Fifty percent of UK finance leaders think it will take at least one year to recover from the effects of Covid-19 according to a new survey, with some suggesting it could take up to four. There may, however, be some longer-term benefits, writes François Lacas, deputy COO at Yooz
As cashflow was one of the primary areas to be impacted by the pandemic, many businesses (44%) found themselves struggling to process payments during the height of lockdown measures.
This was especially true for smaller businesses which, without the cash reserves of larger organisations, barely survived without the help of the furlough scheme and government support.
But delve a little deeper, and the inability to properly process payments goes beyond the pandemic: inefficient payment systems, less mature digital transformation programmes, and even difficulties in workers accessing key finance systems remotely.
All these challenges have pushed businesses back by at least a year, potentially more. So if there is one area to prioritise to help speed up the Covid recovery rate, it is in finance and accounting.
The priorities of finance leaders have naturally changed since lockdown measures were introduced. While finance leaders previously focused on operational productivity, inter-departmental communication and better control over financial processes, today’s priorities look very different.
The top priority now is being able to adapt to digital transformation, according to a 2021 survey of UK finance leaders. Because, although business growth has stalled, the pandemic rapidly increased the rate of digital adoption, arguably progressing more during this time than in the previous five years.
Accounts payable automation, electronic invoicing and payment digitisation are being implemented across the board. Integrations into ERP and accounting systems are also becoming less painful and time-consuming, and the benefits of having instant access to invoice approval and payment information in highly flexible and remote teams goes without saying.
The location of staff mixed between the office, home or a remote location is also proving an issue for security. Overall, 42% of companies said they experienced an increase in fraudulent activity around the time of the first lockdown measures announced in March 2020 when employees were forced to work from their homes.
This is the reason why the strengthening of cybersecurity practices has become the second most sought-after hurdle to overcome for finance leaders. But keeping sensitive financial material safe with a remote team is no easy feat, especially as colleagues are away from the business network and introduce their personal devices into the mix.
There are three changes in particular that accounting departments have embraced in a post-Covid world:
- Remote and hybrid working
Whereas many finance and accounting teams were previously chained to their office desks, employees are now embracing the change in working environment. Whether from the office, home or another location, teams can work anywhere they want as long – as the job gets done.
But it was not always like this. Lockdown measures and forced work from home revealed significant inefficiencies in the way accounting departments operated – from communication between different teams to managing finances remotely.
The silver lining is that remote or hybrid working environments look set to become a permanent fixture. Businesses have been busy focusing on how their operations and working environments can change to bring added benefits to the accounting team.
- Cloud technology
In a post-Covid world, cloud technology is an absolute must. As an increasing number of employees choose where they want to work from every day, businesses have to be able to support them with software that is able to meet this flexibility.
Being able to view, manage and approve invoices while on the move is not just providing new efficiencies, it has almost become expected as part of an accounts payable professional’s new-look role.
Cloud technology is also important for security reasons, as staff are far more likely now to access insecure public networks at cafes or use personal devices to access sensitive information.
The use of automation has long been debated in finance, and it will continue to do so in the future. But what cannot be denied are the operational advantages of businesses utilising the technology.
Businesses using automation in financial functions such as accounts payable can realise reduction in the cost it takes to process an invoice by around 70%, as well as an 80% reduction in invoice processing time compared to manual work. What is more, the technology is liberating finance and accounting teams. Not only are accounts payable staff enjoying the removal of energy-draining tasks such as manual data entry into Excel spreadsheets, but they have been replaced with more strategy-focused ones that directly relate to business goals and outcomes.
No need to fear change
The impact of Covid has been tough on finance and accounting teams over this past period, but it has also seen significant changes that will improve departments and business long into the future.
The biggest thing to remember is that change does not just happen overnight. Improvements in the way we work, how we work and the technology that we use will take time. But there is no doubt that they will happen, and can actually come around much quicker than we think.
The shift to digital payments, electronic invoicing, cloud technology, and automation will see businesses reduce costs and time taken to do manual-based tasks, while the job satisfaction of employees will rise as they are freed from the shackles of these menial jobs.
Businesses are constantly focusing on ways to improve financial processes now, paving the way for a much brighter future than before.