This view is traditional in Brazilian companies: during the months of November and December, meetings are held for budget forecasts for the various sectors during the following year. However, the financial loss caused by the COVID-19 pandemic has created a “ripple effect” in finance with an impact that remains and especially in the current scenario. Ignoring this, now in the first quarter of the year, many businesses are facing budget deficit for strategic projects and even maintenance of fundamental teams.
It is important to remember that, as of 2020, we are living in a completely unusual landscape. The medium and long term planning overview is no longer able to guarantee the sustainability of the project budget. The financial loss with COVID-19 also affected many peripheral expenses, usually undetected “with the naked eye”. Therefore, the importance of putting a magnifying glass on short-term expenses is increasing. They are no longer just operational: they are strategic.
Management of short-term accounts quickly identifies surpluses and deficits, making it possible to assess the best way to distribute or cover them. The “ripple effect” created by the financial losses of COVID-19 is not visible in months: it is visible today. Hence, cash flow management has lost its only operational aspect in day-to-day operations, in order to gain a strategic framework in the accounting management of companies.
It is no surprise that investing in technology has become a priority for CFOs (Chief Financial Officers) with the COVID-19 pandemic, given the increased focus on security, compliance and risk and the need for quick decision making. According to Rimini Street’s 2021 CFO Peer Insights: Digital Transformation and IT Spending Priority Survey, 80% of finance executives placed digital transformation on their top five list of corporate priorities.
In the opinion of 95% of CFOs, in fact, investment in technology is the key to improving business in the face of crisis caused by the pandemic. The survey surveyed 1,572 executives and finance leaders at companies with at least $200 million in annual revenue in 13 countries, including the United States, Brazil, Germany and Japan.
In the case of accounting, the use of corporate performance management (CPM) platforms gains strength, which can provide financial forecasting in the short, medium and long term, providing professionals in the financial sectors a firm and accurate management of company resources , no blind spots. Among the main features are: automation of financial statements; analysis of discrepancies; planning/modeling scenarios and risks; accounting consolidation; financial reports; Creation of data review and monitoring dashboards for key indicators of the company.
These tools allow for the elaboration of management details needed for analysis that help companies achieve their financial goals. Given the need for quick response to the impacts caused by the pandemic, one of the advantages of technological platforms is the generation of financial statement reports in a matter of seconds by automating manual processes.
We have seen projects get suspended and even teams cut off due to lack of short and medium term vision of provisioned funds in companies. Tracking short-term flows avoids such surprises and helps build links with long-term budget forecasting.
Therefore, investing in technologies that fulfill this role does not simply mean speeding up processes. It is also about going beyond simple operational reporting and actually turning accounting management into a valuable strategic resource for the maintenance and expansion of the business.