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THE POWER OF “WHAT IF”

By Robert Douglas, Europe Planning Director at Workday Adaptive Planning

 

Organisations across the world are currently dealing with the economic instability brought on by the fight against COVID-19. On top of being forced to adapt to these unpredictable circumstances seemingly overnight, the impact of the pandemic continues, challenging companies to course-correct in nearly real time, with no end in sight.

The key to persevering in this fast-changing world is the ability to identify disruption and proactively respond to it, which is why trying to work with a business plan developed months ago limits an organisation’s ability to be successful on both counts. The reality is that agility starts with planning. And, in these times, scenario planning gives organisations the ability to weigh trade-offs and explore the impact of different decisions.

 

Thinking ahead

The pandemic perfectly illustrates that no one can ever claim to know exactly what lies ahead. But preparing for the unexpected is key in order to respond with agility. Successful finance leaders and financial planning and analysis (FP&A) professionals can identify a list of potential scenarios the organisation might face and then map out potential outcomes. This allows them to also propose actions that can be taken to mitigate the most critical risks associated with all identified eventualities.

Running accurate scenario planning on short notice, especially in the face of uncertainty, can be challenging. While the process itself boils down to a handful steps, carrying them out efficiently requires having access to solid data and the technology necessary to run multiple, sophisticated models.

 

Assessing the impact to the top line

Preparing for any significant event or change requires planning. Many companies coming into 2020 were already assessing if the long-running economic expansion would begin to show signs of slowing. The pandemic, while sudden, accelerated the need for scenario planning at a pace that most companies had never experienced. At the onset of the pandemic, it was reported some finance teams were handling 30 times more forecasts and build-out scenarios than in a typical week*.

Because there is no historical data for a pandemic, many companies started by assessing the impacts to the top line of their business. Modelling things like new sales, business renewal activity, and any upsell opportunities for customers to create that topline start. From there, teams might consider a range of scenarios, for example looking at 50 percent, 65 percent and even 80 percent of pre-pandemic plans. This allows a view into what could happen to the balance sheet and income statement to better help businesses understand variances on the metrics that matter most to them.

Considering the current economic and health crisis, the focus is really on the “levers” that can be pulled to make trade-offs. For most companies, the biggest expense is people, which is why workforce planning has emerged as a top priority for 2020. Looking at whether to continue with hiring or freeze hiring in certain areas or regions allows teams to evaluate various outcomes. And since no company wants to cut jobs, it’s important to have a full understanding of the various levers available in order to make the right decisions that align with the longer-term business strategy. All options need to be put on the table and assessed against a range of scenarios.

 

Align and execute

While scenario planning and ‘what if’-analysis is owned by finance, it cannot be done in a finance vacuum. Leaders from across the organisation need to be involved with validating all assumptions made and make sure the right levers are identified from the start. This keeps everyone aligned, and with modern planning solutions, this can be done seamlessly using real-time dashboards with up-to-date data that executives can access around the clock.

Apart from agreeing on the current state of the organisation, finance teams and leadership need to also agree on what the best outcome for the business looks like. This will require understanding the priorities across the workforce, customer satisfaction standards, sales, product development, and more. By agreeing on the organisational priorities up front, as business strategies are revised, the scenarios the finance team needs to focus on can be identified and managed.

The speed at which the economic outlook changes also means scenario planning, like every other sort of planning, needs to be continuous. Priorities will inevitably change in the face of new developments impacting the business, and as soon as this happens it needs to be communicated to finance so that new scenarios can be created and evaluated to inform decision-making.

Once the finance team has established the scenarios with which it is working, defined the top priorities for the business, and identified the levers it is willing to pull, it becomes worthwhile to dive deeper into the data and generate sophisticated and actionable in-depth plans and reports. For some companies, this will mean digging into supply chain issues, for others it may be assessing risk by segment or proactively offering support to clients and customers.

 

Technology as the enabler

Being able to answer crucial ‘what if’ questions for the business—and do so at the pace our current climate dictates–relies on modern technologies. Without a powerful IT infrastructure that can support real-time access to performance data from across the organisation combined with modern planning tools, teams will be challenged to create the plans and reports needed to guide critical decision-making.

Innovations in FP&A technologies have already reshaped many finance teams and ushered in unprecedented business agility in recent years. By moving away from on-prem data silos to the cloud, where data can inform highly complex models on demand from anywhere around the world, businesses have ensured they have the capacity to effectively plan for a near-infinite number of scenarios.

