5 tips for running a successful remote close

June 29, 2020 11:31 AM

Even before the outbreak of COVID-19, CFOs and finance leaders faced an increasingly complex landscape, driven by a multitude of social, political and economic threats. Few could have been prepared for the impact of a global pandemic that has changed the very nature of business as usual.

Today, with the majority of their workforce operating remotely, many forward-thinking finance teams across the world have or are preparing to push the button on their first remote close. Closing the books and using multiple systems even under normal circumstances can be complex and cumbersome. It can be even harder when most employees work remotely and there’s no chance for impromptu over-the-cubicle check ins. The remote or virtual close brings many new challenges to the table, including employee communication, risk assessment, process changes and control of documentation.

In doing our company’s first remote close, we identified five top factors to ensure success for all finance leaders.

Coronavirus remote work telecommuting — Claire Tu, an employee at Reprise Digital, works from her home in Shanghai during the coronavirus outbreak.

The remote close has shown us that through careful planning and focused communication, we can be as efficient remotely as we are in the office. But, more importantly, it’s shown us that we are flexible and agile: critical strengths for any modern accounting team in today’s changing world.

Identify "close killers"

Start by asking what needs to change during the remote close. At our company, Workday, we created a survey to highlight risks across the team. We needed a holistic view to ensure nothing was overlooked and that we were pivoting in the right direction. This is the opportunity to identify problems, both technological and cultural, that could prove to be close killers. We discovered that some of the team required updated laptops, new screens and better support for WiFi.

We also asked our internal audit team to review some of the more important and impactful controls to confirm they were operating as they should. Financial controls need to operate as efficiently when working remotely as they would during any quarter end.

Lastly, the results of the survey re-emphasised the importance of "communicate, communicate, communicate." Focused communication with all stakeholders is paramount throughout the close and up to the filing of the 10-Q. Quick hallway conversations are no longer possible in a remote work environment. Communication is key to ensuring that emails are not misinterpreted. Checking in on a 1:1 basis or as a team via Slack, Microsoft Teams or Zoom work really well.

Construct a controller command center

We enhanced existing metrics and dashboards that would help guide the close and focus on risk areas, much like a “controller command center.” Cash is king and, arguably, never more important than now, so cash collections and the effect of AR aging were important to enhance in our metrics. The command center also included P&L and expense trends, which gave us the ability to make decisions in a timely manner. With dashboards and real-time reporting, you can more quickly identify if there is an issue and focus the team on solving it.

For example, the effects of the CARES Act, delayed travel, canceled events, etc. ,must be accounted for. We did add an extra tag in Workday, specifically for COVID-19, which enabled us to extract anything extra cost-related to the virus. We were able to analyze the numbers, with and without the COVID impact, all within our command center.

Plan as a guiding light

Perhaps the most valuable guide in times of a crisis or uncertainty is the ability to partner with FP&A in order to build a plan and assess the accounting implications. With the effects of COVID-19 and the ever-changing landscape, the plan acts as a guiding light to help finance leaders to understand what the actual numbers should look like, help identify areas that need more attention than normal, and highlight where numbers don’t look quite right as they work through the close. For example, COVID-19 impacted event budgets, as in-person events were canceled. Many planned events may have amounts in prepaids which may no longer be appropriate, and cancellation clauses need to be assessed, etc. Being able to contrast what happened with what was supposed to happen promotes confidence and brings focus to any accounting risk areas.

Monitor and manage

One constant throughout close is reviewing and re-reviewing trends and dashboards, performing detailed analysis and looking for unusual items — all of which can be done as effectively remotely as in the office, with the right tools. Ensuring FP&A and accounting are looking at the same data is critical as there is no longer an opportunity for casual discussions over the cube to uncover inconsistencies — and there is no time to reconcile data sources should there be more than one.

Given that shelter-in-place orders curtailed the ability for in-person discussions, we relied heavily on technology tools that monitored the process end-to-end so that, as one person finished a task, the system notified the next person that it was their turn. The technology also tracked changes and automatically captured electronic information, effectively setting up an always-on audit construct that ensures compliance and the ability to share information with internal stakeholders and auditors after the close.

It’s also important to have visibility into journals that may be pending in the system. The ability to see the audit trail of a transaction at an aggregate level and view where a transaction might be stuck in the process is key so that you can take action on any transaction that requires resolution.

And with account reconciliation and certification being everyone’s key control, the related dashboard is very important. With it, I am easily able to see the status in real time and ensure all are completed and certified before we report out.

Having everyone in accounting and FP&A looking at the same data in one system makes everything easier and more efficient, and avoids meaningless conversations around “my data is different to yours.” This keeps everyone focused on why the real-time data is the way it is and leads to a tighter and more efficient close process, leaving more time for analysis rather than reconciliation between data sources.

Keep it human

Closing the books is a stressful time under the best of conditions. Doing it remotely, while our people face their own personal challenges, adds another layer. Focusing on the human side and maintaining relationships remains critical to regular day-to-day work as well as the close. Today we rely on Zoom for 1:1 meetings or team meetings. Whether it is to check in on how someone is doing or it’s actually a work-focused meeting, I have found that “cameras on” is the best way to stay connected. Having time and making real authentic connections with my team is the most important part of belonging to a high-performing team. And let’s face it, that’s what makes it fun — yes, even the close!