A crisis is not necessarily the time for caution. In fact, difficult conditions call for innovative approaches – and there is little doubt about the difficulties ahead. In September, inflation climbed to 10.1%, and the Bank of England announced that the nation was already in recession as it raised interest rates to the highest rate in 14 years.
These are particularly difficult times for finance teams, who must satisfy increased demand for fast, accurate reporting whilst struggling with constrained budgets and headcount.
As economic headwinds suppress growth, organisations may decide to pause, postpone, or even cancel modernisation programmes, preferring to lean on tried and tested processes instead. However, businesses pushing ahead with investment to achieve better workflow may be better equipped to weather the storm. When recovery does inevitably occur, they will be well-placed to accelerate growth and race ahead of competitors.
Accounting for change
When workloads become difficult to manage, the obvious solution used to be to increase headcount. In an era of recession and inflation, this becomes more of a challenge. Even before the recession hit, accounting teams faced staff shortages and high turnover because of increased demand. Now, even if it was simple to find the right people, spending is under such scrutiny that new hires are extremely hard to justify.
Overwork and under-resourcing are leading to a concerning increase in burnout among finance teams. A recent survey revealed that 99% of accountants were suffering from chronic workplace stress. This silent crisis is also leading to mistakes. 85% of respondents reported that they needed to reopen their books at least once in the past year to fix errors, and almost half (49%) reopened their books in three or more months. Clearly accounting teams are already feeling under pressure, and recession will add more weight to the very same people.
It might seem counterintuitive, but one response to these challenges is to enact digital transformation. Recessions create volatility. Modernisation can help organisations cope with this uncertainty and build for the future.
The road to modernisation
When planning modernisation projects, leaders should focus on automation and data. When accountancy teams deliver accurate, up-to-date figures to leaders, they can make better decisions. Finance teams also need access to their own sources of data which can provide the right insights at the right time.
One significant challenge finance teams endure are delays are around the month end close. Congestion is often created by a lack of collaboration and visibility across departments. All departments sharing data with the accounting team regularly should know exactly how to do this, and simple, user-friendly software, can ensure there is no friction in the process. The golden rule is data should be deep enough to provide meaningful insights yet presented in a comprehensive format. Businesses should invest in processes which make reliable data easier to access and processes seamless, whilst also removing any broken legacy processes.
Finance teams are increasingly turning to automation and when headcount is limited this is a logical and effective investment. By automating mundane accounting tasks, CFOs can free up finance teams to focus on strategic work, which will help the wider organisation succeed in a volatile environment.
Automation is not about replacing staff but augmenting and improving their work. Adopting the right tech can simplify organisation and coordinate the close while streamlining reconciliations and allowing housekeeping tasks to be finished sooner. As well as driving efficiency, automation will also improve staff wellbeing, satisfaction and help to reduce churn.
Beyond complexity
We’ve discussed the need to move beyond legacy processes. There is also one old-fashioned attitude which must be jettisoned to progress. Modernisation was once associated with complexity. This is not the case today. Initiating automation and overhauling data processes no longer must be a difficult, cumbersome processes.
Financial software can be easily and quickly implemented with the right level of complexity for an organisation’s needs. The majority of accountancy firms do not have access to in-house programmers – it’s costly and labor intensive. However, they can opt for a no-code or low-code solution instead that doesn’t require a large IT team to implement. What is crucial is choosing the right software to meet needs – sometimes it’s a simple piece of tech that can have the greatest impact.
As the downward pressure on the economy continues, leaders may want to think carefully about their choices. When a recession hits, the growth mindset must not be abandoned.
Whilst the instinct may be to batten down the hatches, those who have the confidence to make changes by improving financial workflow will find they are better placed to make swift and effective decisions and ride it out. Now is not the time for business as usual.
Adam Zoucha, MD EMEA of FloQast.
