Why do companies need to develop a business continuity plan?
With COVID-19 affecting businesses for the near foreseeable future, it's essential to have an action plan in place. If your workforce isn't already in transition to a work-from-home (WFH) environment, it seems likely that it will. A work-from-home employee will likely include employees in your accounting department, which will impact your accounting and business continuity and possibly hinder critical business intelligence.
Some industries are already experiencing the impact. Lower sales mean potentially lower cash inflow. Large healthy accounts receivable balances may to not be so robust as customers look to defer payment or negotiate payment terms. It is more important than ever to keep your accounting up-to-date and accessible.
While most of our clients already run their business using cloud-based accounting apps like Xero or Quickbooks online, some do not. Now is the time to make the conversion to a cloud-based solution and remote-enable your accounting process. As states around the country put in to effect shelter-in-place orders, a business may be okay not having accounting data for a couple of weeks. However, if shelter-in-place orders are extended, those couple of weeks may be detrimental to the ability to forecast cash.
That's why it is vital to implement an action plan now.
Remote Access Now
If you're on using desktop versions of accounting software, for example, Quickbooks Desktop, then install remote access software to allow your accountant to get remote access.
Here's a list of some remote connective software:
While it's tempting to evaluate the best in breed remote access software, now is not the time. There's uncertainty as to when shelter-in-place orders will be put into place (California already has a state-wide order in effect). With remote access in place, you should be able to keep bank feeds into Quickbooks Desktop live and the day-to-day coding of transactions going.
Move Bill Payment to the Cloud
If you are still relying on your on-site accountant to generate manual checks and leave a stack of checks for you to sign, you'll need to think through how that will work in a shelter-in-place goes scenario.
You could have them take a handful of blank checks so they can print up checks from their homes? That will work since you gave them remote access.
That doesn't sound like a good idea. Even if you're okay with a stack of blank checks in someone else's home office, how are you going to sign those checks? Should they swing by to drop them off while maintaining social distancing? Maybe the checks can be dropped in the mail to you so you can sign it, put them in envelopes, and mail them out to vendors?
None of those options sound very good.
The only viable option is to move bill payment to the cloud by using an app like Bill.com . Invoices can be scanned or emailed to Bill.com, processed by an accountant, routed to you for authorization, and scheduled for payment. Bill.com pulls the funds from your checking account and generates and mails out the check.
You'll also have controls in place if Bill.com is adequately configured. An accountant won't be able to generate any checks unless you've authorized them.
Alternatively, you can use your bank's bill payment option. It's usable in a pinch, but you do give up some control if you allow your accountant to log in and schedule payments without any review or authorization from you. It's slightly better than having to take a stack of blank checks home, but not much better.
Bill.com can be configured to synchronize with Quickbooks Desktop.
Move Sales Invoicing to the Cloud
Bill.com can do double duty and be configured to send out sales invoices. This is probably not entirely necessary since you could always create a PDF of your sales invoices and email them to your customers.
Key: Act Now
There are a few other move-to-the-cloud options you can take. Still, these two areas seem to be the most pressing to keep the accounting data flowing and to provide you with critical business insights in the face of economic uncertainty ahead. Await and see approach is not advisable, given that you'll need some time to work out remote procedures even after these cloud-based tools have been implemented.