Before 2020, business continuity plans were a lot like a yogurt maker you received as a wedding present: It was something you swore you needed, but it was sitting around gathering a lot of dust. It took the seismic changes from a global pandemic to bring those plans out of storage, and all too often, they were found lacking.
COVID-19 exposed the extent to which companies ranging in size from family-owned landscapers to Fortune 100 companies were unprepared for major disruptions to their familiar processes. In the immediate aftermath, Strategic Treasurer found only 1 in 5 companies had factored payment security into their planning, meaning businesses were confronted with disruptions to processes, increased fraud risks, and the very real potential of delayed payments.
Businesses don’t often go out of business because they process invoices and payments poorly, but real damage to a company’s bottom line, supplier relationships, and reputation are inevitable when payments are late and mistakes are made. Remote work and the pandemic exposed the extent to which traditional paper-heavy, manual processes were inadequate for a fast-paced modern business environment, and even with COVID-19 (hopefully) coming under control, that’s still true.
Even when we’re out of the woods on the current, stressful moment we’ve been living through over this past year, business continuity plans are not going back into a dark closet until the next crisis. Here’s how you can shift your business philosophy long-term to ensure that your accounts payable and larger finance teams don’t struggle with business continuity the next time major upheaval occurs.
Align with your CFO to ensure liquidity
Your top financial executive should never be in the dark about where AP stands, which means providing better visibility into invoices and payments to the CFO at-a-glance so he can guide the function more effectively. I can’t imagine a worse time to approach him or her with a crisis situation than when that crisis is already unfolding, so take the time this year to get your CFO wrapped into future business continuity planning so there’s true alignment when challenges arise.
Understand any changes in business and supplier payment strategy
Remember, your vendors are facing the same challenges you are, with remote employees trying to send invoices and reconcile payments. They’re likely to be receptive if you approach them with an offer for their AR organization to get paid through more convenient, digital formats as they make a wholesale shift to digital payments. Their efficiency gains are also your efficiency gains, so it’s an opportunity to realize benefits while strengthening business relationships.
Develop short-term work-arounds to tackle unforeseen circumstances
No process will be perfect, especially not when new circumstances like COVID-19 arise suddenly and force a sea change in the business. If you can’t fully automate your invoice-to-pay process immediately, at least take concrete steps to streamline by shifting to digital, setting up durable remote workflows, and having simple, effective communication structures for everyone who touches invoices and payments in your organization.
Prepare for increased requests for information
Your internal teams and the vendors you’re paying are going to want more detail, more transparency, and clearer timelines for everything you do. It’s only reasonable given that they’re dealing with their own anxieties and troubles over interruptions to their typical processes, and those interruptions can also limit the data they have to work with. Be prepared to provide that information to keep things rolling.
Expect remote work will likely be here to stay.
Many businesses have begun to return to the office and many more will do so in the months ahead. It’s fair to say that COVID-19 has made it clear that there are no guarantees that will last, especially not with remote processes running more smoothly than businesses expected in recent months. Don’t assume that you won’t need your plans and your remote processes again anytime soon, because you might be caught flat-footed once again.
If you take away one thing from this article, it should be that your business, our business, and every business in between needs to be more aggressive and more comprehensive about business continuity planning going forward. With any luck, we won’t need those plans for decades, but being safe now means not being sorry in a year or two if major disruptions to your typical processes arise.
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