By Carlo Gualandri, Founder and CEO of Soldo
2020 has been one of the toughest years for finance teams on record. Although the end is seemingly in sight, the coronavirus pandemic has shaken businesses across the globe to the core. Regardless of the success of mass vaccinations, it’s clear that the consequences of the crisis will be felt for many years to come.
As the first lockdowns came into effect, businesses suddenly found themselves having to adapt to an unprecedented level of disruption and were forced to completely overhaul their operational models. Organisations up and down the country swiftly found they didn’t have the necessary systems and resources in place to facilitate working from home, creating an urgent rush of employees, managers and business leaders flocking to procure any working from home equipment they could get their hands on.
It was a rapid transformation – according to ONS figures, by April, almost half of the working population were working from home in some form. And while that transformation has led to a number of advantages – primarily that remote working en-masse, can in fact, work, there are also many challenges. We regularly hear about concerns that remote working has a negative effect on communication, productivity, wellbeing, motivation, coordination and creativity. While these apply across departments, finance teams have been particularly hard hit – and here’s why.
Remote working has meant a significant change in companies’ spending patterns. There’s been a huge shift in the spending habits of businesses, with exponential growth in ecommerce, digital services and online advertising. Meanwhile, there has been a significant reduction in employee expenses such as travel and entertainment. Without line of sight access, how do finance teams manage operations effectively to cope with such a significant swing in company spending?
Remote working is exacerbating the challenges finance professionals already faced when managing business spending. Research by Soldo reveals that over 72% of British finance directors say that their teams are “unprepared to cope in a complete or partial virtual working environment”. There has been a failure to adapt to digital workflows, resulting in over 58% of UK businesses being unsure of their current level of working capital.
While the pandemic has meant that the strategic value of the finance focus is emerging from the shadows, 64% of finance professionals say that the unnecessary stress of everyday tasks such as reconciliations prevents a true focus on strategic matters. Indeed, these reconciliations aren’t trivial matters, with over half of finance directors (54%) saying that their working capital is so low that lost VAT receipts “threaten business stability”.
Finance teams have thus found themselves in the dark. It’s clear that they need to find new ways of working that are better suited to the changing economic landscape. They need greater clarity, visibility and control of their finances to be able to pivot quickly to thrive – or even survive.
Fortunately, we live in an era where the tools to address the new challenges of remote working are readily available – whether this be Zoom and similar platforms for meetings, Slack to ensure continued effective collaboration across teams or Soldo to stay on top of employee spend. These have quickly become a vital boon as we move to a more permanent remote working culture. Research from Future Forum shows that the majority of knowledge workers never want to go back to the old way of working. Only 12% want to return to full-time office work, and 72% want a hybrid remote-office model moving forward.
Businesses that wish to prosper must accept that remote working is here to stay for the long-term. They must therefore adapt their financial practices to effectively manage this new normal to keep on top of their expenditure in an increasingly tumultuous climate.