Although a new prime minister has now been selected in the UK, this will bring little stability or reassurance to a business community facing a vast array of institutional and international challenges. The country therefore faces a ‘cost of doing business’ crisis, and it must act quickly to stay ahead of the challenges and keep heads above water.
Although many bigger companies are still in a profitable position and flush with cash, many smaller businesses will have to make some tough decisions about what costs to cut as bills soar. Do not make the mistake of cutting investment in new technologies, however; these are essential for securing cash flow, managing energy bills and managing supply chains.
Keeping cash flow consistent
When consumers cut spending, businesses face reduced revenue and must do the same. To break the cycle, cash flow must be as stable and secure as possible. Innovative digital products by a raft of fintech and alternative finance businesses provide several answers here. Adsum, for example, calculates the refunds businesses are due from His Majesty’s Revenue and Customs (HMRC), such as tax credits or VAT refunds, and provides them regularly and upfront for very little cost. Having these funds when needed, rather than when HMRC gets round to paying them out, will allow businesses to factor this cash into financial forecasts and help them plan for any obstacles ahead.
Late payments still plague the UK despite pandemic protection measures ending, and automated invoicing is the best way to combat this. Instead of wasting hours chasing late payers, outsource this process to a professional service or a digital tool. Furthermore, new offerings allow businesses to easily find the payment history of businesses so they can make better decisions about who their customers and clients are – and avoid the late payers giving the business community a bad name.
Managing energy bills more effectively
A recent study by the University of York predicted that two-thirds of all UK households will be trapped in fuel poverty by January 2023, and businesses face the same issue. Technology can’t make this issue disappear. However, it can help by leveraging AI, machine learning and the internet of things (IoT) to inform and improve facilities management decisions.
‘Smart buildings’, thanks to IoT, do just that – provide real-time insight into how people and staff use energy, and how this in turn impacts costs. Research predicts that IoT operations will have eliminated one gigaton of carbon emissions by 2030, often through smart building uses like this.
Improving supply chains
Supply chains have been fundamentally altered due to the many black swan events of the past few years and will never look the same again, thanks to a pandemic, the climate crisis, geopolitical tensions, conflict in Ukraine, and even a cargo ship getting stuck in the Suez Canal.
Although tech can’t transport your cargo across oceans, it can still help diversify your supply chains or move them closer to home, or cast a more critical eye over your current stock levels and merchandising plans.
These issues are international, inter-sector, and no leader in the world can provide instantaneous solutions. The situation, however, is not hopeless, and businesses can do a number of things to improve their chances of success. If and when the economic situation improves, these changes will make for a more profitable and productive business.