In a recent EIU report, 5 key factors were identified as being the driving factors of global commerce throughout 2020 and into 2021. In the report, effective cashflow management was determined to be “highly problematic,” as the market starts its recovery and the economy attempts to stabilize. Read more to learn how flexibility, speed, and accuracy can help to safeguard your cashflow and dodge business disruption.
In a lot of ways, 2020 has seemed to me to metaphorically resemble a game of dodgeball. As a kid, I always both hated and loved playing—the adrenaline of a rubber ball careening towards you and the rush of relief as you jump aside before it collides with your body are memories embedded in everyone’s schoolyard memories. But now, the game of dodgeball we play with 2020 has higher stakes than playground bragging rights. The rubber balls have turned into things such as a global pandemic, an uncertain economy, unstable supply chains, and overall business disruption. And if your organization can’t effectively dodge those disruptions as they come hurling towards you, your business is at risk.
From my years of extensive dodgeball experience, I guess I’ve learned a few things. For instance, to win a game of dodgeball, there are some important skills you must possess. Flexibility, speed, and accuracy. And I believe these 3 skills are just what it takes to effectively “dodge” 2020’s disruptions.
Flexibility – Diving into process efficiencies
Flexibility in dodgeball gives you the advantage when you’re on the defense. If you can high-kick, split, and bend your way around an incoming ball, you can avoid getting hit and therefore remain in the game. For businesses, it’s quite similar. Though, I don’t recommend your business to be actively practicing calisthenics on a Zoom call in an effort to keep cash flowing, there are ways to make your processes more flexible and agile—therefore safeguarding business continuity.
For starters, having the right data on hand to make the best decisions for your organization is key to staying agile and keeping your business afloat. But, if your accounts payable (AP) staff is still processing paper-based invoices and your financial documents are manually handled, it’s nearly impossible to collect necessary data.
It’s becoming increasingly harder to rely on manual, paper-based processes and especially so when it comes to understanding your business cashflow and capital status. Digitizing your operations reduces the amount of manual elements in your processes, therefore reducing error rates and inefficiencies. Through means such as AP automation, you can adopt touchless invoice processing. With all your transactions, invoices, and financial documentation digitized, your data grows tenfold and therefore, you can make better-informed decisions based on data and not just the loudest voice on the Zoom call.
Basware is the number one solution for AP Automation as ranked by Gartner providing 100% spend visibility of all invoices. In the Critical Capabilities for Procure-to-Pay Suites 2019 report, Gartner set out to evaluate leading vendors’ critical capabilities so that organizations can use the information to inform their P2P solution selection. Out of 13 vendors, Basware was #1 for both Accounts Payable and Accounts Payable Automation.
Speed – Maneuver quickly through business challenges
If you’re fast, you’ll last. If that’s not a dodgeball motto then it should be. Even the lesser athletic players can win a game of dodgeball by merely being quicker than the ball. The quicker you are, the faster you can avoid getting hit. The same applies for businesses in challenging and ever-buoyant trading conditions.
To fight back against business disruption, organizations need to be be quick to get visibility of their entire spend, both upstream and downstream. The quicker (and easier) it is to get a full view of your spend, the faster you can start using that full view to make strategic decisions.
Additionally, when your payments processes are digitized, you can also accelerate the speed at which your suppliers are paid, meaning cash keeps flowing and supply chains remain robust. You can even use features such as payment plans to easily manage recurring revenue to support cash stability and quickly get suppliers and service-providers paid.
In a recent EIU report, all interviewers agreed that the current state of economic disruption will have a long-lasting, structural impact on the way in which firms manage supply chains and supplier relations. Many supply chains rely on smaller companies which could go out of business before things return to a so-called “normal.” Small and medium-sized businesses just don’t have the capital to survive for months without any sales. So, it’s not just that stocks are dwindling amid lower production, it’s that firms in the supply chain might go out of business before the current state of disruption ends. This places even greater pressure than usual on larger firms to manage their cashflow and payments effectively and quickly.
Accuracy – Zeroing in on success
When the opposing team has no more balls left to throw, you can finally take the offensive. And it’s at this time where accuracy becomes the most important skill to have. You won’t win if you can’t hit anyone. And you won’t make a hit if you’re not precise when you hurl that rubber ball towards your schoolmate’s face. (Or leg. Depending on how competitive you are.)
Similarly, accuracy is crucial when it comes to staying financially successful. When your financial processes are digitized, like mentioned earlier, you gather a ton of valuable data. Yes, it can be used to make strategic decisions, but it can also be used to build accurate financial predictions that don’t just guess what your business will look like in a week, month, or year—it actually forecasts it.
Predictive analytics is all about recognizing patterns in your data to project probability. This technology leverages historical data and trends, machine learning, statistics, and analytics to create a predictive model to help forecast future events. This 360° view of spend today, offers insights into the future enabling more strategic, data-driven decisions.
Data-driven predictive models can help your business solve long-standing problems in new ways – such as committed spend. Summarized data views and analytics contribute to better cashflow management by:
Benchmarking against top companies
Predicting and preventing late payments
Monitoring set KPIs for continuous improvement and progress
Dynamic discount options
Win the game
Flexibility, speed, and accuracy are all key skills when it comes to winning dodgeball. But they’re also vital when it comes to staying financially stable and fighting back against a disrupted economy. If you can learn to dodge the (seemingly) never-ending attacks from 2020 and those that will last into 2021 using these 3 skills, you’ll find stability, success, and even ways to thrive in the new normal.
Read more in the EIU report
“A New Era: Global Trade in 2020 and Beyond”, written by The Economist Intelligence Unit and sponsored by Basware, focuses on the key factors driving global trade and business transactions in the coming year. Learn how finance and procurement experts and executives are adapting to this disruptive time and figuring out how to thrive in the “new normal.”