If the global pandemic taught us anything it’s that remote work is here to stay. Seemingly overnight, companies were forced to send their employees home this spring with laptops and internet connections—and it worked. And many of them are planning to stay put. A recent study by PwC found that 55% of employers expect their office employees to work from home at least once a week, while 72% of office workers said they would like to work remotely at least two days a week in the post-pandemic environment.
But as compelling as it is for productivity and work-life balance, remote work also opens the door for accounting missteps, including the loss of internal controls—those procedures put in place to help ensure your company’s finances are properly managed. Here’s how to adapt these important tools, rules and procedures to ensure the integrity of your financial information and prevent fraud.
Whether your company has performed a risk assessment or not, now is definitely the time to do one. Assemble leadership and anyone involved in your accounting processes to assess current internal controls and how they need to be adapted to a remote work environment. Good conversation starters include, “What could go wrong?” and “What are our weaknesses?” Obvious answers include check signing, embezzlement and separation of duties. Document any changes made to your internal controls.
To maintain internal controls in a remote work environment, you may need to reassign duties among your staff. For example, cash payments should not be going to the same person who is responsible for reconciling those payments. If checks are being printed remotely, is the site secure? This duty may need to be transferred to someone at the leadership level. Be thoughtful in your communication around staffing changes—don’t yank responsibility without first communicating why the change is necessary.
Embrace the e-signature:
If you’re operating with a fragmented workforce, all of a sudden there are complications around check printing, which require special printing equipment and ink, and check signing—how does the person who cuts the check easily get someone else to sign the check? This isn’t so much a new internal control, but a tweak to an existing one. Utilizing e-signatures facilitates this separation of duty in a remote work environment.
Lean on technology:
What’s more likely? A rogue employee cooking the books in person or online? The answer might surprise you. The most sophisticated cloud-based accounting tools available today can help ward off fraud and embezzlement by maintaining audit trails, keeping logs of individual logins and sending alerts when changes are made. Also consider how workplace collaboration apps such as Slack or Microsoft Teams can enhance your internal controls.
Make sure the employees with access to the financial systems know how to access those safely. Consider equipping their home offices with landline ethernet connections to protect against their WiFi network being compromised. Also create or revise policies around logging out of systems and keeping financial documents, including checks, secure.
Dial up communication:
In a remote work environment, regular communication with employees is key to keeping morale and productivity high. Live conversations, in a phone call or video conference, also can help you observe unusual behaviors. Requiring videos to be turned on during team and one-on-one meetings helps employees stay connected.
Need help adapting your internal controls to new workplace norms? XMI’s experienced accounting team can help assess your needs and assist in implementing safeguards. Get in touch today at 615-248-9255 or email@example.com.