Pandemic Prompts Finance and Accounting Experts to Rethink the use of Cloud Technology
The COVID-19 has been forcing finance and accounting teams all around the world to work from home since the past year and a half, and that has prompted many finance professionals and accounting firms to re-assess the situation and consider as to how the cloud technology can be used for accounting services and financial reporting in light of the ongoing pandemic.
Recently, a report has been issued by the Institute of Management Accountants (IMA) in collaboration with the company named Workiva. The said report is based on responses of more than 250 finance and accounting professionals and companies to an online survey. Many accounting and finance professionals that participated in the survey expressed that their employers placed, “use of technology-based accounting and financial reporting solutions”, fairly low on their priority lists. For example, two-third of the respondents to the survey indicated that they have fallen behind other departments in their organizations when it comes to competition for various resources. The companies with proactive leadership timely assessed the effects of COVID 19 on accounting and tax, forecasting, financial instruments, etc. These organizations have not only addressed the outcomes of the pandemic, but have also been successful in keeping their employees’ jobs secured due to continuity of their businesses.
Another key finding of the report was that around 30% of the participants expressed their interest in using technology-based solutions for carrying out different tasks and activities especially those that are related to documenting judgment estimates and management reviews. The report also highlighted that around one out of every four participants said that they are expecting a significant increase in the budget for technology-backed reporting and accounting solutions going forward.
The COVID-19 pandemic has forced a number of companies to move towards the work from home business model since the past year and a half, and this includes the finance and accounting departments as well. However, many employees working in different organizations have returned to their office premises while others are still working from home. Despite the difficulties and challenges which both the employers and employees’ faced initially at the start of the pandemic when organizations shifted to a work from home model, remote technology has provided a lot of help to the finance and accounting professionals in carrying out their job responsibilities and tasks safely from their homes including difficult jobs, such as, auditing services. Successful use of technology in carrying out different tasks and activities by a number of firms operating in different industries has raised the question in the minds of many employers, business gurus and other stakeholders of whether entities should continue using the cloud technology post-pandemic.
Shari Littan, Director of corporate reporting research and policy at the Institute of Management Accountants said that through this survey we found that accounting and finance teams are able to carry out their tasks and activities effectively during the ongoing COVID-19 pandemic. He further said that participants to the survey expressed that they have enough tools for certain tasks and activities that are more difficult and challenging than others. Revenue assessment and Inventory are two of them. In short, the respondents felt that they can discharge a number of their job responsibilities by using different technology solutions.
The respondents to the survey seemed to prefer the latest technology-based accounting and reporting solution especially for two areas: control succession, and assessing expectations related to revenue.
Littan said that responses of the participants to the survey tell us that there is some real interest when it comes to succession in different positions and roles. Further, he said that one thing a collaborative or cloud-based platform can help you with is automatically assigning who is going to supervise/ oversee what and who is the second in line of command. This helps an entity in preparing for a situation where a person responsible for a certain task may become unavailable due to any reason. Many respondents to the survey realize that and therefore are interested in the latest technology-based accounting and reporting solutions.
The participants to the survey that are working in private organizations registered more interest in systems for accounting procedures that require sorting data and making estimates.
In a pandemic, things change very fast and therefore it is better to use judgment based estimates than those estimates that are derived by analyzing past accounting figures, current trends and future information. In a pandemic, you don’t know what future has stored for you as well as you have no control over it whatsoever so it’s better to have access to tools that can help you with making appropriate estimates rather than finding the right data and then analyzing it to make judgments.
There is a sense among employees in different companies that technology for their accounting and finance teams is still less of a priority than technology solutions for other departments, said Littan. This is happening at a time when accounting and finance teams in different organizations are being asked to deliver more reporting. Cloud technology can help finance and accounting professionals in responding to the needs of more reporting more quickly.
Cloud-based systems can help with the flow of work when developing and reviewing different reports. A cloud-based system can also help an entity in monitoring management’ performance and reviewing different accounting processes and procedures against which there are reports available as it has the feature of documenting who reviewed information and documents in order to verify different aspects presented in a specific report. A cloud-based solution can also be very in a situation in which you decide to take a look back on how certain business decisions were made, what was the oversight, what was the review and the final verdict. It helps in preserving all your records and information that you used in making a business decision.
However, cloud technology can be difficult and challenging from a cyber-security perspective, and it can be a lot harder to implement proper internal controls and management oversight in a situation where much of the staff is working remotely. To address this, well organized companies have signed up for different types of audit engagements i.e. internal audit, external audit, review upon procedures etc. Overall, cloud technology has proven to be invaluable for a number of organizations belonging to different industries that are forced to carry out their operations remotely due to the ongoing pandemic.