Preview: 3 steps to recession-proof your business
The past year was a challenging time for businesses, with high inflation and rising costs of living contributing to a sluggish economy. 2024 looks set to bring many of the same issues, with Germany already in a double-dip recession, and other European economies struggling to achieve sustained growth.
Our new white paper — 3 steps to recession-proof your business — outlines practical steps that you can take to prepare for potential challenges in 2024.
In this article we’ll give a brief intro to the white paper and the learnings you’ll find inside.
3 steps to recession-proof your business
The CFO’s role in driving change
First let's put the role of the CFO into context. CFOs are tasked with overseeing financial processes and ensuring the overall financial health of a business. But, in recent years, they’re also playing an increasingly pivotal role in strategy, business planning, and other cross-departmental projects.
Naturally, this makes the CFO one of the most important individuals for driving organisational change related to financial discipline — something that is especially important in a weak economy. However, there are some common challenges that can make this difficult:
- Lack of visibility over spend: If your spending lacks transparency or clarity, it's impossible to accurately assess how much you're spending.
- Lack of control over spend: Without control over where and when your funds are going, you can't bring excess spending in check.
How CFOs can prepare their businesses for recession
Each business faces its own unique challenges and possesses its own unique characteristics that need to be assessed on a case-by-case basis. However, in general, the following steps can help businesses of all shapes and sizes to weather an economic downturn:
Develop a more consistent, accurate base of data
To implement more stringent controls for spending within your company, you need to have accurate financial data. Conventional payment methods and financial systems often fall short and are unable to provide the level of accuracy and granularity required to truly understand your business costs.
Businesses need to develop a base of cost data that is:
- Exhaustive and granular: Finance teams need to be able to break down spend by supplier, category, etc.
- Real-time: Spend data should be visible immediately, rather than at the end of the month.
- Linked to departments and individuals: Spend should also be attributed to specific departments, approvers and employees for accountability and reporting purposes.
- User friendly and easy to visualise: Data should be easy to manipulate and visualise to accurate insights and reporting.
Upgrade your financial systems and processes
To get the quality of data that we outlined above, you need to invest in the right tools and processes.
Gathering, categorising and reviewing large amounts of financial data is practically impossible using manual processes only. As a result, businesses need to look towards tools that can automate, or semi automate critical processes.
Smart spend management systems are designed specifically with high quality spend data in mind. Smart corporate cards allow businesses to track and control all of their spend via individual department and employee in real time.
This data is then collected, and can be displayed or fed to accounting software for reporting or insights.
Download your copy of the full white paper where we cover these topics and more in greater detail.