No one knows what lies ahead, but through the power of “what if” finance teams can help organisations adapt and adjust as business conditions change and continue to do so. And while the pandemic has certainly escalated this need, the effective use of scenario planning has proven that finance teams can embrace flexibility and use it as a strategic advantage.

 

*https://blog.adaptiveplanning.com/perspective/in-uncertain-times-agility-is-the-safest-harbor-of-all/

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Business

TOUCH-FREE AUTHENTICATION FOR ALL: WHY WE NEED A SAFER PAYMENT METHOD IN THE ‘NEW NORMAL’

David Orme, SVP, Sales & Marketing, IDEX Biometrics ASA

 

Ever since March, when the World Health Organization encouraged people to not use cash, coronavirus has made touch-free shopping a necessity for all consumers. However, as economies across the world begin to reopen, we are seeing in-person shopping and payment via touch-pads return. So, with payments beginning to return to ‘normal’, the global payments industry must now consider an important question: how can we protect consumers from the pandemic and potential future health crisis’ during the transaction process?

During the pandemic, touch-free payments began to gain international traction across the world, changing behaviour during the payment process. While previously, consumers were happy to key in a PIN, or even provide a signature for a purchase, they are now familiar with more convenient and safer touch-free methods, and they’re not likely to let them go.

In Europe, high street chains have rapidly shifted to contactless payments, often refusing to accept cash. Meanwhile in the USA, levels of contactless payments have rocketed since the pandemic, after a slow initial adoption of the service – US banks only adopted contactless cards in 2019 compared to 2007 in the UK. According to Visa, overall contactless usage in the USA has grown 150% year-on-year as of May 2020.

Even mega-retailer, Walmart, has recently introduced contactless options for in-store shopping and delivery to protect its customers during the pandemic – showing there is growing demand for a touch-free and convenient way to pay across the world. This has raised awareness of touch-free payments among consumers looking to reduce contact-based interactions and time spent at the checkout during the pandemic.

 

Mobile payments are growing

Mobile payments are growing, again showing the desire for touch-free authentication among consumers. According to Forbes, the US mobile payment market – currently only sixth in the world – has increased 41% and is worth more than $98 billion.

To respond to the growth of touch-free payments among small vendors, PayPal has launched a new QR code-based payment app that allows market stall holders or businesses without a PoS machine to accept payment through a code. This means even the smallest of merchants, from small stores and farmer’s markets to craft sales, can now go cash-free and use touch-free payments for everything.

Meanwhile, China has long been using QR code-based apps, such as WeChat Pay from tech giant TenCent and AliPay from Alibaba. The apps are so widely used that street vendors display QR codes for payments and together the two fintech giants control about 90% of China’s digital payments market.

 

But card is still king

At the same time, payment cards are still consumers preferred way to pay. Of course, we only need to look to Apple and Google, who recently have launched physical payment cards despite running mobile payment apps for further proof that payment cards are far from dead.

So why aren’t cards on their way out, given the growth of mobile payments?

We know that consumers still look to payment cards for security and a sense of familiarity while shopping. According to IDEX Biometrics’ research carried out in the UK, only 3% of consumers choose to use mobile payments, while nearly two-thirds (65%) state that carrying their debit card provides a sense of security. And when it comes to touch-free payments, only biometric payment cards can provide the most secure level of validation with an easy digital experience for shoppers.

Despite the popularity of WeChat as a payment app, China’s biggest card provider China UnionPay has recognised that its customers aren’t ready to give up on physical payment cards either. China UnionPay has recently certified the first biometric fingerprint card technology in the country as they look to the use of biometric technology in cards to provide an extra layer of security, with added convenience and hygiene during a payment transaction.

 

Secure touch-free card payments

Biometric fingerprint payment cards provide end-to-end encryption – securing the user’s card and data. A fingerprint biometric card allows the user to authenticate their ID by touching their finger to the card’s sensor while holding it over the contactless card machine. Therefore the shopper only has to hold their own card over the PoS system and the entire transaction process is free of public PIN pads or checkout counters – making it no different to how consumers currently use contactless payments cards. This touch-free payment technology provides the consumer with the convenience of contactless or a mobile payment but with far greater security, as the card is personally tied to the owner.

