Withstand Inflationary Pressure with Intelligent Software

by John Case

CFOs and other financial executives can use software to manage various business functions, mitigate inflation’s impact on their organizations, and provide benefits such as the three described here.

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With inflation at a 41-year high of 8.6%, the looming threat of a recession, and ongoing supply chain challenges, businesses are staggering under the burden. According to Goldman Sachs, in April 2022, 80% of small business owners said inflation had negatively impacted their financial health over the past six months. Surviving in this economic atmosphere is becoming increasingly complex.

But the situation is not hopeless. By adopting new strategies, processes, and technologies, financial executives can flex with the times to overcome and grow through these struggles.

Technology helps businesses navigate inflationary pressures by increasing efficiency, reducing redundancy, and enabling them to accomplish more with fewer resources. Among such technologies are intelligent business management systems, which handle many operational functions, including sales, payroll and accounting, inventory and distribution, and customer relationship management.

Benefits of Intelligent Software

CFOs and other financial executives can use software to manage various business functions, mitigate inflation’s impact on their organizations, and provide benefits such as the three described below.

Data Integration for Proactive Decision-Making

Companies of any size, in any industry, can use comprehensive business management solutions to integrate their disparate applications into one system. With this central solution, decision-makers can easily view complete information from all departments (e.g., sales, accounting, finance, manufacturing, and supply chain), analyze this data, and adjust operations based on real-time insights. Armed like so, they can anticipate and quickly address inflationary burdens and market changes. Such agility helps ensure future success.

Cost Reduction

Companies that implement business management systems enjoy increased gross margins, improved sales and employee productivity, and greater profitability overall. Cloud-based business management software is less expensive upfront, and, because the software vendor is responsible for data center creation and maintenance, companies are also spared upkeep costs. These cloud-based systems are updated regularly, which means they are always on the cutting edge. As the latest technologies are automatically added, the business management solution becomes faster, more scalable, and more agile—and so does the business.

Increased Visibility

An effective business management system starts with a high-resolution view of spending. A well-designed system lets finance executives understand where and how money is spent in real time. This simplifies financial processes (e.g., orders, inventory, etc.), helps companies avoid surprise costs, and makes it easier to identify low-cost vendors and minimize freight charges. Repeatable, end-to-end, actionable visibility is essential to successfully navigating through a period of inflation. With this visibility, financial executives can be fully aware of how any decisions they make will impact company-wide profit and loss.

The Importance of Automation

Harvard Business Review has discovered that companies with more significant investments in automation have been better able to deal with the impacts of the pandemic. Their revenue has increased; demand for their products/services has been steadier; and their supply chains and workforce productivity levels have been less disrupted.

Amid today’s financial pressures, companies cannot afford to waste time on manual tasks, which are prone to human errors and redundancy. To reduce costs and spur scalability, business management systems can automate tasks such as:

  • Accounting workflows (e.g., accounts payable, accounts receivable, expense reports, etc.).
  • Searches for information and forms.
  • Document management.
  • Customer communications.
  • Stock replenishment.
  • The process of tracking and organizing receivables.
  • Sales orders.
  • Approvals.
  • Intra-departmental workflows.
  • Invoice notification emails.

When financial executives leverage automation to combat inflationary pressures, they are taking a crucial step toward unlocking employee potential. Automation gives team members the freedom to devote their time and talents to creativity and innovation, which will ultimately ensure business success.

Choosing a Business Management Solution

The process of evaluating business management systems may seem intimidating at first, but businesses can alleviate some of this concern by considering three key features.

  1. Comprehensive solutions. Look for platforms that offer solutions beyond financial management (e.g., manufacturing and distribution, sales, etc.). They will deliver a complete view of the whole company in one platform.
  2. Flexible deployment options. Deployment flexibility is crucial for two main reasons: (1) regular changes in compliance regulations to which all industries must adhere and (2) external changes. Inflationary pressure, for instance, is an external change that requires businesses to adopt flexible coping solutions. With a robust, well-designed business management system, companies can adjust as needed.
  3. Data ownership. It’s imperative to ask tough questions about data ownership early in the discovery process. Businesses often assume they retain ownership of their data when working with cloud-based software vendors—but this isn’t always true.

Companies face external pressure from many forces—including inflation, supply chain disruptions, and talent shortages. This makes it difficult for organizations to survive and thrive. But they can successfully navigate such complexity by relying on intelligent business management software. Armed with a robust solution, businesses can automate manual processes, reduce costs, and make informed, data-driven, timely decisions. As they do, they gain a competitive edge by leveraging strategies focused, not solely on fixing current issues, but on driving future achievements and success.

John Case is Chief Executive Officer at Acumatica.