This article was first published on Customer Think.
Economic indicators indicate a strong likelihood of a recession. Although it likely won’t last long, businesses should be ready for a more severe economic downturn and make amends to recession-proof their businesses. Technology frequently puts a corporation in a much better position to react to the shifting market dynamics.
Experts may disagree on whether a worldwide recession is imminent, but the likelihood is growing.
There are virtually always symptoms of a recession. One particularly vulnerable region is Europe. Energy scarcities and economic sanctions related to external conflicts pose a threat to raising inflation on the continent and raise the possibility of a recession in the entire Eurozone.
The United States is moving in the same dire direction. A rate of increase in consumer prices has yet to be observed in the last 40 years. Although the job market is robust, signs of a recession such as high inflation, supply chain disruptions, and interest rate increases have not helped to allay fears of an economic downturn.
The two consecutive quarters of negative GDP growth increase the level of uncertainty, and many analysts see this as the definition of a recession. However, for the slowdown to be considered legitimate, it must be “substantial” and “continuous,” according to the National Bureau of Economic Research (NBER).
Businesses learned from the 2008 recession that no one is ever too big to fail. Simply observe the automobile sector. Manufacturers who had been in business for decades, if not over a century, were in danger of going out of business.
Numerous financial institutions, most notably Lehman Brothers, also ran into difficulties. The financial services company, established in 1847, filed for Chapter 11 bankruptcy due to the subprime mortgage crisis.
In other words, even the biggest firms need help to foresee the next major disruption. Predictability has partially lost some of its meaning as the market repeatedly ventures into what looks to be uncharted ground. Whether they face the threat of a worldwide pandemic or a recession, firms must be ready and find workable solutions to boost productivity, expand flexibility, and manage cost restrictions. Today, technology is one of the more useful methods.
Technology opens the door for strengthening operations to weather future economic recessions and scaling efficiently for the future. Making a business smarter is, well, the smart thing to do.
It all starts with building the right tech stack, which directly leans on improving efficiency, increasing agility, and managing cost controls. Even during non-recession times, investing in a solution that doesn’t cover those bases makes little sense.
One of the many advantages of automating accounts payable is that it reduces the need for staff. Simply put, you don’t need as many employees with automation. You may turn the finance department into a lean operation, prioritizing activities that add value. Additionally, you significantly lower the likelihood of human error, enhancing your data’s accuracy while saving you time and money. You can make better choices when faced with uncertainty since you are fully aware of your company’s financial situation.
Your company’s financial operations play a major role in preparing for an economic downturn, which is why fintech is so important. There is a limit to how much outsourcing and downsizing you can implement before things get out of control. To mitigate the danger of a recession, good integration will be crucial as you evaluate your technology options and make your investment. Here are just a few examples of how automation might be beneficial:
Although it should go without saying, automation frees workers from numerous manual tasks.
Manual, repetitive tasks take up to 84% of a financial team’s work. Your team may concentrate on cost-cutting opportunities and bargain new payment terms with vendors and suppliers because technology is bearing the bulk of the load. Improved rates and terms of payment can significantly improve cash flow. Additionally, automation handles many of the tasks associated with billing, which may be very helpful when the economy is unpredictable.
Thanks to automation, vendors and suppliers might choose to participate in early payment discount schemes.
Although it may be tempting to delay payments (a strategy many businesses use as the first indication of a future economic downturn), it is simply not a wise use of money. With the correct automation system, payments will arrive on time and early if necessary. This enables your vendors to benefit from payment plans and early payment incentives like NetNow early payment opportunities.
An excellent solution will give you a clear picture of your financial situation and enable you to make real-time decisions based on current information. You know, areas where operations could reduce expenses more wisely and effectively employ their resources. You no longer waste time or money on activities that do not advance your company’s development. Once more, you’re able to work efficiently.
Security and business continuity are operational with cloud solutions and infrastructure.
For instance, cloud-based systems and the Internet of Things (IoT) drive AI applications that make systems smarter and more capable with less human intervention, enabling organizations to monitor activities quickly and improve digital security. This allows more sophisticated automation.
Intelligent data gathering and management systems provide a greater ROI, which makes a business more adaptable during a downturn.
Optimizing customer-supplier interactions will be even more crucial in a downturn, especially if you regularly use several payment methods.
As new solutions, like AP Automation, are used, payment administration and invoice processing become more accessible and practicable.
As a result, there will be better communication between producers and consumers, enabling them to create the best business connections possible.
No-code and low-code platforms will play a vital part in managing the 2023 recession and can aid firms in overcoming its obstacles. These platforms allow companies to develop unique applications and automate procedures without having a deep understanding of coding.
Businesses frequently have difficulties during a recession, including decreased demand, restricted access to funding, and heightened competition. Platforms with no-code and low-code capabilities can support organizations in various ways to address these issues.
The first benefit is that no-code and low-code platforms make it simple and quick for organizations to develop customized apps that automate procedures and lessen the need for manual work. In a recession, when every dollar counts, this might help businesses cut expenses and boost productivity.
No-code and low-code platforms can assist companies in developing unique solutions that set them apart from rivals. In a downturn, businesses must distinguish themselves from the competition for clients. Businesses can acquire a competitive advantage and improve their chances of success by developing specialized solutions that address the unique needs of their clients.
No-code and low-code platforms let companies make quick adjustments and respond to shifting market conditions. Businesses must be adaptable and receptive to market developments during a recession. Businesses may swiftly develop customized solutions using no-code and low-code platforms, enabling them to adjust to shifting market conditions and gain an advantage over rivals.
No code can assist companies in reaching new markets and growing their clientele. Businesses must discover strategies to grow and expand during a recession. Businesses may rapidly construct customized solutions using no-code and low-code platforms, allowing them to expand into new markets and attract new clients.
In conclusion, adopting a data-driven culture for full enterprise digital transformation is the most effective method to adjust in the downturn and future-proof your company.
Start by looking at business processes automation technology, such as cloud print management software or automated invoice processing, which can increase workflow productivity, reduce the total cost of ownership, and aid in retaining critical employees.
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