A tough economic climate is the ideal time to revisit your receivables management strategy. Get ready to consolidate your resources for the financial juggernaut ahead.
You have been putting off the idea for quite some time now— and why wouldn’t you? You have the orders in hand, fulfillment is just about manageable, your accounting team is doing a decent job of reaching out to customers for payments— there is no great urgency for you to automate your order management practice. In fact, there never is an urgency to automate most end-to-end processes. The necessity is only felt when you have a cash crunch situation going on, you are unable to pinpoint any flaws in the system, and you have limited grasp of the state of your customer service.
Processing glitches are an everyday occurrence but the point is, you are failing to get a clear picture of the state of your finances. Not knowing the health of your cash reserves or how much you are due is a clear recipe for a financial crisis within your company— couple that with the looming global recession and you are bound to experience a monetary blackout!
The global financial markets have witnessed a considerable slump over the past few months, triggering fears of yet another recession. The mood among economists and policy handlers is one of measured optimism— of the 226 respondents to a survey conducted by the National Association for Business Economics (NABE), 98% predict another wave of recession after 2019.
As the respondents anticipate a significant shift in monetary policy over the coming years, it helps to know what you can do differently to maintain momentum and plan for continued growth.
We are all guilty of this— a period of sluggish growth means the onset of a series of cost-cutting measures across departments. A typical mistake that companies make as a first step towards austerity is to adopt negative spend management practices including
In fact, companies are so focused on cost-cutting that they fail to recognize which projects contribute towards healthy returns— some work processes that require considerable resources may seem expensive but could add real value— a comprehensive CRM system being a case in point. Downsizing is another costly mistake that companies undertake where businesses tend to do away with functional leaders who have the potential to come up with winning solutions. During the 2007-2008 recession, most enterprises chose to cut capital expenditure by nearly half to save on costs, effectively halting any efforts at innovation.
Do not fall into this trap— cost-cutting without a strategy will do you more harm than good. Rather than embark on a system of haphazard retrenchment, you could instead focus on revising your spend strategy. In fact, the economic downturn is a good opportunity for you to re-examine your business processes and systems to determine what aspects of work could be optimized and which ones could be absolutely done away with. Allocating resources to the right projects is especially important if businesses are to overcome the effects of recession and continue to garner good returns.
If you are selling goods on credit, the economic slowdown can be especially frustrating— buyers are slow to make payments for goods purchased, making it difficult for you to maintain credible cash flows.
Counter this by investing in an automated solution that will help keep tabs on all pending payments from your customers— a robust cash flow management solution that will ensure monitoring of receivables and expenses.
Streamlining routine processes is very helpful in crunch situations where operating costs could exceed revenues as a result of slow returns on goods sold. With order management software, you can:
Like all end-to-end process automation solutions, an order management system gives you great leverage by way of better management of cash flows, which could be invested in other lucrative projects.
Labor costs are a big concern when conducting any business in a difficult economy. Apart from ensuring processes are moving along smoothly, you also need to reskill your workforce on a regular basis. Automation will relieve you of some of the burden of engaging a credible workforce. Apart from the fact that your order chain will be automated in one go, you will also be saved of considerable labor charges to train and maintain a skilled workforce.
A critical component of this end-to-end transformation is the intelligent data capture technology embedded within the order management software. Intelligent capture does exactly as it sounds— it captures incoming data in any content format, and digitizes, parses, and routes it to the necessary system or end-user for final consumption. The best part is that manual intervention is greatly reduced from the time the data is captured and processed to its final usage or application, which means your organization is saved of considerable man hours and manpower costs.
Apart from immediately securing your finances, you will also gain insight into the current state of your cash reserves, whether the existing early payment discount options you are offering are bringing in more customers, and if you need to update inventory to prevent stock-outs.
Instead of worrying about operating and labor costs, delayed receivables, poor customer engagement, all of which will be taken care of through automation, you will now focus on the more important aspects of your business— ensuring continued productivity and growth even in a difficult economic climate.