Prepping Risk, Finance, and Accounting for What's Next
With many of us solidly making the transition to remote work during the COVID-19 pandemic, financial reporting and internal controls teams will soon shift to thinking about how to prepare in case this disruption is prolonged, or (please no!) some future event causes a similar disruption.
Your team may have adapted remarkably well. Or perhaps they initially struggled, with lessons learned if we ever have to go through this again. Either way, at some point, a little introspection will go a long way to prepare for a potential new reality in the way we work.
First, assess what went wrong this time, and start from there.
Identify roadblocks during the last disruption
If you have a financial reporting or financial close process flowchart, use it to document what processes and systems broke first. Those are the areas to address immediately, before the next close and reporting cycle.
Some questions to consider:
- How long did it take to make sure internal and external collaborators could access company networks, applications, and systems?
- How much time did your team lose moving files from hard drives to shared drives or cloud platforms that teams could access from anywhere?
- Was it difficult to collaborate when not everyone worked in the same office?
- What about maintaining version control?
- Was it difficult keeping information secure? Does your team need to lock down access to sensitive documents while also giving specific people permission to review them?
Identify areas of risk
If it were me, I would look at my close and reporting checklists and timelines and take it a step further by identifying the areas of highest risk. Even if it didn't break this time, if it were to break the following time, what could that mean for your team?
Give some thought to:
- Data accessibility
- Maintaining internal controls
APIs and connectors are making it possible for reporting teams to pull and refresh data automatically into spreadsheets, reports, and presentations. That not only saves time when teams are already stressed but reduces the risk of error that comes from manually having to input data.
Some teams have found that when they increased the ability for people to collaborate, perhaps by using free online tools, it decreased the effectiveness of certain controls. In a pinch, screenshots can help you maintain a record of changes. Longer term, it's worth exploring whether to move financial reporting processes to a cloud platform that enables real-time collaboration and also provides an automatic audit trail of revisions, so there are fewer issues with version control.
Kick-starting finance transformation
Many finance and accounting teams have been working for years to transform their operations, most often by streamlining how they record transactions and consolidate. Meanwhile, those who have only just started financial transformation efforts have probably been violently shoved in that direction by the effects of the new coronavirus.
Either way, to be truly effective, financial transformation needs to include the assembly and reporting process, which is the most visible part of the accounting close, and internal controls will similarly need to transform along the way.
Given how accounting and finance teams will likely need to work together in a post-COVID-19 world, financial transformation efforts will become more important than ever. I hope we never see another event like the COVID-19 pandemic, but if we do, take this as an opportunity to embrace transformation, so your team is more prepared next time.
As always, reach out if you'd like to talk about finance transformation with the Workiva team. In the meantime, check out our content hub for more resources for the new normal.
About the Author
Steve is Senior Director of Product Marketing and Accounting Industry Principal at Workiva. Previously, Steve served as an accounting leader in multiple roles including Vice President and Controller for Backcountry.com, a private equity owned, online retailer of outdoor products, and as the Director of SEC Reporting for Overstock.com (NASDAQ: OSTK), a $2 billion revenue, online retailer of home goods and blockchain technology company. His experience includes multiple acquisitions, debt offerings, an IPO, and the world’s first digital debt and equity offering (by Overstock). Steve is also a former member of the US XBRL Data Quality Committee.