Can software really replace accountants?
Change within organisations and industries can happen quickly and unexpectedly. The pandemic has highlighted that we never know what is around the corner – there are all sorts of things we do today that we didn’t do just 12 months ago.
And even without such big jolts to the system, technological advances happen all the time, and you’ll have seen many changes over the years to how finance teams operate.
As with many back-office functions, finance teams are becoming more streamlined, and a lot of what used to be laborious work can now be done by pressing a button. But despite this technological progress, finance teams still need people, and keeping your skills up-to-date is a good way to make sure you remain a vital part of the team.
Ensuring you are well versed on all the new technology and software that you use is also important.
Get the best tech
No one expects you to be a digital expert, but try to keep an eye on developments in the world of technology. Your IT team might be good at showing you how things work, but you need to talk to them about the functionality needed.
You don’t need to upgrade every single time a new program or application hits the market, but do carry out regular reviews of your software. If your competitors have systems that allow them to get information faster or more in-depth simply because they’ve got new technology while you are wedded to a legacy system, they’ll have an advantage over you.
Data protection and security
Data protection should be a key consideration throughout all organisations – both because of regulatory requirements and because it’s good practice, especially as threats are rising.
But members of your finance team need to be aware that they have a particularly important role to play in this. They have access to a lot of personal data that would be of great interest to criminals.
This info is both internal and external. Internally, there are employee payroll details, names and addresses, bank account numbers and various other sensitive details. There is also information about the organisation itself that would be dangerous in the wrong hands.
Externally, there is information about customers and suppliers – bank account details and credit card numbers, credit histories and addresses that you have been entrusted with.
Your Financial Compliance Officer has some responsibility for all this, but all members of the finance team must be aware of their obligations, too.
Monitoring and managing risk is a key financial department challenge, and you should always be on the lookout for possible gaps in security.
With the huge increase in remote working thanks to Covid-19, there are more opportunities for cybercrime. Staff often use less protection when they are working off site, and criminals know this. Your colleagues in IT should be on top of this, but you should work closely with them.
All members of a finance team should be fully aware of your security policy, and what to do if they suspect something has been leaked or stolen.
There should also be a process in place that gives access to sensitive information only to those who need it.
Regulations and compliance
This leads on to the need for full understanding of all the regulations that you are required to follow.
Laws have been tightened over the years and accounting practices have got tougher as regulators look to crack down on bad behaviour. It means you need to make sure you’re right up-to date with the rules on everything from the pension scheme to reporting regulations.
You should work closely with your Compliance Officer to ensure that all those within the organisation who have roles to play in compliance understand them and have the necessary support to carry out their duties properly.
Breaking the rules or failing to maintain good financial compliance can land your business in hot water, and in the long term it can erode your customers’ confidence.
The importance of planning
Although the pandemic came as a bolt from the blue, you should always be aware that shocks can happen. Indeed, following 9/11 and the 2008 financial crash, Covid-19 is the third major event to shake the world since the turn of the century.
But you should be open to the possibility of smaller external shocks that can damage your business. Keep an eye on your customers and suppliers, because if they start having problems it can hurt you, too, and that can lead to a huge financial management challenge.
Cashflow is one of the biggest risks. Many organisations that were in otherwise good health have suffered simply because of a lack of cashflow. So, it’s important to plan for eventualities to see how robust your business would be if one of your customers failed to pay or a supplier failed to deliver.
Imagine a worst-case scenario and see if you would be able to get through it. If not, you should start to address the problem. If you simply wait for things to go wrong before trying to hatch a plan, it could be too late.
Understanding the wider business
The finance department has a vital role to play in steering and monitoring the business. It is important as part of this to understand the aims, frustrations and challenges of other departments and build strong relationships. You might be able to identify potential problems before they occur and provide insight and guidance. Each function within the organisation needs to share the same business-wide vision and be working towards common goals, so inter-department communication is key.
So while there might be a stereotype that if you work in finance you must be someone who prefers a spreadsheet to meeting someone new, having good people skills and the ability to work together across departments is an important part of the job.
Like what you’ve seen? You can find more blogs, insight and guidance on some of the important issues currently facing finance teams here.