3 critical tips to help SMB’S survive the ongoing inflation crisis

Ryan Demaray, SMB EMEA MD at SAP Concur UK

 

The past few years have been tough for small businesses, yet the pandemic taught many companies how to be resilient. Now, businesses are better prepared to face unforeseen challenges that could potentially crop up.

This can be linked to the fact that over the last few years, a major learning for business leaders was the implementation of technology and digital tools. 77% believe that the pandemic has led to their business investing in more technology, according to SAP Concur’s Public Sector Expense Fraud report.

Despite investing in more technology, the ongoing inflation crisis continues to loom over both businesses and consumers. The cost-of-living crisis brought on by geopolitical crises has also directly caused many of these businesses to rethink their long-term financial and operational strategies. For consumers, the price of everyday commodities has skyrocketed, and wages have not matched this.

As a result, consumer spending has dropped and businesses are feeling the strain, leaving business leaders to reflect on their spending levels to stay afloat. By implementing the right digital tools, issues brought on by the inflation crisis can be solved. Here are three tips that can help SMBs stay afloat during this ongoing inflation crisis.

  1. Identify where money is being spent

As SMBs are still growing, cash is a top priority for business leaders. With cash flow and demand being threatened due to inflation and lack of consumer spending, businesses are finding it harder than ever to predict spending. To tackle this, visibility of where money is being spent by staff would be useful for reallocating funds or saving for more significant investments to keep the business moving forward.

As well as better visibility, businesses can use digital solutions to identify better suppliers or other business partners that can offer discounts or longer payment terms. These insights can then be used to negotiate more favourable terms with existing partners or perhaps even allow the business to seek new supplier partnerships.

Expense software is an excellent example of a technology tool that can give companies a clear picture of what employees spend their money on and help to keep payments under control. This is especially important as we continue to work in a hybrid workforce, which has impacted business workflows, communication and visibility.

  1. Create stability for employees

Arguably, those who will be most affected by the inflation crisis are employees who will be looking to budget personal finances as utility costs continue to rise. According to our employee experience release survey, nearly three quarters (70%) of employees in the UK are concerned about the impact of the cost-of-living increase on their personal finances.

This will increase tension between business leaders and the employees looking to make savings.

The study finds that employees are seeking a higher salary or pay rise to help ease the burden of increased inflation. While this issue being resolved is dependent on the company, another threat to employees’ finances – late reimbursements for expenses – can be managed by implementing better expense software.

With over half (56%) of employees worried about delayed reimbursements impacting their finances, employees should be working to improve expense policies and processes with automation. Having the right finance software in place will not only simplify the process of claiming expenses, but it can also help to minimise accidental fraud, allowing finance departments to track and control expense claims in real time. Effective technological detection solutions can be implemented for more accurate fraud checks, increasing accountability, boosting compliance and reducing human errors.

  1. Enable responsible business practices

Many companies are already increasing their technology budgets to tackle built-in procedures and monitor employee expenses to minimise running costs. But businesses must ensure they navigate company regulations and compliance to help business leaders gain clarity around finances and act with certainty. Understanding why certain parts of the business spend different amounts will allow business leaders to create more compliance rules on employee spending.

By ensuring that solutions are up to date, both customers and employees will have the right level of guidance and confidence. SMBs can benefit from many modern technology solutions that are scalable to fit a business regardless of size and budget. With scalability, businesses will be adequately equipped with the tools necessary to tackle inflation and the cost-of-living crisis.

Existing staff can also make the most of expense management solutions for other reasons. By replacing inefficient, paper-based processes with automated solutions that can directly connect spending information to an accounting or ERP system, businesses eliminate the need to upload and enter data manually.

This saves time for those who usually work manually, improves efficiency, and reduces the possibility of human errors. It also enables business leaders to manage reviews and approvals with ease and convenience.

Looking at the long-term benefits

Investing in technology and digital solutions will require training for employees to ensure employees are able to understand the new systems and processes. This is an expense that some businesses are reluctant to spend but at such a pivotal time, SMBs need to make sure they are looking at the long-term benefits of automation to survive and permanently reduce costs.

In this current economic climate, it can be difficult to know what measures to take to minimise potential problems. With the right attitude from leaders and employees, up-to-date automation tools and efficient processes, everyone will be able to feel less stress from the inflation crisis and focus on driving the business forward.

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