Financial control is the framework that helps businesses develop financial responsibility to shape how capital is allocated and spent. However, this means the finance and accounting teams have to have all the correct information on hand at all times. While this was possible in an in-office setup, remote work opened a Pandora’s box.
With distributed teams, incomplete financial records, and broken communication, finance teams across the globe stand the threat of losing financial control over expenses given the remote scenario. This could lead to inaccurate financial records, bad business decisions, no-cost optimizations, and even financial leaks. This brings us to the question, where do businesses start when it comes to remote financial control?
A simple starting point would be to embrace technology and other automation tools necessary for this transition. By technology, we are simply talking about invoicing, accounting, or expense management software that companies can easily access without any significant IT infrastructure change.
While this might seem daunting at first, businesses across the globe are now quickly moving to automation-driven technology to do the heavy lifting for them. This blog is a business-use case for the same. Let’s dive in!
How can your organization maintain tight financial controls during remote work?
1. Reevaluate Your Current Financial Controls
CFOs should sit down with employees to begin conducting risk assessments which can enable them to understand if any existing controls don’t work or have become less effective since the onset of remote work. For example, most manual processes that rely on face-to-face communication and collaboration fall under this category.
Additionally, this assessment would point out vulnerabilities that are a higher point of concern in a remote environment, letting finance teams know which areas or processes would need to be adjusted immediately.
While auditing all your internal processes, ensure enough input is taken from all stakeholders involved, from accounting staff to managers, and finally from financial controllers to the CFO.
If any particular process has been revised, ensure the changes are documented thoroughly and communicated to every staff member involved. The advantage here is that when staff members learn about the refinements, everyone is on the same page, enhancing efficiency and overall employee and financial productivity.
Be sure to communicate changes to all departments to ensure alignment on revenue operations between teams.
2. Consider using automation-driven software
Buffer’s 2021 survey on the state of remote work had revealed 98% of participants had opted for working remotely at least some days a week for the rest of their careers. In addition, this same report showed that around 41% of participants had praised how their collaboration and interactions with fellow employees had improved with the switch to remote work. A large part of this achievement has been attributed to their organizations implementing better tools that have enhanced standard processes over time.
If you are looking to develop a set of high-performing employees and finance folks, here’s a list of automation tools to ensure your teams stay efficient and engaging:
- Slack for company-wide communication.
- G-Suite secure storage for all your files.
- Notion for documenting all critical information.
- Zoom for all your video-conferencing needs.
- Fyle for a seamless expense management process.
- Quickbooks for hassle-free accounting.
- Hiver for managing finance shared inboxes like invoices@ and payroll@ from within Gmail.
- LiveHelpNow for your helpdesk support and ticketing.
- TimeCamp for attendance tracking and time budgeting.
- HubSpot for CRM and managing contacts.
3. Streamline expense management processes
Having 100% control and visibility into business expenses and other operating costs across departments and cost centers is crucial in the remote setup. Additionally, if your business has your employees and finance department spread across multiple locations in a country or various countries, it becomes critical to have a centralized expense management system.
Take, for instance, the example of an expense reimbursement software.
On the employee front, the software works where your employees work. This means they can report their business expenses from simple everyday apps making reporting easy. The software also comes with powerful OCR technology that auto-populates employee expense reports. This means zero added work for your employees and no manual errors or troubles with the IRS for your business.
On the finance front, the software can customize and enforce complex business rules across departments, expense categories, and more. The software also has a real-time policy engine that checks and ensures only policy-compliant expenses get through. This frees employees from the stress of remembering and complying to set company expense policies. It also makes expense reporting a breeze for finance teams as only compliant expense reports get to them for verifications.
Likewise, businesses can also adopt other technology to streamline and automate critical financial processes. This would add a layer of accuracy and give finance teams the accountability, visibility, and control they need over business finances.
4. Create and enforce expense policies that eliminate expense fraud
Preventing expense fraud would mean crafting expense policies that are concise, clear, and free of any form of ambiguity. Ensure employees are not just aware but repeatedly reminded of budgets, per diem rates, limits for each cost center, and cash advances. This ensures that they know how easily finance teams can catch them if they indulge in fraudulent practices.
While doing this manually may consume time, resources, and effort, there is a better way of going about this. Businesses can switch to an expense software that lets finance teams draft complex business rules and enforce them when employees submit expenses. This means no back and forths and assured compliance at no added costs! The software also provides finance teams with insights on policies, cost optimizations, top spenders, top violators, and more. Based on this, finance teams can further fine-tune their policies to ensure compliance is a given at your organization.
5. Periodically Review Cash Flow Reports
Having tight financial controls in place can enable company executives to understand your business’s cash flow better. This is critical because, in a shrinking economy, “liquidity is king,” as mentioned by Priya Sunder, Co-Founder of Peak Alpha Investments.
Apart from limiting the risk of expense fraud, having financial control enables you as a business owner to understand your organization’s cash position as it tells you when significant amounts of money are being withdrawn or deposited from your bank accounts.
Frequent reviews of cash flow reports allow your company or agency to scale costs (higher or lower) in such an uncertain environment. When the economy recovers, it could receive multiple setbacks, wherein enterprises must react quickly, and these periodic reviews ensure that your business is resilient to take on these trying times.
Parting Thoughts
The pandemic has pushed finance and accounting teams to improve their processes to ensure in-office productivity while working from home. Businesses attribute a large part of this improvement to adapting technology, mainly cloud tools, that enable employees to review processes anywhere, anytime, and using any device. So, it’s safe to say, now is the time to make that change!
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