.

There should also be levels of access so that sensitive information is only given to those who need it.

Regulations and compliance

This leads on to the need for full understanding of the regulations that you are required to follow.

Laws have been tightened over the years, and accounting practices have become tougher as regulators look to crack down on bad behaviour. It means you need to make sure you’re right up-to date with the rules on everything from the pension scheme to reporting regulations.

You should work closely with your compliance officer, to ensure that all those within the organisation that have responsibilities, understand them fully (and have the necessary support to carry out their duties properly).

Breaking the rules or failing to maintain good financial compliance can land your business in hot water, and in the long term it can erode your customers’ confidence.

The importance of planning

Although the pandemic came as a bolt from the blue, you should always be aware that shocks can happen, and should ensure your company is in the best shape to deal with such outcomes.

Also keep an eye on your partners, as their performance or business health can have an impact on your finances.

Cashflow is one of the biggest risks. Many organisations that were in otherwise good health have suffered simply because of a lack of cashflow. So, it’s important to plan for eventualities to see how robust your business would be if one of your customers failed to pay, or if a supplier failed to deliver.

Imagine a worst-case scenario and see if you would be able to get through it. If not, you should start to address the problem. If you simply wait for things to go wrong before trying to hatch a plan, it could be too late.

Understanding the wider business

The finance department has a vital role to play in steering and monitoring the business. It is important as part of this to understand the aims, frustrations and challenges of other departments, and build strong relationships with them.

You might be able to identify potential problems before they occur and provide insight and guidance. Each function within the organisation needs to share the same business-wide vision and be working towards common goals. It’s important to remember that communication with others is a crucial part of being a successful finance team.

 

If you want to ensure your finance team are able to overcome challenges posed by the modern business climate (with the help of the latest tech), take a closer look at our accounting software.