Video: How Our Current Economy is Impacting the Accounting Function

In this video, Partners Roderick Carmody and Shawn Degnan discuss the impact on the accounting function in these unprecedented times.

Got 5 minutes? Emerge Stronger: Executive Insights for Uncertain Times is a weekly video series where we share perspectives on what we’re hearing from clients and the market about what companies are doing to navigate these challenging times and plan ahead for success.

Watch here, or continue for the full transcript.


RODERICK CARMODY: Hi, I'm Roderick Carmody and today's topic is the impact on the accounting function in these unprecedented times.

Today, I'm joined by Shawn Degnan, Accounting Advisory leader here at CrossCountry Consulting. Shawn, thanks for joining me and a welcome aboard to CrossCountry.

SHAWN DEGNAN: Thanks, Rodrick. It's great to be here and it's great to be aboard.

RODERICK CARMODY: Shawn, to get us started, could you tell us a little bit about the types of services CrossCountry's Accounting Advisory team has provided to clients in today's uncertain economy?

SHAWN DEGNAN: Companies are handling many of the same things they have in years past, but there are three areas where we're seeing an uptick: technical accounting, MNA and closing the books.

From a technical accounting perspective, our accounts are busier than ever helping companies with complex accounting matters. Many of these matters are the same as what we've seen before in revenue recognition, financial instruments and consolidations. However, there are some areas that have come into play in these uncertain times, such as impairment, going concern, and gap accounting for the CARES Act such as the PPP program. These areas are new, and it will require a little more focus for companies as they look to close their books.

From an MNA perspective, public and private companies are targeting acquisitions. They're engaging in diligence and they're ensuring their systems are scalable to ensure proper integration. We're also seeing an uptick in divestiture. Companies are looking to divest non-core assets, which has kept us busy with carve-outs and prep for sale activities.

And then finally, everyone still has to close the books. Companies still need to close their books on time. In our current workplace, that should be challenging. The tide has gone out, as they say, and manually intensive processes have been exposed, pointing to the need for further automation.

RODERICK CARMODY: How has the pandemic impacted accounting teams themselves? It must be pretty challenging to have everyone working remotely.

SHAWN DEGNAN: Well, it's been challenging for some. Some companies embraced the work from home mentality long ago. So, our current situation hasn’t really impacted them significantly.

However, for most companies we're seeing the same consistent challenges around things like communication, collaboration, and technology. When questions or needs arise, you can't just walk to the cube next to you. You have to look at calendars for free time and schedule a meeting. Teams that have had communication challenges in the past have seen those challenges exacerbated.

Additionally, collaboration between departments can be challenging if not properly managed. Interaction between accounting, reporting, tax valuation and FP&A requires careful project management to ensure that everyone stays on schedule and nothing is missed.

RODERICK CARMODY: So, Shawn, from your perspective, have there been any positives coming out of the work from home environment for CFOs?

SHAWN DEGNAN: Absolutely. People are being more efficient with their time. For many people, workplace distractions are limited at home and people simply get more done in less time. Other companies are realizing the benefit of their investments in technology. Cloud-based tools have become must haves in today's environment. Something as simple as a cloud-based reporting tool is helpful to avoid common pitfalls associated with just simply having Word or Excel documents in share files.

RODERICK CARMODY: So, Shawn, last question. Are you seeing companies take advantage of these trying times to become stronger? And if so, what are CFOs doing?

SHAWN DEGNAN: Absolutely. If you look at the downturn that happened 10 years ago, many companies emerged stronger by investing in undervalued assets and automation. We're seeing many of the same trends today. Building efficient processes for automation, outsourcing of processes, and looking at RPA are just some examples of the way companies are looking to emerge stronger from our current economic challenges.

RODERICK CARMODY: Well, thanks Shawn. Really appreciate the insights. I really appreciate you joining me today. And thanks to everybody for tuning in.

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