Among the many firsts that COVID-19 has compelled businesses to adopt is the virtual close—executing the financial close in a completely virtual environment. For many financial leaders, driving a virtual close with a remote finance workforce hasn't been easy, but smart planning and a shared commitment is helping. Our recent webcast discussed some of these key themes as it relates to the challenges, implications and approaches around performing a virtual financial close and forecasting.
Evolution is never simple. The financial close is a highly orchestrated process in which team members depend on each other to produce deliverables on a tight schedule in a precise sequence. This system of moving parts may feel out of sync as well-practiced routines move to an unfamiliar virtual environment. But the finance function is in a position to seize a greater leadership role by using data to guide organizational strategies and spark business growth.
And while technology is key to a nimble finance function, real advancement requires a more holistic approach that includes:
- Honest assessment: As organizations navigate continued uncertainty while moving toward recovery and an emerging new reality, they should have a forward focus on which actions in key areas of the close process to improve. With a willingness to change, and with a focus on the enterprise-wide strategy as the end objective, financial professionals can play a larger role in the recovery by maturing their technology, people, processes and data governance to take full advantage of new tools and drive better outcomes.
- Financial reporting and disclosure: There are increasing risks on maintaining the integrity of financial reporting during this period of change. Organizations need to immediately establish and continuously maintain a complete list of critical and organization-specific financial reporting topics. Communication across the organization is critical to understanding the decisions being made and reflects the integrity of financial reporting. Controller teams are feeding information to real-time users for these matters more frequently. The path for resetting financially for organizations will be lengthy, and during this period stakeholders are going to demand transparent and updated financial reporting.
- Stronger data: Controller functions are realizing that manual processes and outmoded systems hinder the virtual close. Manual data manipulation is still far too common, and in many cases the information is prone to inaccuracies or inconsistencies. This can be a hindrance for organizations at a time when the quality and consistency of data is central to the increasingly complex and scenario-based models required to measure the impact of the economic disruption. Broadly speaking, consistency in the data and models that business and finance leaders use in decision making, and those used by the controller function, is critical to the integrity of financial reporting.
The economic downturn is forcing change for the finance function, presenting a real opportunity to step up in support of their organizations' resilience and recovery. It's a daunting process given the stress and new methods of working during the pandemic, but one that begins by honestly evaluating one's current function, identifying the barriers and pain points ahead, and deciding as a team where to focus.
Is your finance function ready to answer the call?
Learn more about how KPMG's Accounting Advisory Services team can support your team with financial reporting matters by contacting me at email@example.com.