Published: 28th May 21
Categories: Customer Service, Money
The Impact of Lockdown on Running a Finance Department
As we reflect on the last 12 months and what lockdown and the COVID-19 pandemic meant for businesses right across the world, it is also time to reflect on how it affected day to day operations. Particularly that of running a finance department. The way consumers handled money changed, as cash became contaminated and contactless became king. The hospitality sector was one of the worst hit as doors were closed more times than open, social distancing meant less people passed through venues, meanwhile furlough schemes were a boost from the Government.
Finance teams, whether in-house or outsourced, worked remotely and dealt with on-going reporting and client’s finance requirements. Forecasting for the next few months or even weeks were tough as calls were made to close restaurants, bars, shops, gyms, leisure facilities and hotels within a matter of days with stock left to waste.
But what can companies take away from these challenging times to future-proof finance departments? Although it is easy to ponder on the past, there are a number of benefits and new ways of working that we can be positive about.
Many employees were asked to work from home, which meant utilising Skype, Zoom, Microsoft Teams and accessing documents virtually. If ever there was a time to digitise paperwork such as invoices, receipts, pay slips and reporting, it was now. No longer could finance teams pop to the admin office to grab a document. Innovation was imminent. Not only did this make individuals aware of how much they needed to be able to access accounts online, it revolutionised how multiple team members could access them from anywhere in the world – more so than ever before.
A Sign of the Times
This new virtual necessity of being able to administer finances online is a trend that has been rising throughout the last few years. The benefits are plentiful. It increases productivity, organisation and the ability to search and extract with ease. Lockdown was an opportunity for businesses to invest in new applications and software to assist with accounts that could make this possible. In 2020 Xero saw a 19% increase in subscribers taking its reach to 2.45 million. The proof is in the profit for how finance teams relied more on the advantages of digital technology. It’s also worth noting that online sales went through the roof suggesting that it’s time to potentially offer e-commerce services for your business where possible.
Savvy Finance Teams
Data is king. As finance departments began to transfer their accounts digitally, a fresh new approach to accounting opened up. New data-management practices meant better automation, saving time and money in the long run for employers as a whole. Plus mobile and desktop apps integrated in a much more cohesive way that made the headache of number crunching a breeze.
Support for Businesses
Throughout the pandemic B2C SMEs took a particular hit, but there were a number of initiatives that were there to assist. From business rates relief to furlough schemes, grants and tax return extensions, it took the pressure off finance departments and allowed them to digest all this new information. However, adding up the numbers was a challenge as stocks changed patterns from previous years, customer numbers fluctuated and teams in general decreased. Finance departments were asked to cut costs and strong decision making was needed to let managers focus on the day job.
Forecasting For The Future
We have taken away that forecasting for the future can be difficult when unexpected challenges such as COVID-19 arise and turn everything upside now. Finance departments now need to look beyond transnational activities, tax planning, internal audits and enforce financial risk management to prepare for another ‘worst case scenario’. Many have learnt to expect the unexpected. Although we are hopefully over the worst of the pandemic, the last 12 months have taught entrepreneurs and companies that emergency funds are a must. It’s also important to note what has and hasn’t worked, and what you need to plan for in case of a financial dip. But with this new way of working with virtual accounts, looking at the numbers over the last year is now better laid out in front of you in a way that’s easier to digest.
Just like the roaring 1920s, with the recent opening of pubs and restaurants in the UK, companies will thrive again. Financial forecasters have already predicted that hospitality is going to see an impressive boost – especially local businesses who rely on that community spirit.
This reflection has highlighted in particular that your finance department can be operated remotely from anywhere in the world. Perhaps it’s time to trust Virgate’s renowned service who can support your industry and sector with our dedicated team of experts. We were ahead of the curve with digitising finances and our clients have witnessed the benefits. See how we can support you by seeking the specialists who understand accounts, even during the hardest of times.
If you are looking to outsource your current accounts department, or are looking to introduce an accounts function due to business changes, then contact Virgate to learn how we can help.
Tel: 01452 226111