Biometric identification is already firmly incorporated into our everyday lives. Thanks to unlocking our phones and authenticating payment apps, we are increasingly using our fingerprint to verify our identity. Now that consumers are familiar with the technology, biometric identification in payment cards will become essential to help consumers navigate the shopping and transaction process safely, speedily and securely.

As our economy gradually reopens, financial services providers must protect consumers during the transaction process. In stores, on transport systems – even in stadiums – a fingerprint biometric payment card will provide touch-free payment authentication for all.

 

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Business

THE BASICS OF BUSINESS FINANCE

When you’re starting your business, you’ve got a lot to be thinking about. You need to find affordable suppliers, market your business effectively, bring in paying customers, and perhaps even hire staff to get your fabulous idea off the ground.

Although they’re not the most exciting of these topics to think about, your business finances and how to best manage them should be at the top of your list. Get them right from day one and you can worry less about those smaller details and focus on making your business a success. Get them wrong, and you could be creating unnecessary stress and worry that could potentially harm your business.

With this in mind, here’s a useful introductory guide to business finance that can help you navigate the basics.

 

Find the right business bank account

Choosing a business bank account is a key decision that could either save or cost your business money. It will help you keep your personal and business finances separate, budget effectively, manage your accounts and complete your tax returns more easily, even if you’re just a sole trader. You may also be able to access financial support that has been specially tailored to your business needs.

However, business banks offer different services and charge different fees compared to your personal bank account. That’s why it’s worth finding out which account would be best for your business needs.

According to leading small business advisors Informi, “The high street banks (Barclays, HSBC, Lloyds, NatWest) have all upped their game in order to keep up with the digital-only offering of the so-called challenger banks (Monzo, Starling, Tide Business).”

 

Keep track of everything

Whenever your business spends money or earns money, you should make sure you’re making a note of it and keeping the information somewhere safe.

Getting organised early will simplify your bookkeeping and accounting process, form great business habits and help you stay financially in the black. Depending on your business structure, this may also be a legal requirement.

This should include, but not be limited to:

  • Incoming and outgoings
  • Invoices sent (including invoice dates, numbers and full client information)
  • Inventory details including dates purchased, stock numbers, purchase prices, dates sold, and sale prices.

 

Understand your tax obligations

Starting a brand-new business is an exciting time and the last thing you want to think about is taxes. However, you also don’t want to be hit with a large, unexpected tax bill at the end of the year. That’s why you should always be clear what your obligations will be and budget for it accordingly.

What you need to pay depends on whether you’ve registered as a sole trader or as a limited business:

Sole traders (self-employed): You’re liable to pay tax on all your income after your personal allowance is deducted. You’ll also need to pay your own national insurance contributions.

Limited companies: You’ll need to pay corporation tax and make employers’ national insurance contributions. Any employees must pay tax and national insurance on their income via a PAYE scheme. If you’re hiring freelancers, they may need to take care of their own tax.

This needn’t be confusing if you’ve kept financial records from the beginning and you’re clear on what you need to pay. For more information on UK government business taxes, visit their website.

 

Consider whether you need finance

Paying for your new equipment, premises, advertising, wages and other overheads can soon add up when you’re in the initial stages of starting your business.

If you don’t already have enough funding, you could get extra support from the government or bank. This may be in the form of a loan or grant such as the UK government StartUp loan.

However, be careful about taking on too much debt, especially during these unpredictable times of the coronavirus. Consider how much you can repay and make your decision accordingly.

 

Summary

Take care of your business finance basics and it will be much easier to start and sustain your new business during these challenging times.

Make sure that you choose the best bank for your needs, keep detailed records, understand your tax obligations and consider whether you need extra finance to help get your business off the ground.

But most of all, have fun! This is the start of an exciting new era in your life.

 

Sources
‘Choosing the best business bank account’https://informi.co.uk/business-administration/choosing-best-business-bank-account

‘6 Small Business Finance Basics You Must Understand’https://smallbiztrends.com/https://smallbiztrends.com/2016/01/small-business-finance-basics.html
‘Business finance and support’https://www.gov.uk/https://www.gov.uk/browse/business/finance-support·
‘Apply for a Start Up Loan for your business’https://www.gov.uk/https://www.gov.uk/apply-start-up-loan
‘Business tax’ – https://www.gov.uk/https://www.gov.uk/browse/business/business-tax
 ‘Finance Your Startup Business’ https://www.startupdonut.co.uk/https://www.startupdonut.co.uk/financing-a-business/start-up-funding/finance-your-start-up-business

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