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Watch Out for 4 Financial Challenges Businesses Face When Going Virtual

Posted by Celene Robert to Business Advice, Startup Tips, Coronavirus

Dangers of Remote Work 

If you’re reading this article in 2020, there’s a good chance you’re reading it at home.


We’re witnessing a radical shift in what “the office” means. Practically every non-essential business that has survived into April has gone virtual. Rather than working in shared physical locations, millions of people are doing their jobs remotely. They’re still communicating, collaborating, planning, strategizing, inventing, researching, developing, designing, selling, servicing customers, and more—but they’re doing it from their personal desks, dining tables, basements, garages, and bedrooms.


Right now, of course, most of us have no choice but to work from home due to the coronavirus pandemic. But as quarantines, shelter-in-place orders, and social distancing protocols are eventually lifted, remote work will almost certainly stick around. According to research by Gartner, approximately 41% of employees will continue to work from home at least some of the time in the post-COVID-19 world.


There are plenty of reasons to welcome this as a positive change—cost savings, increased employee engagement, and better flexibility, just to name a few. However, remote work also brings novel challenges, particularly in terms of managing the books, ensuring strong financial performance, and maintaining the bottom line. Here are a few all-too-common issues to look out for.


Security Risks

You’ve seen the headlines:


“Passwords and email addresses for thousands of Zoom accounts are for sale on the dark web”


“Zoom and Google Hangouts banned by large companies and government organizations”


“High-Stakes Security Setups Are Making Remote Work Impossible”


Virtual office technology, and especially video conferencing technology, is rife with potential security issues. Many of those issues can be mitigated through updates and patches, others through smarter end-user behavior (e.g. making sure meetings are password-protected). But the nature of remote work—different people using various systems on disparate devices—means there will always be some level of vulnerability.


It’s essential to balance access with security. You need to ensure your team members can do their work while safeguarding sensitive information at every point throughout the process.


One area to prioritize is your company’s financial data. Make sure your key financial employees and partners—your CFO, accountant(s), bookkeeper(s), etc.—can obtain the information they need; restrict or limit everyone else. You may want to control access by role, giving certain people specific permissions based on their job descriptions and levels of seniority. In any case, it’s a good idea to have a policy in place outlining your protected information and how employees and contractors should store, handle, share, and dispose of it.


Silos

Team fragmentation and isolation are two major downsides of remote work. Without a good structure for ongoing communication, virtual office arrangements tend to exacerbate existing barriers between teams and create new obstacles. When people work on different projects, serve different functions within the organization, and log on and off at different times, they begin to live within their own bubbles, down to the individual level. Distractions at home—children, pets, chores, medical emergencies, and so forth—certainly don’t help.


Silos are distinctly dangerous for the accounting department. Finance can’t run independently of operations, sales, IT, HR, or another central business unit. New initiatives, policies, hires, tools, and processes need to fit within the organization’s budget and align with the financial plan. At the same time, decision makers shouldn’t be left wondering if the business has resources to spare for their ideas and teams.


Fortunately, it’s possible to break down silos with relatively simple tools and tweaks. Create channels for communication. Focus on building relationships. Different divisions should coordinate with each other and the accounting department regularly via routine meetings and check-ins. Consider using a unified dashboard for ongoing projects and priorities—a comprehensive overview of what’s going on at your business today, this week, this month, this year. Encourage team cohesion and camaraderie with virtual trivia, game nights, happy hours, or another form of off-work socializing.


Poor Visibility

This is often a symptom of siloization, but it can be a separate and deeper problem. In organizations where there’s poor visibility, management and leadership have little to no idea what employees are doing on a daily basis.


Perhaps it isn’t clear how long or often people are working, or what they’re working on during that time. Or maybe processes and conversations are taking place without proper oversight. A salesperson could be having interactions with a customer that don’t get logged in the CRM platform. Employees could be inflating or—as is more often the case—underreporting their hours.


Whatever it looks like (or rather, doesn’t look like) poor visibility can jeopardize your organization’s financial stability. If you don’t know what you’re actually spending and earning, you’re in trouble. At best, you’re allowing unsustainable practices to continue; at worst, you’re undermining your future, burning through cash, and inviting serious legal risks.


It’s crucial for employees to report their hours and activities, and for managers to touch base with their subordinates regularly—through both collective and one-on-one meetings. Managers sometimes need to read between the lines and determine what employees may not be telling them. For instance, it’s important to be able to notice the signs of overworking and burnout, and to proactively offer relief.


Mismanagement

On the other hand, too many check-ins can devolve into micromanagement, where supervisors meddle in employees’ work, causing delays and frustration. People throughout the organization need to have the autonomy to make their own decisions without clearing everything with the boss first. Micromanagement is always harmful, but it’s particularly virulent in remote work scenarios, where emails and calls may go unanswered for hours or days.


And there’s financial mismanagement. An underqualified or overwhelmed bookkeeper, accountant, or CFO in a virtual office can cause even more damage than a bad manager. You can’t afford to let the wrong person handle your books when that individual works off-site and largely out of sight. From inaccurate reports to fraud, there are countless risks your business faces when the members of your finance department are (literally) left to their own devices.


That said, it isn’t necessarily better for owners and executives to manage accounting by themselves. Unless you’re a CPA, you lack the knowledge to prepare financial statements, file taxes, and control expenses in a timely, accurate, and cost-effective manner. If you do have financial expertise, you almost certainly don’t have the time and capacity to take it on in addition to everything else going on with your business right now.


There’s never been a more important time to optimize your accounting. With inDinero, you get a dedicated accounting team that’s built to meet your business’s needs now and over the months and years ahead. With our on-demand platform, you can save money managing your finances while avoiding the risks inherent in remote, in-house accounting. Ask us how we can help you.

About the author
“Celene

Celene Robert

Content producer by day, movie guru by night, Celene Robert is a PNW native and proud owner of eight pairs of Birkenstocks. She's passionate about giving inDinero customers a voice and enabling the dreams of innovative entrepreneurs.


Disclaimer: The inDinero blog provides general information about tax, accounting, and business-related topics. It is not intended to provide professional advice. Read more in our Terms of Use.