It’s no secret that rising costs are hitting businesses hard
From increasing energy and resource costs to inflation and higher prices for customers, companies across the UK are struggling to stay afloat. As part of a wider effort to save money, here are some of the ways that AP automation can help SMBs.
The Impact of Rising Costs
Recent increases in costs are a clear source of anxiety for small and medium businesses. A survey by Simply Business found that business owners face the following market challenges:
- 70% of respondents were concerned about all-round rising costs, while 54% specifically mentioned the cost of energy
- 26% are struggling to find a marketing budget, impacting their ability to attract new business
- 18% said they’re still recovering from pandemic-related losses, meaning their cashflow is reduced
Energy prices are a major issue for businesses of all sizes. As you probably already know, there isn’t a business price cap like the one for residential energy. This means companies face sky-high bills with little control over them. After all, businesses need to use energy to stay open. The rising cost of living – combined with inflation – has drastically reduced the spending power of customers, too. It’s hit B2C companies the hardest, particularly hospitality businesses. But it also has a knock-on effect for B2B companies. More expensive bills, generally, mean less money to spend elsewhere if your main priority is keeping your own business afloat.
A poll found that 75% of companies are having to pass these higher costs onto their customers. However, a third of respondents are attempting to keep costs low by switching to new suppliers, while 28% have halted hiring new employees.
The bottom line is that there isn’t much SMBs can do about rising energy and resource costs. This means looking for alternative ways to save money and reduce spending to balance the books. But what options are there?
Saving Money as an SMB
Although specific money-saving solutions will vary by industry and business size, some tips are universal.
Invest Where It Matters
It might seem counterintuitive, but there are some areas of business operation where it doesn’t make sense to cut back. One example is marketing. After all, the purpose of marketing is to attract customers, which translates to more income. If you can’t justify a large marketing budget, consider switching to lean practices and focusing on channels that produce results.
Negotiate with Vendors
Your vendors are probably also struggling with rising costs, but this shouldn’t stop you from trying to renegotiate contracts. Part of this should involve speaking to new suppliers to get some quotes to use as evidence in your negotiations. If you’re not offered a deal that works for you, be prepared to walk away. The threat of losing business is often enough to make someone change their mind.
Stick with Remote Working
While this won’t suit everyone, keeping your employees remote can be beneficial when it comes to bills. Not having people in the office every day at least means you can turn the lights off and turn the heating down. Even a minor reduction in your daily energy bills can help.
Manage Your Waste
This isn’t a glamorous topic, but it can be a surprisingly lucrative one. If possible, estimate your company’s waste as a percentage of your operating expenses. Then, consider ways you can reduce this figure. For example, cut down (or eliminate) paper waste, and reuse what you can’t stop entirely. The same goes for office supplies; the easiest way to reduce waste is to simply stop using them in the first place.
Automate Your AP Processes
Your accounts payable processes are at the heart of your company’s finances. Switching to an automated solution, such as Quadient AP, can help with other moneysaving measures across your company.
The most obvious advantage is that automation helps you monitor your cashflow more efficiently. Invoices are generated straight away, and you can keep track of approvals and payments. Centralising your AP process also means you can better predict when payments are due out, giving you better control over your finances.
AP automation also helps you save money by eliminating time-consuming repetitive tasks associated with invoicing, such as generation, approval, and follow-ups. Doing so will allow your team to focus on tasks that matter and add value to the overall business.
Finally, there’s the advantage of eliminating paper invoicing. Consider how much you spend on paper and ink to generate invoices that are then manually entered into a computer. Cutting out these expenses could save a surprising amount.
Save Time, Cut Costs & Reduce Risk With AP Automation
If you’d like to learn more about how AP automation can help your company save money and control its cashflow, get in touch with Quadient AP for a demonstration. Let’s talk about automation.
