KazantsevAlexander – Fotolia
The coronavirus pandemic has disrupted our normal way of doing business. As a CFO or finance leader, you’re likely faced with a new challenge: closing your books for Q1 with a remote workforce.
Many of the steps in your existing process may require a physical presence at the business. Some of those can easily be transitioned to a remote model. A paper-based sign-off process, for example, can be moved online with very little effort. Other processes are more problematic, though. It’s hard to imagine doing a physical inventory without having someone at your warehouse to count your product.
Steps to take in the short term
Now is the time to determine which steps of the closing checklist are potentially problematic. Your finance team must factor in the supply chain disruptions your suppliers and customers are facing. Wherever there is a need for information from external sources, expect possible delays. If you normally receive paper-based invoices and statements from trading partners, proactively reach out to them and develop an information-sharing plan.
If you expect a delayed closing, communicate that early and set expectations with the rest of the executive team.
Closing the books as coronavirus sweeps the globe
Beyond these process issues, there are special considerations for closing this quarter. Economic disruption has led to material changes in supply chain and sales forecasts. Companies should take a hard look at receivables to determine whether their allowance for doubtful accounts needs to be adjusted. The appropriate leaders should be taking a fresh look at contracts. Pending mergers and acquisitions, for example, could be affected by a MAC (material adverse change) clause. Sales forecasts will likely change, and that will have a substantial impact on cash flow.
Digital finance transformation ahead
For the longer term, this is an opportunity to reassess the quarter-end process and look to processes and technology that will support your team going forward. The coronavirus crisis will end, but future crises are inevitable. CFOs should consider deploying technology that will mitigate the challenges of remote closing and reduce friction within their organizations.
Document management products, for example, make information available anytime, anywhere. Financial closing software streamlines and automates much of the process. Self-service reporting tools enable remote workers to get the information they need without reliance on the IT department.
Disruption creates challenges, but it also generates opportunities. As CFOs overhaul their closing processes, they can deploy technology tools that deliver benefits in any business environment.
Dig Deeper on ERP financials
Related Q&A from James Kofalt
With an extension to the SAP ERP Central Component end-of-support deadline, customers are wondering what it means for them. Here’s a look.
More and more businesses have turned to cloud technologies, even when it comes to their ERP systems. Here’s a look at the many benefits cloud ERP …