Losing an employee is never easy, especially when it’s one who plays a crucial role in your accounting and financial management processes. Before you can even think about finding a replacement, a lot must be tackled internally first. From finding coverage for their responsibilities and training employees to gather the necessary information, it can be incredibly overwhelming trying to determine what needs to be done and how. We created this survival guide to help you navigate this tricky situation.
What to Resolve Before the “Last Day”
Before the employee leaves, collect their login information for all of the systems and websites used in their role, including online banking, payroll and accounting systems and sales tax online portals. Create a checklist and make sure you test all of the login credentials prior to the departing employee’s last day. Transfer system access and login information as soon as possible post-departure to ensure continued functionality.
Consider the nature and extent of the departing employee’s contact with the company’s key relationships, including customers, vendors, insurance brokers and bankers. Be proactive and reach out to provide information on a new point of contact, if you know who that will be. If not, let them know who to reach out to in the interim, if necessary.
Understand and Prioritize Critical Processes
It’s essential to understand which processes the employee was involved in and what you need to do to keep accounting functions running as usual. Start by establishing priorities. For example, payroll, accounts payable and customer billing are essential processes that should continue despite the staff reduction. Document processes, establish a timeline for milestone tasks and assign responsibilities to help minimize the risks of payroll errors, late vendor payments or unbilled customers. This activity also allows you to evaluate the effectiveness of accounting processes and provides an opportunity to make changes.
Once you have addressed the essential processes, focus on tasks associated with financial reporting, including account reconciliation, month-end close and financial statement preparation.
Monitor Correspondence and Minimize Future Departure Disruption
Best practice suggests that the email account of all former employees be monitored for 90 days post-departure. This should be formally assigned to a supervisory team member. Management should also scan the employee’s hard drive and move all files to a central location for subsequent review.
Proactively documenting your processes and cross-training your accounting and finance staff helps minimize the disruption created by an employee departure.
An employee departure could be an ideal time to evaluate alternatives to in-house staffing of your accounting function. Alternatives, such as outsourcing all or part of your accounting processes, can reduce costs associated with departing employees and provide access to highly skilled professionals and best-in-class financial management solutions. RKL’s Financial Management Solutions team can help you determine what works best for your organization. Contact your RKL advisor or use the form below to start the conversation.