This article originally appeared in BOSS Magazine.
As COVID-19 executive orders limiting travel and group gatherings bring many employee expenses to a grinding halt, how can finance teams use this time to arrive on the other side of the pandemic better than before?
Outside, the pace of life has slowed. Our city streets, office buildings, and airports are eerily quiet due to mandates for social distancing. But for most companies, business hasn’t come to a stop. In fact, for many, work is more intense than ever. Leaders are under tremendous pressure to quickly evaluate and assess the impact of economic uncertainty to their revenue and operating expenses. They worry about their employees’ health, the slowdown in sales activity, lost revenue, and in worse cases, potential layoffs.
Finance teams are on the front lines of the business during times like these. Operationally, they are tasked with analyzing the data, reducing operational costs, and keeping jobs intact. Strategically, they work hand-in-hand with executives to identify what work is essential requiring ongoing investment, and what projects can be scaled back or postponed.
To add to the challenge, many finance teams are doing this work remotely. Only a few weeks ago, finance teams closed the books on March—without exaggeration, one of the most volatile months ever—from kitchen counters and home offices.
For those companies who have invested in cloud technology, critical finance work should carry on without too much disruption. But those who continue to rely on static spreadsheets, highly manual processes, and paperwork will struggle to collaborate, work efficiently, gather information, and audit results.
The dust from all this upheaval will settle, sooner or later, and while employees remain working from home, finance teams should consider investing in better operational tools. Cloud-based software built on real-time data automates manual work, provides better visibility into company spend, surfaces insights to inform better decisions, and ultimately, provides cost savings. Investing in better spend management tools is not only critical for containing costs in the near-term but can also help you exit from this economic uncertainty stronger than ever.
As your business works to do more with less and stay resilient in the face of the unknown, think about what activities you should pause, stop, start, or continue, to strengthen your business while avoiding disruption. Below are some ideas on where to focus, to cement your business in a strong position now and in the pandemic’s aftermath.
What tools are you using? What tools do you want to use? Have you delayed a transition to new software because it never seemed like the right time? A 2019 business spend report by Center, Under Pressure: Operational Challenges for Finance Teams, revealed that 87% of finance teams use some type of software to manage expenses. But the amount of time they spend on the process itself—from tracking down receipts, to closing the books, to producing reports—is so excessive that it impacts their ability to focus on important strategic work. Given the lull in expense activity right now, it’s a good time for businesses to evaluate alternative spend management solutions and transition to something better suited for their needs.
What are you measuring? How is this different or the same as before? Are your tools showing you the level of detail you need to ensure you’ll hit expense targets? Do you see data fast enough to make timely decisions for your business? You can’t afford surprises right now. Waiting for month-end reporting is unacceptable in this new normal. With employees spread out and working remotely, real-time visibility into all employee spend—as it happens—will be more critical than ever.
How are you making decisions? What data is informing your decisions? What data is missing or preventing you from making decisions? Are you able to analyze in real-time or are you basing decisions off historical data only? Staying informed with the most up-to-date information is critical to take action. Assess the information you have, make data-driven decisions, and act quickly.
How can you rein in spending? How much do you need to cut back and where should you make those cuts? Many companies implement across-the-board spending cuts, but those can cause unintentional harm by reducing spend on the very initiatives that matter for your company’s long-term survival. Instead, analyze your data to make strategic decisions. Look for signs of what our controller calls “spending inertia,” long-term contracts or recurring subscriptions that tend to get automatically renewed without much discussion about the value. Can those contracts be renegotiated? Can you consolidate or even cancel unnecessary subscriptions? The fintech industry is disrupting many traditional legacy systems with more efficient solutions that come at much lower price points.
COVID-19 has introduced ambiguity in all facets of our lives. On the business front, you can combat that ambiguity through information and action. If you don’t have strong tools to support financial operations, take this opportunity to get the systems that you need, ensuring that your business emerges from this downturn stronger than ever.