No business is truly immune to an international crisis. The economic impacts of recent events are sweeping — impacting virtually every industry and functional business unit. For finance and legal teams, however, even as uncertainty reigns, mission-critical business functions must press forward.
As annual plans finalized in January are thrown out and priorities shift in response to historic economic disruptions, finance organizations must continue to monitor cash flow, assess federal loan options and provide strategic operational guidance business-wide. In terms of managing these essential responsibilities, the Ironclad Finance team has recognized the key benefits our platform provides, even as the fundamental ways in which our teams work pivot in response to a worldwide crisis.
From Forecasting to Cash Flow
So, how does contracting technology actually benefit a finance team? We often refer to Legal as the hub of a business wheel connecting all teams through the shared language of contracts. From the finance perspective, cash doesn’t come into a business and longer-term, large purchases can’t be made without a contract. With this in mind, Finance is as much a contracts team as Legal. And at Ironclad, all teams — including Sales, Marketing and, yes, Finance — operate in our Ironclad platform, a key system of record.
Ironclad gives my team unprecedented visibility into any contract’s financial impact on our business. At any point, as Finance Lead, I can quickly identify a workflow in Ironclad, be it a sales deal or a vendor agreement, assess its short- and long-term implications and respond specifically.
Here’s how Ironclad facilitates both send- (cash in) and receive-side (cash out) contracts and their influence on core financial responsibilities:
Visibility into and control of all cash-in and cash-out of the business
Tailored to Dispersed Teams
Like many other businesses, Ironclad has shifted to a remote-first structure in response to shelter-in-place mandates. In this new normal, our contracting technology continues to support our finance team, providing granular insights into key vendor contracts as they’re being negotiated. What’s more, as an approver, I have full visibility into the contracts as they’re negotiated, allowing real-time budgeting checks across the business. At any moment, I have the most upstream picture of corporate spend possible, even before a contract translates into a purchase order.
Vendor agreements are just one example of highly manual contracts, requiring a dedicated accounts payable team that receives invoices from business users across an organization. This can easily become a scavenger hunt for Finance — attempting to track down who spent how much money and why. This is a serious enough issue when everyone is in one office, but when all your team members go fully remote it can be flat-out catastrophic.
This model simply isn’t sustainable, and it exposes businesses to risk. And frankly, a lean finance team’s time should be spent on building scalable processes, not on manual paperwork. With Ironclad, financial integrity is baked in — ensuring every outgoing bill has a contract and performance obligation.
Without Ironclad, maintaining high financial visibility, accuracy and speed is impossible, in my view.
Coping with Business Complexity
A key point for finance teams is that we are not only responsible for guiding the shifts our companies take in response to global crises, but we also have to respond to vendors and third parties as they pivot. In light of current events, many vendors have begun requesting immediate payment, which isn’t that uncommon in times of economic uncertainty.
In a paper-first or fragmented contracting system, this situation requires hours, if not days, of manual digging to find and establish sources of truth for every vendor requesting payment. Not only is this a questionable use of company resources, but it can also put company cash flow in a precarious position.
Using Ironclad’s Dynamic Repository, I have a single source of truth for every financial contract across our company. And this contract catalog is searchable by unique payment terms, giving me the most accurate picture of whom we need to pay and when.
Gaining this insight into our payment obligations — in minutes, not days — gives me the perspective I need to fulfill my core responsibilities of managing cash flow, minimizing business risk and directing finance operations. Even as we adapt to and weather shifting business and market conditions.
Virtual Lessons in Finance in the Wake of COVID-19
For a company to not only survive but thrive during this atmosphere of uncertainty and macroeconomic shift, it needs strong, immediate visibility into its contractual and cash obligations, no matter the logistical challenge. During this crisis, I’ve leaned on our digital contracting platform to help the team function at its best, even as we work and collaborate remotely. I can’t imagine managing the transition — and business — without it.
Ironclad is not a law firm, and this post does not constitute or contain legal advice. To evaluate the accuracy, sufficiency, or reliability of the ideas and guidance reflected here, or the applicability of these materials to your business, you should consult with a licensed attorney. Use of and access to any of the resources contained within Ironclad’s site do not create an attorney-client relationship between the user and Ironclad.