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How Coronavirus challenges can uncover a new financial close

Caffeine-fueled days and pizza-powered nights in the office are just another month-end close for many finance professionals. But as today's organizations take decisive action to prevent the spread of COVID-19, traditional finance processes may never look the same again. How can finance functions create new working practices, keep employees safe, and also finalize the numbers and close the books on time?

Organizations that have moved from on-premise software to the cloud are at an advantage. There are three components that are important to this transition, plus a fourth that has recently become critical.

  • Systems of record: An organization's source systems and enterprise resource planning (ERP) convert business transactions to accounting transactions. But they can be slow. Though it's not an overnight transition, cloud-based ERP solutions generate value thanks to their usage-based pricing models and agility, helping businesses quickly scale up or down during times of uncertainty.
  • Systems of engagement: Plenty of organizations have already invested in systems of engagement, many of which are in the cloud. Whether these systems manage workflows for journal entries or reconciliations, or track the financial close process, they allow companies greater access and control over their processes. If you have licenses, this is a good time to think about how you're using them and how organization-wide adoption could add value.
  • Systems of insights: As your balance sheet manages growth and profitability, it's important to feed it fast, accurate insights of your costs, revenue, debtors, and creditors. Organizations have struggled to upgrade their analytics capabilities. But with advances in technologies that improve data ingestion, normalization, and governance, and make insights more digestible, you can offer more people in the business access to these insights. And by integrating artificial intelligence, finance teams can also bring greater prediction and forecasting capabilities to stakeholders.
  • Systems of collaboration: This is the newest and most important component that can make a difference to the financial close and organizations as a whole. Systems of collaboration allow people to work together regardless of where they are in the world. Controllers and accountants are becoming expert users of tools such as Zoom, Microsoft Teams, and Mural, as they build adaptive workforces that replace late-night office meetings with virtual spaces to close the books.

To support these components, centralization will become a bigger theme for many companies, driving touchless processes across countries. The last mile of statutory reporting and tax processing will also benefit from greater standardization with the right talent and technology to support the organization.

Making the transition to the cloud

Though leading companies already enjoy the agility their cloud-based finance functions provide, there are helpful steps you can take if you're at an earlier stage of that journey.

  • Define your cloud strategy – Get a clear picture of your IT landscape and determine the applications that make the most sense to move first
  • Prepare your migration plan – Before you make the move, consider a streaming-based solution, and test how your applications perform in the cloud (adoption of agile approaches is most common)
  • Improve your cloud usage – Once live, keep fine-tuning your cloud environment to make sure it aligns with your organization's demands, and bring in new capabilities such as cost controls and governance

Visit our COVID-19 buiding resilience F&A page

At times of both uncertainty and stability, having a robust, flexible infrastructure gives finance teams greater confidence in their ability to support the business. And though we're currently focused on keeping our companies operating as usual, the lessons we learn today will help shape a stronger, more agile finance function for tomorrow.

Learn more about how Genpact can help with record to report.