An economic crisis has the power to test even the most powerful businesses
The unexpected can come at any time, and no business is bulletproof. It is possible for businesses to be most vulnerable to the unexpected in cases of unpreparedness. Companies can experience business cycles that leave them flush, flat, or flailing—all of which pose challenges for maintaining revenue and stability.
The COVID-19 pandemic had a significant impact on businesses in India, with many companies experiencing difficulties and disruptions across various sectors. Many businesses had to adapt to remote working arrangements, which presented significant challenges, including technology infrastructure, cybersecurity, and employee productivity. According to a poll by the Federation of Indian Chambers of Commerce and Industry (FICCI), almost 60% of Indian firms have experienced supply chain interruptions due to COVID-19. As a result, several firms have suffered significant financial losses, with small enterprises being particularly badly struck. The National Sample Survey Office said that the epidemic has resulted in the loss of 114 million jobs in India, with the hotel, retail, and aviation industries suffering the most.
Adopting best practices can prepare businesses for disruptions ranging from a storm knocking offices offline, and pandemics to a sales spurt taxing supply chains and staff. The practices won’t make challenges and change go away, but they can prepare businesses to effectively sail through tough times.
Broader automation of finance processes can be part of the game plan, as it can help businesses go on regardless of where the team members are working from or the challenge they’re facing. By reducing manual processes, businesses can minimise the errors that change tends to compound and gain improved information and insights about the business. With better practises and technology in place, moments of doubt and disruption can become moments of confidence and opportunity. Here are some learnings that we should learn from these VUCA times.
Set and communicate priorities
It’s important for managers and employees to know what to focus on first when change demands all hands-on deck. This is especially true if team members must pick up tasks that they don’t usually perform so the business can regain its footing. Finance and accounting can take advantage of automated processes and cross-train their employees, which can free them up for more urgent tasks. It can help businesses to reduce mistakes, improve productivity, and give staff more time to work on higher-priority activities by automating procedures like expense reporting and invoice management. According to research by Aberdeen Group, companies utilising cost management software saw a 42% decrease in the time needed to review expense reports, enabling quicker decision-making in an emergency.
Target cash flow, identify savings
Having a timely and spot-on view of money on hand and what will soon go in or out can help businesses address change and re-allocate spendings as needed. It can be beneficial to conduct “what if” exercises to identify potential areas for cost reductions and technology and process improvements in the months ahead. According to research by IDC, Businesses employing automated expenditure management systems were able to cut their travel and spending costs by up to 10%, which may be important during a crisis when finances can be tight. With an automated expense solution, data and spend control can be consolidated from multiple sources, preventing mistakes, and reducing manual tasks, allowing staff to focus on higher-priority tasks. An automated expense solution can provide real-time visibility into spending patterns, enabling businesses to make informed decisions about budget allocation and resource utilization. According to the SAP Concur survey,titled xx 83% of businesses using automated expenditure management systems were able to adjust to changes in expenses caused by the pandemic more quickly than those with manual systems.
Establish remote work policies
Creating policies and tools to make flexible work easy is the next step if companies allow flexible work. Cloud-based solutions for invoices and other finance tasks can allow everyone to access vital financial information and get suppliers paid, whether the team is working from home or a hotel room. Information that is hidden in desk drawers and spreadsheets in a physical office makes it much more difficult to operate. Employees may access financial data at any time and from any location, making it simpler to keep track of costs and make wise decisions. When there is an unanticipated change, this is especially helpful because employees might need to work remotely or travel more frequently. As per a McKinsey study, companies that automated processes before the pandemic were better able to respond to the crisis than those that did not. This emphasises the significance of utilising technology to automate procedures and decrease manual labour.
Debrief and fine-tune processes
It is essential to look at what went well and what didn’t to prepare businesses for unexpected challenges, whether it’s a disaster or sales that surpass expectations. Determine what processes didn’t work, which areas faltered with employees offline, and whether customers were kept apprised of issues. By using that information to refine operating procedures or to consider technology solutions, businesses will be able to gain visibility into finances and other sectors and still be able to run their business.
Building the resilience
Businesses deserve a well-thought-out and detailed plan, no matter how small or large they are. In cases where expert assistance is required, be sure to choose reliable tools to guide the business towards the best solution.
An economic crisis has the power to test even the most powerful businesses. Without an appropriate solution in place for managing business expenses, organizations may be forced into drastic measures merely to keep up with their competition. On the contrary, those who strategized beforehand will additionally find themselves battling for market share or expansion opportunities that arise from such circumstances.
(This article is authored by Srivatsan Santhanam, Vice President, Spend Engineering, SAP Labs India)
