The finance team is the heartbeat of any business, especially small businesses. It is the accountant’s job to ensure this heartbeat stays consistent and stress-free. From handling all accounting tasks to managing payroll and cash flows, to providing financial insights to senior management to make informed business decisions, an accountant plays a crucial role in the growth and sustainability of a business.

Imagine what would happen if the accountant were to resign suddenly. It would spell chaos! The business would be left paralyzed, adversely affecting both short-term and possibly long-term revenue and profits. However, it’s not just a matter of monetary loss – the exit of an accountant can also give rise to problems such as data security risks. It becomes crucial for you to go into firefighting mode and hire a new accountant as soon as possible. Skilled accountants with industry-specific knowledge and experience are in high demand. So, what can you do to safeguard your business from such an eventuality? 

Initial Steps to Take When a Critical Member of the Finance Team Leaves

Here are some things that you must put into action within 72 hours of the departure of a critical member of your finance team. 

Disable Access to Critical Systems

An accountant has access to the key financial data and systems. When a member leaves suddenly, the first step is to disable their access by resetting passwords and deactivating credentials on all related platforms, including invoicing, payroll, tax, and banking systems. Make sure they are also disabled from accessing any shared drives, documents, or spreadsheets online. Check for any other platforms or locations where they might have access and disable them as well.

Map Out Financial Priorities

With the accountant gone, all financial tasks will come to a halt. At such a time, it is imperative to identify time-sensitive functions that must be completed on a priority basis. For instance, processing payroll, clearing outstanding tax or debt obligations, or completing reconciliations for essential board meetings are duties that cannot wait. Any gaps or delays in such duties can spiral out of control and lead to significant losses, penalties, or staff issues. 

Inform Stakeholders of Senior Member’s Departure 

Running a business is a team effort, and therefore, every member involved in your business must be aligned with you to manage it effectively. Inform of the sudden departure of an accountant to employees, vendors, and business associates. Also, notify board members and even your bank. Remember, such communication must be done with the intent of informing only, not creating chaos. By reassuring them that you have things under control, you can avoid the business from going into panic mode and attracting losses. 

Appoint an Interim Senior Member and Assign Duties

How do you manage things effectively? By appointing a temporary or interim accountant to handle the financial priorities till a new accountant is hired. For this, you can approach a senior member of the finance team. If you do not have such a person in your company, you can even outsource the duties to a specialized accounting firm. 

Preparing Business for the Sudden Departure of Critical Members 

While the above points are to be implemented if and when an accountant resigns suddenly, it is always better to be prepared. Instead of scrambling for control at the last minute, a financial contingency plan can help ensure economic stability and facilitate a smoother transition from one accountant to another. Here’s how to prepare your business for such a problem:

Build a Financial Contingency Plan

A business goes into panic when a critical member of the finance team leaves suddenly because nobody else can do the job. To avoid confusion, you can compile a Financial Continuity plan. 

The contingency plan should answer:

• Immediate tasks to check when the accountant leaves 
• The following person who will take charge if the critical member leaves
• Emergency contacts for tax, payroll, and audit support

Ensure only the owner and one other senior executive whom you trust have access to this plan. In a small business setup, the business owner is often the most suitable person to be the next in command, approving payments and making financial decisions. The owner should have all the passwords and approval access that the accountant needs to protect the business from a temporary financial disruption resulting from the sudden departure of a critical member.

Prepare Critical Process Documents

The contingency plan has a broad focus for the CEO. Also, prepare a standard operating procedure (SOPs) giving details of the various tasks the accountant does, and specify what kind of documentation will be needed. For instance, you can draw up a template for monthly and annual checklists for the new person to follow. You can provide notes on how to manage payroll, invoicing, and purchasing, as well as instructions on accessing necessary portals or accounting systems. This SOP will be shared with the interim accountant and the backup team to assist them in taking up new responsibilities. 

Cross-Train Employees to Work in the Absence of the Senior

An accountant is a specialist, and replacing them is not an easy task. However, as part of your contingency plan, it is essential to consider the worst-case scenario and be prepared. 

For this, you should train at least one other employee, and ideally two, to manage the time-sensitive tasks of the accountant during times of crisis. Teach them how to manage payroll, invoices, financial reporting, and other such necessary tasks. Also, train them on how to use the accounting portals and systems, while limiting their access for security reasons. 

Conduct Risk Assessments Periodically 

Instead of waiting for a crisis to strike, you can conduct a risk assessment on your finance team once or twice a year. The evaluation will determine the specific areas or points that are at risk of failing in the absence of an accountant. You should also be aware of any tools, processes, or documentation templates necessary for the finance team to function smoothly and ensure their availability. 

For key financial tasks, assign a two- or three-person cross-checking and approval system to avoid potential fraud attempts or security breaches. Ensure you review this risk assessment plan periodically and update it as the changing needs and processes of your finance team. You can also hire an external auditor to help you with risk assessment.

How an Outsourced Accountant Can Help

While the sudden exit of an accountant can create complications for your business, there are ways to handle or even avoid it. Outsourcing your accounting can ease your burden. 

An accounting firm is subject to strict laws and holds greater accountability. So, in case the accountant handling your business leaves, it is the firm’s responsibility to provide you with an immediate replacement. Moreover, you also have the option of hiring them on an hourly or contractual basis, as per your financial needs. Ultimately, outsourcing your accounting needs can prove to be both affordable and reliable for your business. 

Contact Glenn Graydon Wright LLP in Oakville to Help You with Your Accounting Needs

Talk to a professional accountant to help you set up and manage your accounting tasks. At Glenn Graydon Wright LLP, our accountants and bookkeepers offer services including tax filing, bookkeeping, payroll management, and cash flow management. To learn more about how Glenn Graydon Wright LLP can provide you with the best accounting and bookkeeping expertise, contact us at 905-845-6633 or connect with us online to schedule an initial consultation.