It’s not likely that the global COVID-19 crisis will pass quickly.
David Perlmutter is a managing director at Deloitte & Touche LLP and has spent his career helping companies build resilient and efficient finance functions. Molly Boyle, one of BlackLine’s finance transformation experts, connected with David to discuss the impact of a remote, distributed workforce and the importance of resiliency in these unprecedented times.
Molly: As you’ve spoken with your clients and colleagues during the past few weeks, what’s the general sentiment from accounting and finance professionals right now? How are people feeling going into this virtual quarter-end and reporting process?
David: In many cases, the existing plans were sufficient, but there were clear opportunities for improvement. Closing with a distributed workforce while also dealing with health concerns and family responsibilities is difficult to plan for.
This is really pulling on many available resources and causing Finance and Accounting leaders to ask, what should I do today? How do we get through this? What do we need to do tomorrow?
Also, this may be the new norm. It’s not necessarily a one-time event, and the repercussions of COVID-19 are likely going to have a lasting impact on how work gets done and how people interact.
Many facets of Finance, whether it’s operational or managerial, are being challenged. This was an event that likely could not be anticipated.
Molly: Before the crisis, many companies were planning or working on finance transformation initiatives. How will the current crisis impact those projects?
David: Coming out of this, people are likely going to have a much clearer view of what modern finance capabilities are and why they are important. I believe the focus is going to be on efficiency, resiliency, and having clear controls so the next time a crisis occurs, things should be more manageable.
Automation is important for both efficiency and resiliency, and I think organizations are going to be moving toward automating many more critical activities in the near-term. A lot of the underlying focus around automation will remain, but what will be different is where work gets done and how new controls are implemented to decrease risk.
Molly: What advice do you have for companies on how to best approach transformation when we emerge from this pandemic?
David: Coming out of this, leaders should assess the new normal, identify where they need help, and determine the most pressing items, so they can prioritize. It typically makes the most sense to start with the things that take less time but have high impact, and depending on what resources you have, which changes you can make quickly to gain better visibility and control.
Molly: Accounting and finance teams typically hesitate to take on transformation projects for one of two reasons: a lack of budget or resource constraints. How do think these two things will be impacted by the current situation?
David: Organizations are already operating very lean, and many will have to pivot from the transformations they previously had in mind to what’s now required. Leaders should reassess the business case and focus on the non-negotiables: what’s mandatory versus what would be nice to have.
This normally comes back to capability—what are the capabilities you’re providing, and how do these get you closer to your longer-term vision, which will need to align with the new reality. Having access to resources in an efficient manner while managing everything that’s going on is equally important.
Molly: There’s something about the word transformation that sounds very visionary, whereas closing the books and reporting is obviously required. Do you think organizations are now going to view transformation initiatives or creating efficiencies as required, because without change and improved processes, closing the books virtually may not be possible?
David: Yes, implementing automation or re-architecting processes—looking at how you do things and why—will enable organizations to become more resilient and may likely end up a specific requirement for business continuity in Accounting and Finance.
Molly: How should accounting and finance organizations approach this first virtual quarter end? What leading practices should they be considering?
David: So much is happening simultaneously right now, which just adds to the complexity. It’s essential to have an effective Finance command center in place that aligns people, has clear communication and governance, and establishes the structure to react.
Put an early detection system in place so if things go wrong, you know about it sooner rather than later. And stay connected to your people and what their needs are. It’s important to check in and make sure your valued people have what they need during this uncertain time.
Learn more best practices for adapting to a virtual close process and building confidence in these uncertain times.