In this episode of the NextWave Private Equity Podcast, Karim Anani, Financial Accounting and Advisory Partner, and Lukas Hoebarth, Strategy & Operations Partner, join Winna Brown to discuss how to manage a remote close in today’s volatile financial and regulatory environment.
While there has been a growing trend towards virtual close for several years, the need for this capability has not only been accelerated but thrust into an incredibly volatile environment. Unforeseen complexity due to macroeconomic uncertainty, regulatory change, remote ways of working, incomplete information, workforce uncertainty and cybersecurity risks threaten vital systems of control that must now pivot to cover the risk mitigation they were designed to provide.
Private Equity CFOs and finance teams are instrumental in connecting the dots throughout the organization and will play a pivotal role as the business partner to the CEO. Analysis of short-term liquidity forecasts, tax implications and business plans will impact investment decisions and expose resource constraints across the private equity portfolio in the weeks and months to come.
In order for CFOs to cultivate successful remote close outcomes, they must focus on:
- Communication: holding regular meetings and establish expectations for communication
- Collaboration: establish and maintain healthy ways of remote working
- Preparation: organize a PMO to map the close calendar, identify exposure and predict/solve for different scenarios
- Motivation: keeping spirits high and nurture positivity
Learning outcomes
Five complexities will drive additional focus on the upcoming reporting cycle:
- Delays in the close process due to remote ways of working, personal distraction and impact of available (or unavailable) technology
- Different/additional analysis will be required to “close the books”
- Incomplete information from upstream operational activities and suppliers
- Sensitivity of data in a remote working environment brings cybersecurity and potential vulnerabilities into question
- The ability to ensure the controls environment is sufficient to ensure accuracy for stakeholder signoff
For your convenience, full text transcript of this podcast is also available. Read the transcript
Podcast
Episode 07
Duration 29m 00s
In this series
series overviewHow to navigate a remote close during COVID-19
Episode 07
Presenters
Why the CFO is becoming private equity’s quarterback
Episode 06
Presenters
EY Americas Financial Services Organization Private Equity Leader
What 2020 and beyond looks like for global private equity
Episode 05
Presenters
EY Global Private Equity Leader
Why private equity can endure the next economic downturn
Episode 04
Presenters
EY Global Reshaping Results, Turnaround and Restructuring Strategy and Transactions Private Equity Leader
How private equity-backed companies can prepare for IPO
Episode 03
Presenters
EY Americas IPO and Financial Accounting Advisory Services Capital Markets Leader