The workforce is increasingly distributed, with many employees planning to work remote even after it is safe to return to their offices. Finance teams have been challenged to reprioritize investments, and will need to adhere to faster accounting cycles to account for future change.
The direct response to the crisis - cutting costs - won’t hold up in the long-term. Now that the initial shock of the pandemic has passed, businesses must develop plans for growth.
Finance teams will play a critical role in arming their businesses with the tools and processes needed to facilitate that growth. To succeed during this uncertain recovery period, finance teams should budget strategically, eliminate friction for a distributed workforce, and reduce manual processes.
Future-proof annual budgets
The COVID-19 pandemic wreaked havoc on 2020 corporate budgets. By the end of March, 62% of companies were planning pandemic-related budget cuts, according to a Gartner survey. Come June, CFOs anticipated cutting budgets by an additional 4% to 11% for the back half of the year.
But it’s not all bad news. CFOs are taking the opportunity to reevaluate their approach to budgeting and be more strategic moving forward. Alexander Bant, Vice President of Research at Gartner, explained: “Most CFOs have told us that COVID-19 has illuminated new (more efficient) ways of working, and they will use this as an opportunity to right-size spend in SG&A functions for 2021.”
To optimize their strategy, finance teams must review and adjust budgets in real time. “When it comes to your 2021 budget, you can’t set it and forget it,” says Peter Nesbitt, VP of Finance at Teampay. “If you’re basing future plans on outdated numbers, you can’t make good decisions.”
Purchases should be visible against the budget as soon as the request comes in--before the transaction actually occurs. When managers and finance teams can view this data in real time, they can move quickly to reallocate funds as needed. Knowing with certainty how much money you’ve spent, as well as how much you’ve committed to spend in the future, allows finance teams to make better decisions.
Eliminate friction for your distributed workforce
48% of the workforce is expected to work remotely after COVID-19 at least some of the time. But this doesn’t mean your business will have fewer locations. In fact, if 48 people of a 100-person company start working from home, that’s 48 additional offices to manage.
That means more spending by more people across more geographies. If you try to funnel every purchase request through a central department, your finance team will be a bottleneck to progress. Instead, enable proactive controls that guarantee compliance, no matter where employees are.
With employees spread across locations, sharing physical corporate cards is no longer feasible. Conversely, forcing employees to use their personal funds for business purchases and then submit for reimbursement after the fact leads to psychological stress.
Distributed spend management software offers a better way. The conversational user interface guides employees through the purchasing process, which ends once the purchase is complete, not with an expense report several weeks later.
Focus on strategy
Growth doesn’t just happen. The business plan you follow today will directly impact your future recovery. That means finance teams must be laser-focused on strategy development and execution.
Manual processes—such as reconciliation, expense reimbursement, and three-way matching—take time away from more valuable endeavors. Cloud-based distributed spend management systems take the tedious manual work off your team’s plate, so they can focus on gathering key insights to inform future decision making.
Furthermore, distributed spend management software provides robust internal controls, so you can get a handle on your cash. By proactively ensuring that employees spend within policy, you can eliminate surprises at the end of the month and stop unnecessary purchases.
In this way, the entire business will adhere to the plan that your finance team so carefully developed. And real-time visibility into purchase requests and transactions allows finance teams to adjust their strategy in the moment to accommodate shifts in the market.
Embrace agile finance to prepare for growth
With 2021 underway, it’s time to scale your business again. COVID-19 has highlighted the need for agility in order to respond to any unexpected changes. Distributed spend management software provides the proactive controls and real-time visibility you need to be agile, which is necessary to position your business for the next phase of growth.
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