Today, more and more businesses are looking for ways to combat inflation. Rising prices combined with labor shortages, supply chain demands, and more, are affecting businesses and consumers around the world.
Because of this, businesses have started taking precautions to combat inflation. They are investing in ERP systems and services that help them save money while inflation continues to wreak havoc on the economy.
Suitable businesses are investing in and optimizing their ERP systems to be more efficient in uncertain times. Here are tips and strategies to combat inflation.
7 Ways ERP Systems Can Combat Inflation
There are steps businesses can take to combat inflation and improve their financial health, including investing in ERP systems that eliminate redundant or repetitive work, improve processes, refine financial processes, enhance inventory management, and more.
These tools can help companies save money and improve their finances, which can set them up for success in the future as they combat rising prices. Read on to learn more.
1. Create a Plan
Creating a plan is the first step to ensuring your business is moving in the right direction to combat inflation. Your plan should include updating your processes, forecasting, and financial planning.
First, take a look at your processes. What processes can you update to make your business more efficient? By updating processes, you can adjust to inflation over time, which can make your business more flexible to changes that might occur. Consider ‘what-if’ scenarios that can potentially impact your business. Some of these scenarios can include wage increases, rate increases for raw materials or other goods, disruptions, delays, and more.
Understand how each scenario will affect your cash flow and what you can do to minimize the blowback. Once you understand how different scenarios can affect your business, you can take preventive measures to reduce the risk.
By planning for these impacts, you can prepare your business for any setbacks.
2. Inventory Management
Inventory management is a massive part of a business’s financial success. It is critical to track your inventory’s metrics to ensure that you have enough to fulfill customer orders. Inventory management also identifies how much stock you have to order and when. It also identifies how long it takes you to sell your inventory after you purchase it.
Inventory analysis can help you determine how much stock to keep on hand to fill demand, preventing you from spending too much on storage.
ERP systems can help improve your inventory management by helping you avoid common inventory issues like too much inventory, which results in higher overhead costs. These systems can also address too little inventory, which results in longer customer fulfillment times.
3. Hone in on Spending
In the face of inflation, your business needs to focus on spending - in the right areas. You might have to consider cutting costs and introducing more efficient processes and systems to save money.
Are there any areas of your business that are causing operational inefficiencies, like redundant processes or positions? ERP systems can eliminate redundant processes (i.e., data entry), which saves you time, money, and resources. You should also get rid of un-utilized subscriptions, ineffective marketing efforts, and other initiatives that aren't showing much ROI.
Is your spending aligning with your capabilities? Focus on what you need to keep your business running and what is helping your business grow.
4. Become Strategic on Pricing
Inflation forces businesses to reconsider everything about their finances, including prices.
There are a few things to consider when thinking about pricing. What are your competitors doing? Consider the effect of pricing on your customers’ purchasing decisions - do your customers focus on quality or cost? Is inflation affecting your costs? What's your cash flow like?
Many businesses will have to consider raising prices to cover increasing costs. Be strategic about pricing. Consider adding or removing specific features, offering different pricing models, or doing a blanket increase.
Automation is an excellent way for a business to cut costs in the face of inflation. Automation not only reduces the number of errors that can occur as a result of data entry, but it can also free up time and resources for employees to focus on other important parts of the business.
Automation can save finance teams and other departments thousands of hours of work. Think about how much time it takes to redo work caused by human error. Automation can free up all this time, which translates to significant cost savings.
Automation reduces work, which means there is less labor, meaning lower costs. This increases productivity as you tackle ways to combat inflation.
One of the best ways that businesses can combat inflation is by investing in technology and tools that can automate tasks, which is why more and more companies are turning towards ERP systems to help them save costs.
6. Cash Management
Cash management is a deciding factor in combating inflation within your business. Cash management deals with the overall cash flow of your organization. It entails keeping track of bank transactions, cash transactions, invoices, receipts, standalone payments and payments that are due.
A cash management module within an ERP system can take into account the financial transactions that occur within a given period of time. It also keeps track of the funds and offers a real-time tracking of the balance sheet of the company.
Download our FREE eBook to learn about six ways you can simplify and streamline cash management.
7. Invest in an ERP System
Skills shortages, increasing salaries, and higher prices are affecting businesses around the world, making it the perfect time to find ways to reduce costs.
ERP systems enhance business reporting, decrease inventory costs, improve business processes and supply chain management, and enhance inventory control. These systems have the tools to reduce costs and improve business operations. Companies not investing in these types of solutions are behind the curve. It’s time to reconsider your processes and invest in a tool that can help your business grow while combating inflation.
There are many suitable businesses and industries that can benefit from upgrading to ERP systems, including:
ERP systems can help businesses improve cash flow management and finances. They can automate accounting and other financial tasks and help companies track their financial transactions.
These tools can help free up staff completing data entry, allowing them to focus on other, more important business tasks. ERP systems also help manage and track spending, plan finances, budget, make financial forecasts, and report on an organization's finances.
Combat Inflation Today By Investing in an ERP System With Nolan Business Solutions
Regardless of the type of business you have, an ERP system can increase productivity, save costs, improve business operations, and much more. If your business is not using an ERP system or is using an outdated system, it is time to optimize your ERP system with Nolan Business Solutions.
Nolan Business Solutions offers optimization solutions to combat inflation by improving your financial processes, inventory solutions, accounting, and more.
One of those ERP options is NetSuite. As a NetSuite Solution Provider, our team can review your initial implementation of NetSuite and help identify areas that would benefit from optimization. Book a free consultation or demo today, and our team will be in touch to discuss how we can help with your business transformation.
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