This has been, to put it mildly, an interesting first quarter. We are facing challenges and disruptions on a global level that affect almost every aspect of our lives. Everyone has had to adapt in order to function during this time. Businesses are no different. Some very hard decisions have had to be made, and now, companies are wading into return to work planning.
Unfortunately, we are not out of the woods yet. Hopefully, we will continue to make progress and move back to normal (or a “new normal”) as safely and expediently as possible. Eventually, all stay-at-home orders, face mask restrictions, and other safety measures enacted to lessen the spread of COVID-19 will be lifted and life will go back to a new normal. Businesses will open back up, children will go back to school, and workers will go back to work. (Though where they will be working from may be up for discussion.)
Depending on the type of business, this return could look drastically different from before the restrictions were put in place. Companies are coordinating across all functions and departments to apply what we have learned from this pandemic. Accounting and Finance teams play a big role in this coordination. Below are some items to think about when preparing a “Return to Work” plan.
Close Calendar Adjustments
Accounting departments within companies take pride in shortening or having a short “close-window.” What this usually means is that the accounting team works a little extra right after month-end close for a few days to complete all the required tasks. This leads to a less stressful rest of the month and a turnaround that makes the C-level happy. This time before companies return to work is the perfect time to implement close calendar changes that could either shorten the close-window and/or reduce the stress on the accounting team.
Are there items in your close calendar that can be moved to before or after the close period? Now is the time to identify those tasks that do not provide maximum value/return to the company‘s close process. Use that time to spend on more valued activities or to shorten the close-window.
For example, many companies perform balance sheet reconciliations during close to review monthly activity and perform an account variance analysis. Reviewing your chart of accounts and assigning a Balance-Level based on materiality (High, Medium, or Low) and Risk-Level (High, Medium, or Low) could identify account reconciliations (Low balance and Low risk) that could be shifted to the post-close calendar or to a quarterly or semi-annual reconciliation. Performing a high-level variance analysis (account balance-only) against the prior period in tandem is an easy way to identify any account balances that had a sudden spike in activity and would prevent it from being missed.
Standardization is also a wonderful way to reduce stress and time spent on the close. If your company has suspended operations during this time, use this opportunity to clean up your folder structure to make things easier to find. Create standardized forms, combine duplicative Excel workbooks, add macros to existing Excel files to automate tasks – all of these can be done relatively easily and will shave off time of your close.
Work-From-Home / Work-From-Office Equation
There is a real possibility that the return to normal will be a gradual or stair-step process. Even without a government mandate, companies may still find it useful to stagger their return policy. Finance and accounting teams can use this time to come up with different plans to implement based on different return-to-work paths. These plans can and should be revised as new information is provided.
One activity that may prove useful is to review the finance/accounting functions to determine which of those require, or are maximized by, in-office attendance or collaboration. These vital in-office functions could then be scheduled to specific times in order to achieve the best results without adding complexity. They could be partnered with the company’s return policy, such as work-from-home days, staggered in-office work hours (arrival/departure times to/from work), limiting staff meeting sizes/time limits, and any other changes to ease the transition. These policy changes could be temporary, or if they prove to be effective and efficient, made permanent.
Planning for the Future
In addition to implementing changes now that can affect the immediate future, Finance teams should be working in coordination with HR to account for any company changes that will affect the budgeting process or budgeting assumptions well-before those budgets are needed. There could be changes that affect the rolling forecast, the budget for the upcoming year, or the 5-year forecast. Some items to consider are:
- Is there a change to the floorplan (such as social distancing at work) that will require an update to the Cap-Ex budget? Will more cubicles need to be built and accounted for?
- Will the company be leasing more office space to achieve a safer work environment?
- If shared costs are allocated based on square footage, will these allocation formulas need to be updated or revised?
- If the company decides to adopt a flexible work-from-home schedule, how will this affect the budgeting process? (e.g., Will rent costs be lower as less office space is needed?)
There are many ways that our return to “normal” could happen. Preparing for as many of these paths as possible before they are needed is essential to lessening any confusion, downtime, or surprises that may occur along the way. Finance and Accounting teams can also use this as an opportunity to revise or reconfigure their existing policies and procedures. Adjustments will be needed to successfully navigate the changing landscape. Good ones will allow you to focus on your business instead of your process. The best ones will redefine how your company operates efficiently and effectively.
We Can Help
If you’d like some support in planning, we have a team of 90+ consultants that are able to work remotely across California. You can learn about the type of work we’re performing in the pandemic by clicking on the image below, or you can also contact us to start a conversation.
About the Author
Jeff has fifteen years of experience in all areas of finance and accounting, including financial close, FP&A, budgeting and forecasting, financial modeling, and financial systems and has served a variety of industries including entertainment, manufacturing, energy and consumer products. Jeff started his career at KPMG in their audit practice and from there held a variety of finance and accounting roles at Twentieth Century Fox, The Coffee Bean & Tea Leaf, and Warner Bros. Jeff holds a Bachelor of Business Administration from East Tennessee State University and a Master of Accountancy with a concentration in Financial Systems from The University of Tennessee.