New remote finance team? Automation can help

For better and worse, remote working will likely outlive the current coronavirus (COVID-19) pandemic. To succeed under these conditions, today and tomorrow, businesses must optimize technology.

Approximately 42% of the United States labor force is now home-based, according to a recent study by the Stanford Institute for Economic Policy Research (SIEPR). Many employers plan to allow or even require employees to work from home after the pandemic subsides, at least to some extent. Facebook anticipates half its employees will be home-based by 2030. Square, and Twitter are giving most or all employees the option to work from home “forever.” Shopify CEO Tobi Lütke says, “Office centricity is over.”

This tectonic shift in work policies will undoubtedly have a wide range of implications, some positive, some not. From an operations standpoint, a remote workforce is especially challenging for companies still reliant on paper and in-house computer systems: Work can’t be done if employees need to be on site to accomplish it yet. Collaboration, communication, and visibility suffer.

Fortunately, cloud-based technology fosters collaboration, communication, and visibility among remote employees. It can be particularly helpful for finance teams dealing with confidential accounting, invoicing, and tax information. 

Companies that had already transitioned to the cloud experienced the fewest disruptions as a result of the pandemic. According to Jon Raphael of Deloitte & Touche, the company’s 11,000+/- audit and assurance professionals were able to seamlessly transition to remote work when COVID-19 hit “largely due to more than a decade of investments in our organization’s digital transformation.”

His experience is supported by a recent survey of finance professionals that examines how COVID-19 is impacting businesses and how finance teams are responding. Close to half of respondents said finance automation technology such as point-of-sale systems, subscription billing software, and tax compliance software was helping to mitigate the impact of the pandemic.

Unlike in-house computer systems, cloud computing provides a “virtual workspace” that’s accessible from anyplace in the world with internet connectivity, thus facilitating collaboration. Many survey respondents noted that automated or cloud technology has been especially helpful with billing and invoicing, collection and payments, and forecasting and metrics reporting.

Storing documents securely in the cloud puts them at the fingertips of those who need them. As numerous companies discovered when the pandemic shut down offices, paper documents located at a closed office can’t be accessed by employees working at home. The easier it is for finance teams to access financial data, the more quickly they can evaluate it and make decisions and recommendations.

With in-person shopping still risky in many parts of the country because of the pandemic, retailers are relying on the internet to connect with customers. As a result, ecommerce is experiencing unprecedented growth: Total U.S. online sales in June 2020 were 76.2% higher than in June 2019. Buy online pick up in store transactions have also exploded since the pandemic, up by 130% year-over-year in June.

Merchants already using sales tax calculation and remittance software were well positioned to expand into new sales channels when COVID-19 hit, or to cope with a sudden surge in sales. Automated sales tax solutions decrease the tax complexity that often results from growth.

Even tax authorities are discovering the benefits of using cloud-based technology and tax automation software. Long reliant on in-house computer systems and paper documents, tax authorities encountered firsthand the limitations of their operating systems when their employees went remote. They must adapt, says Scott Peterson, vice president of U.S. tax policy at Avalara, or “taxing authorities will ultimately be constrained by their 20th century technology infrastructure.”

Already, 25 states work with certified service providers (CSPs) of tax automation software, which enables them to see transaction data more quickly and scale enforcement and collection efforts. This is a step toward greater automation.

Overall, cloud computing solutions are generally more flexible, mobile, and secure than on-site systems. They foster collaboration and communication across all teams, including finance teams, and ensure vital business and tax information isn’t lost during natural disasters such as fires, floods, or pandemics. And with the future still full of uncertainty, automating tax compliance can provide some much-needed peace of mind.