What to do if your finance manager leaves and takes logins with them?

This is not an uncommon scenario. It is not nice to assume or presume the worst outcome, but we have seen it time and time again where an employed member holds a lot of the business details and logins and, when it comes to finances, they can hold a company to ransom. Where there is an impromptu exit of a finance person/team it can leave you exposed and there are a few key things to consider.

• What do you do? Replace them internally or outsource? How quickly do you need to act? Do you need to go through the recruitment process to only go through this pain again in the future or find a trusted and experienced outsource team like FC?

• If you are on a software like Xero, QBO etc – who owns the software subscription to the account’s software? It is common that the finance manager will subscribe any online software subscriptions under their own work email and with tighter security you potentially will have to deal with 2 step authentications that may be linked to a mobile phone number which can then cause issues getting access. This is not impossible to overcome but it does add stress. If the business owner does hold the administrator login, then it is a simple case of removing users. We would recommend that you allow your external accountant to own this as they will have strong processes setup for access and removes the worry of one person in a business holding it in case anything happens.

• If you are using a desktop-based product there are additional risks to consider. If an individual leaves and takes the login for the computer it is installed on, let along the actual software itself, can you get access to the computer? There is an easy solution to this issue which is to get off that desktop software ASAP and jump into the wonderful world of automation and streamline your finance and operation systems through a cloud accounting solution like Xero!

• Does the individual have access to the bank with authority to make payments? A common thing we see is that the business owner has not logged in before online and then must go through the painful process (depending on the bank) to set up their online logins which means that all payments halt unless phone banking/in branch are options. We would always recommend the business owners to have access, and for good control, to not have finance team members access above setting up payments. We would recommend solutions like Telleroo to be setup which allows integration with Xero and puts in control over payment approvals.

• HMRC logins – again the login for the HMRC gateway asks for 2 step logins. Usually, people use a mobile phone number which means being able to submit VAT returns could be delayed if due. To overcome this, you would need to call HMRC to cancel the existing gateway to be able to set up a new account. Assuming there is no looming deadline this is not a massive issue but another headache! The solution to this is to add multiple phone numbers and ensure you have your accountant registered as your agent on all taxes.

• What if they hold a credit card and you cancel it; you may find that some important operational subscriptions could also be cancelled along with it. This requires a deep dive into monthly or annual payments to ensure your systems are not shut off leaving the company vulnerable. Products such as Cledara would be hugely beneficial for managing online subscriptions, they allow you to know the reason for the subscription in the first place in terms of who requested the account, the purpose for the business as well as the usage of the subscription and having digital cards enabling easy cancellation.

• Payroll is one of the main concerns – no matter what; the team still need to be paid and HMRC do prefer to be paid on time. Again, this is where one of the many benefits of using a cloud accounting payroll solution can help. By using a cloud system the business owner can give administration access or you can work with an external accounting team to manage your payroll for you through a cloud system. Here at FC, we can work on most platforms in the interim before we move to our preferred software Brightpay.

• Is there any documentation or notes on the status of debts on the aged receivables or is there a reason a supplier has not been paid? Apps like Chaser captures all email communications on a debt and collaboration with the team! Or using Xero’s notes allow notes to added to invoices in dispute.

• Always remember that when completing a handover every company has their own idiosyncrasies. Your business and the way you do things is probably different to the way that other companies and individuals you may bring in to replace the leaver/s are used to. It is important therefore that there are notes on process and procedure documents to follow. Ideally you need a training hub that means someone can step into the role and follow very clear guidance on what is done and why. This applies to the rest of the business not just finance. There are some great tools like Trainual that can help you do this if you have not got this currently in place. At FC we create detailed notes for the team to follow which we review regularly to ensure they are still relevant and in line with the company plans especially around growth.

Interestingly from our experience of taking on an engagement on short notice or with no handover, it does allow the opportunity to question why and how things are being done. From things including:
• Moving to a cloud software
• Moving to digital copies of paperwork (making cost and environmental sense) with Dext
• Putting in place strong cost approvals and budgets with approvalmax
• Providing handy apps for the team to capture their expenses on apps like Pleo or Xero’s own expense app to ensure VAT is claimed and business costs can be managed and controlled
• Reviewing any current management information systems to ensure it still fits with the business needs and have the important forecasts to give insight such as that provided by cloud systems like Fathom
• Integrate CRMs/Project management tools (too many to mention…)
• Review the payables process – is it ad hoc, is there FOREX costs, do you verify bank details to prevent fraud? Are you making the most of credit provided to ease cashflow?

At Farnell Clarke we have been able to support and organise businesses through difficult transitions ensuring business is as usual and helping to avoid sticky situations. If you are newly creating a finance team or thinking of employing in-house, we are also able to give sound advice and guidance to safeguard against future issues. So why not call us today to see how we can help if you are currently struggling with anything here or simply want to safeguard that it doesn’t happen to you!