Have you heard of the looming recession?
According to the latest economic forecasts, the probability of a recession over the next 12 months increases to 47.5%, up from 30% in June, along with the growing inflation rate.
So, the question arises: is your business prepared for the recession?
As we all encountered the global pandemic and the challenges it brought to us, more businesses have become aware of the importance of investing in cloud technology to save money, time and streamline their workflows.
Technological investments are the most effective way to help your business survive in times of uncertainty and prepare for the future.
To get started, it’s helpful to first understand how the recession can impact businesses.
As inflation increases, so does the cost of everything else—including business essentials. Businesses might find it more difficult to generate their usual sales, and you’ll need to cut costs accordingly.
Businesses are less likely to invest in new products at this stage, employees may be laid off, and overheads are reduced to compensate for a decrease in profit.
Reduction in cash flow
During a global recession, vendors and customers may find it more challenging to make timely payments. Businesses may have to spend more time chasing down invoices, potentially delaying their payments to suppliers.
Recessions cause declines in sales that can spiral as the resulting decreased demand. More people are tightening their purse strings, demand for products and services can decline, especially in discretionary categories such as recreation, hospitality, and other non-essential services.
With reduced cash flow and decreased demand, enterprises often need to pivot their business and do things differently. Depending on your business, this might mean scaling back operations, holding off on major investments or reducing headcount.
As a result of the economic downturn, a company may change the way it provides products or services while also considering changing employees’ roles or duties.
Businesses can prepare for the potential economic downturn; its priority must revolve around resiliency and flexibility improvement.
One of the most effective solutions for businesses to survive, recover and prepare is to continue investing in technology.
Here’s how investing in technology can benefit your business during the recession:
Improve Internal Efficiencies
Now is the moment to focus on internal processes rather than decreasing expenses by reducing people or services.
Automation solutions free up hours of administrative work for the workforce, such as data entry, scanning and document management, enabling staff to focus on much higher-value activities.
Meanwhile, automation can help businesses improve performance by reducing errors, enhancing quality and speed, in some situations, achieving results that exceed human capabilities.
Boost Sales and Productivity
Humans are still the key to a functional and successful logistics operation.
Investing in the right technology during a recession is a smart way to retain your best people and limit turnover, which can be a good sign of a solid workplace when things pick back up.
Especially when “Working from home” has become the new norm, more businesses need flexible technology to adapt to the digital workforce and drive the business forward with better communication and engagement.
Avoid Cyber Crimes
Cloud solutions and cloud infrastructure are operational for security and business continuity.
For instance, Cloud-based systems and IoT enable more powerful automation by fueling AI applications that allow systems to become smarter and more capable with less human intervention, allowing businesses to easily monitor activity and boost digital security.
Solidify Customer Relationships
Intelligent data collection and management solutions provide a higher ROI, resulting in a more agile business during the recession.
Optimizing transactions between manufacturers and customers will become even more important in a recession, especially when multiple payment forms are involved in your daily routine.
Invoice processing and payment management become more accessible and actionable as new systems such as AP Automation come into play.
As a result, communication between manufacturers and customers will improve, allowing them to build optimal relationships within the industry.
Overall, embracing a data-driven culture for complete enterprise digital transformation is the most efficient way to adapt in the recession and future-proof your business.
Get started by looking at business process automation technology like invoice processing automation or cloud print management software, which can further enhance workflow productivity, lower total cost of ownership and help retain key business talent.