Nick Peplow, Solutions Director, Liberata, explains how companies can adjust to smaller teams of back office staff in the HR and finance departments, and how to plan for the future.
Businesses have been hit hard by the pandemic, with the number of employees on the payroll in the UK plummeting by more than 828,000 since widespread closures and lockdowns began. With the exception of health and social work, ONS reports that every major UK industry, from education to IT, has seen its workforce shrink at some point over the last 18 months.
Adjusting to the reopened economy will be challenging for HR and finance departments, as many of these teams have been forced to downsize or furlough staff during the pandemic. Unplanned sicknesses, internal restructuring and the shift to remote working will continue to put pressure on back office staff and businesses. Additionally, tightening government regulations around supplier payments mean that administrative tasks, such as paying invoices can’t be put on the backburner for too long. At a time when businesses are scrambling to recover, it is essential that back office teams can focus on planning for the future, rather than solving internal administrative crises.
Normality brings backlogs
Yet, the workload of finance and HR teams has not decreased, meaning backlogs build up much faster. A business that once would have relied on a team of people to manage invoicing and payroll may now be relying on a much smaller team or even no team at all. Such backlogs can lead to an increase in errors, such as duplicate payments that can amount to significant losses if unchecked, as well as additional time spent trying to recover these funds.
Pressure on back office staff is likely to intensify once changes to the Prompt Payment Code are implemented. New regulations mean that companies will be obliged to pay 95% of their small business suppliers within 30 days or face additional interest on late payments, and the possibility of being placed ‘on stop’ by key suppliers. In the long run, this will mean backlogs are no longer just an administrative issue. They will affect other areas of the business such as stock, supply chains and cash flow.
Help during a time of need
Clearing backlogs is the first hurdle to overcome when getting a business ‘back on track’. However, due to the financial strain the pandemic has caused, it is unlikely that organisations can afford to hire more permanent finance and HR staff. Instead, businesses should consider supplementing their teams by partnering with an organisation which can provide access to expertise as and when they need it. This will help them navigate the inevitable rapid changes that will accompany the reopening of the economy.
Once backlogs are cleared, senior staff will have a clearer understanding of their organisation’s financial position and plan for the future accordingly.
Future in automation
As businesses begin to recover, they should also look to technology as a means to reduce the administrative burden. Automation for repetitive tasks, such as processing invoices or payslips, can increase the efficiency and accuracy of company records.
Crucially, automation frees up staff and resources for other tasks. The road to recovery starts with reinventing the approach to back office tasks, so staff can refocus on adapting their business to the post-pandemic environment.
Click below to share this article