What Has the Pandemic Taught Us About the Importance of Contingency Planning?
Most of us are ready to get back to normal living. Further, what has the pandemic has taught us about the importance of contingency planning? The threat posed by the coronavirus pandemic is slowly being muted following the successful roll-out of the global vaccination program. Above all, businesses are reopening their doors – reviving normal work for accounting and finance professionals. However, the turbulent business operating conditions inflicted on businesses throughout 2020 and 2021 triggered the build-up of company debts, depleting cash flow and biting into balance sheets. Meanwhile, as economies across the globe that need urgent repair regain stability, we explore what lessons the Covid-19 pandemic has taught us.
Upgrading technology infrastructure and contingency planning – for employees
As the pandemic triggered a landmark shift towards work from home, the technological capacity of businesses was tested. Shifting from on-site working to off-site working for over one year and counting, the arrival of unprecedented events called for internal company information to be accessible to workforces across the country and in a secure manner. Consequently, with a short notice overhaul of internal business operations, accounting and finance businesses were pushed to roll out or fast-track digital working practices.
As part of regular IT housekeeping exercises, contingency planning includes what’s known as a disaster recovery (DR) exercise. The DR exercise consists of preparing and enforcing procedures to preserve the business’s technological infrastructure in a natural disaster and ensure business continuity. Many firms have a Business Continuity/Disaster Recovery (BCDR) plan which included a pandemic plan. Pandemic plans also got a rapid update in 2020.
As part of disaster recovery exercises, employees are trained to work with company information online. Having information online enables employees to work away from the office without disruption to service delivery in the event of a disaster. In addition, accounting firms rely on raw data to conduct financial reporting on behalf of clients, highlighting the importance of operating a paperless office. Paperless practices not only encourage accountants to store information online but migrate existing essential data to online systems.
Upgrading technology infrastructure and making it cloud friendly – for clients
Online accounting software allows both clients and accountants to access the same data and dashboards. Accountants and clients can work collaboratively in an Advisory capacity. For example, Advisory capabilities in financial reporting is exemplified in PATH by Simplex Financials. Although many clients operate online, a small number remain offline working on spreadsheets. As a result, clients are reducing efficiency and making it harder to collaborate. In addition, the coronavirus pandemic continues to teach us the importance of accessibility and contingency planning concerning information recovery.
To improve collaboration, accessibility, and client experience, tools like Liscio or Suralink provide secure transfer of documentation and files. Further, supporting documentation can be gathered and processed with Hubdoc, Vic.AI, or Dext. And we can make payments easier to make and track with mostly free services like Corpay One.
Digitalization of global tax systems
The financial services sector has always been one of the most forward-thinking industries when referring to the application of technology. Taxation
systems across the US and Canada have transitioned online. The pandemic emphasizes the importance of digitizing such systems permanently. In addition to this, upgrading the technological standards of financial institutions plays into the modernization of the tax system, too. Banks have upgraded with vendors like Fiserv, FIS, Jack Henry, and DCI.
An ICAEW review into the digitalization of tax in the US recognizes the Internal Revenue Service (IRS) as ‘extremely efficient at tax collection’ following the computerization and digitalization of its processes over the last few decades. Assessing the Canada Revenue Agency (CRA), CRA has been described as the leading ‘cashless’ economy in the world, followed by the United Kingdom.
As the pandemic rolls on, the accounting and financial services sector is better equipped to deal with unprecedented events leading to business disruption. And what has the pandemic has taught us about the importance of contingency planning? Although working conditions have varied, the accounting profession proved that it was well equipped to deal with such events pre-pandemic, bolstering its position in the face of the pandemic and minimizing the chances of business insolvency post-pandemic. Accountants enacted their contingency plans with amazing results for businesses around the world.