What must all Finance departments learn from Covid-19 disruption?
1st Jun 2020
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Although Finance Directors are still in the throes of navigating through the current Covid-19 disruption and its impact on their business cashflow, it’s also important to step back and take note of the lessons being learned. As well as the wide range of crisis management activity going on, during this period of significant change, there are opportunities and business benefits too. The most effective Finance Directors will be spending some of their time reviewing what is happening and forming strategies to embed change for the better where possible.
As the optimists are always happy to remind us: every cloud has a silver lining. Clearly in such turbulent times, it’s hard to find the positives (and that’s entirely understandable) but there are some key points to note which could change the direction and priorities of finance departments in the future when the current crisis has passed.
A concerted effort to reduce inefficiency in Finance
The uncomfortable truth learned by finance leaders across the UK and beyond is that process efficiency has not been the biggest strength of many teams. The level of inefficiency in finance operations obviously varies considerably – however the reality is that many have stayed far too reliant on paper-based processes for too long, even whilst the rest of the world (and even other departments within the business) have gone digital. This presents some difficult questions to answer… Without access to offices, what use are rows and rows of paper filing cabinets? How easy has it been to process cheque payments instead of using BACS? Paper-based purchase order books and expenses claims with an envelope of receipts attached are other examples of finance functions that could be so much easier.
Inefficient people-oriented processes are also rather more visible now as well. Individuals who become a ‘bottleneck’ for approvals are one example. Consider too the individual members of staff who prefer to stick religiously to one functional area without embracing training or learning new skills. It is hard for them to maintain a level of effectiveness, particularly in times of crisis when flexibility and multi-tasking can be such game-changers.
Updated Finance technology solutions should be considered
Now is also a good time for Finance professionals to properly consider their departmental needs from a technology perspective. It’s clear that the mass move to home working proved particularly difficult for lots of finance departments, largely because their hardware and software was not cloud based. And having used out-of-date systems for years (perhaps because changing or updating was always perceived to be too complex or costly) ultimately meant that adapting to remote working was even more difficult – and in some cases expensive. It may be time to actively assess how modern finance technology could enable the department to deliver so much more as it brings far greater efficiency as well as flexibility to adapt quickly when business needs change.
Now, more than ever before, the vision of what Finance could look like has become clear.
Food for thought for forward-looking Finance Directors
• Invest in technology to improve efficiency and future-proof the Finance department • Develop skills across teams (multi-functional and management) • Encourage an attitude of continuous improvement and actively embrace change