While the government’s measures to help businesses survive the pandemic is welcome, it could also be the final straw for the finance team. It is, for the most part, overburdened and under resourced. At this time, the finance team needs to be at full strength to steer organisations through the stormy waters of lockdown and its aftereffects. It’s why, despite the tough economic conditions, the time is right to start investing in your team. 

The biggest governmental initiatives and incentives

VAT changes

While VAT changes may appear on the face of it simple to deal with, this is likely to be far from the case.

The rate change occurred partway through a month, meaning that any underlying systems, such as accounting or operational software, would need to be updated. Depending upon the software, this may be a simple change – the set-up of a new VAT rate in SAGE is straight-forward, for example.

Of course, for those using SaaS software, this would be the responsibility of the vendor; one of the benefits of this method of deployment. For those with bespoke or legacy solutions, the change may be far more complicated, requiring re-configuration or, in some cases, development. Regardless of the tools you use, there should be an element of testing to ensure it is giving the desired result.

You will also need to consider the knock-on implications of related processes. Take the expenses process, where most organisations still use internally developed solutions, including Excel. These all need to be changed, re-distributed and staff educated as to their use. I can only imagine the pain that finance teams are going to experience when the first expense claims hit their desks for checking and processing. The only saving grace is that staff are not out and spending on expenses at the rate they would normally.

Employee based incentives

There are several of these, the most prominent being furloughing and sick pay. In large organisations, the responsibility splits between HR and finance. In smaller organisations, it falls on the finance team.

In the initial stages, there was a need to understand the regulations and make financial sense of this. Then the financial planning aspect, building this into forecasts and providing guidance to make decisions. Then the actual claim itself and accounting for it. Now there is the ending of the scheme and future incentives, both requiring attention.

Business loans and government grants

The loans and grants mirror employee-based incentives. Firstly, it’s about understanding what was on offer, then working out how much was required (through the financial forecast). Finally, it’s about making a claim and dealing with banks (an arduous and thankless task).

If you’re considering a digital finance function change but are unsure on where to start, what to look for or what good looks like we’d be happy to help. Contact us at [email protected].

The need to invest in the finance team and transformation

When you take all these tasks individually, they do not appear arduous. However, when you add these up and take into account the other work that they are doing around planning and cash, you begin to realise the importance of the finance team.

In most cases, the finance team will have absorbed the extra work within the resource levels available, even at a time when they were getting used to remote working. It is what finance professionals are great at, dealing with what is thrown at them and going the extra mile.

As we move to the recovery phase, the finance team is not immune to the clamour for inevitable cost savings and doing more with less. In my opinion, this needs to be resisted. There is a strong case to increase headcount! The levels of stress experienced within the finance team cannot continue indefinitely. Eventually, there will be a straw that breaks the camel’s back.

Yes, most finance teams can improve their efficiency and effectiveness and can potentially cut costs. For too long, the finance team has put up with under-investment in technology and people while delivering more and more to the organisation. However, to achieve this, and provide significant benefits to the organisation, they need the platform, tools, and skills to do this. They need investment to support transformation.

Written by Mark Cracknell, Head of Research, Generation CFO.  For more information on Generation CFO services, please get in touch here.