The system shock that 2020 has turned out to be as a result of COVID-19 has thrown everything into the air. Every plan, forecast – out of the window. Even the way we work. The White-collar workforce you were a part of and worked side-by-side with daily transformed overnight into the t-shirt and sweatpants workforce. This was probably not on the list of things you considered when weighing transformation targets for 2020. March was that moment of shock. The end of the month and the end of Q1 became a crash course in closing remotely. Without preparation, without a trial run in a test environment, unprepared, straight into production with a do what it takes mentality.
The new normal of closing remotely
April has come and gone as well, and as many struggle to plough through a normal monthly close with difficulty, perhaps it is time to consider just how the challenges posed by the new normal could be addressed. The new normal of closing remotely is forcing a re-think of workflows to account for performing everything possible remotely, even if your processes were perfect before this crisis they were not designed from a perspective of remote work being a must. Digital transformation is no longer a nice to have but a must. Risk too has changed. While there is light at the end of the tunnel, and economies are opening up there exists an ever-present risk of a resurgence, and that risk needs to be managed. What do you do if half of your Record-to-Report team is on sick leave at the same because COVID came back in October? What can you do now to mitigate that risk, while also navigating a path forward that is designed with the presumption of all work being performed remotely? Remote Close being the default?
No matter how good your processes were earlier, adapting and following them remotely means some of your current practices are ad-hoc, semi-organized with a dependency on specific key people and now there is an urgent need to review the process, identify areas of improvement, establish a new standard and document everything about the new workflow. You will recognize this need if in the last two months Close felt more like a project than a smoothly flowing process. Even if you coped fairly well, you will probably feel working with shared folders, shared Excel files and collaborating across the team with employees using Skype, Teams, Slack, even WhatsApp but mainly by email – was less than ideal
Trying to tool up, throwing technology at the problem to help you cope and contain the problem of remote close will help but the prerequisite is for the new processes to be clear and structured enough so that they can be modelled in closing task manager software. This means that your documentation must be up to scratch, listing all of your closing activities, describing them, their order of completion, who the work is assigned to, who can serve as a backup, when the work must be performed, as well as documenting the relevant work instructions, and templates to be used to complete the work. Think of this with the old adage of “if it’s not documented it doesn’t exist” in mind. It is of particular importance in order to mitigate the risk of being forced to re-assign remote work to not one or two, but multiple other employees, loan staff or temps on short notice.
Manage your close (and upcoming audit) remotely with confidence
As you come up for air and look ahead beyond the moment of crisis and prepare for remote close being the standard month in, month out for an extended period of time – you will notice that the implications are even more extensive. Audit is also remote. How much documentation, audit trails, supporting evidence and detail can you provide digitally? If your first thought is to call DHL or another parcel delivery company to transport your binders and paper trail then it really is time to apply closing task manager software. Typical features which enable a remote audit include the ability to export all relevant data to an eBinder, delivering it in an encrypted zip file to an external auditor with every activity, audit trail and supporting evidence hyperlinked and attached. Often you can also provide read-only access that allows the auditor into the system enabling remote collaboration for a faster and smoother audit bringing savings there.
An offline or a manual closing task manager can be a quick fix to implement and enable remote work but in order to not just cope but rather thrive in the new normal there is more than ever a need to look at integrated closing automation. One common challenge organizations have today, with spreadsheets – is that the required work was actually completed, somebody just didn’t bother to fill out the checklist marking the work as completed. Now, when everybody was in the same room – daily chatter ensured that the process kept flowing. A closing task manager that is a browser or cloud-based version of that closing checklist is, yes, more user friendly than a shared spreadsheet, so it does make it more likely to be filled out – but we really should aim higher.
In order to not only digitalize but improve and automate processes as well, it becomes imperative to start looking at Close as a whole. How many closing tasks result in complex manual journals? How often are you working with excel files that contain a lot of numbers but maybe lack background information on how those numbers were reached? If it was an ERP report, when was that report run and could the original report be attached to the closing task? Maybe we could define running that report into a single job, assigning that job as a task to all of the group companies to perform on a preset schedule taking the local time and holidays into account?
Our vision at Aico – is that when it comes to Financial Closing Automation, the user shouldn’t be asked to perform the required activity in one system, and mark the work as being completed in another. Rather, the checklist and the toolset required to complete the work, along with the dashboards for personal, team and management views and KPI’s or milestones that we are tracking must all be in the same system. The efficiency gains and time savings are exponential especially when you have a single system that can integrate into multiple different versions, types and instances of ERP systems (such as SAP, Oracle and Microsoft D365 Finance & Operations) at the same time.
Ps: However you go through this process or the current challenges – please don’t overlook the 8th and last disciple of problem-solving. Congratulating your team for pulling together in these extraordinary times and helping you to Close remotely. Hopefully faster, and with improved accuracy and increased efficiency.