A word from our CFO: 5 recession-busting tips every kind of business can use today
An energy crisis, slow-paced recovery from Covid-19, supply chain issues and high inflation all point toward a challenging recession.
If people feel a sense of doom from the headlines, then it’s the same story for businesses. But unlike with Covid-19, one advantage we have now is that we can see the recession coming down the road, and because of this, we can prepare ourselves.
Many businesses will be scrutinising their operations and finding the most cost-effective solutions to their problems. This could include how they’re managing their finances, how they’re optimising their time and resources, and whether they’re enabling their employees to focus on the work that matters instead of all the time and energy-consuming tasks that could be automated. We’ve been believers in this for some time, but now there’s no denying it; cost-effective solutions are essential to any business.
We spoke to our CFO, Anita Szarek, and asked her what businesses can do – here and now – to help cut costs.
Strap in! We’ve got some recession-busting to do.
1. Create a modern expense policy (and get people to follow it)
Every company should have an expense policy. But that doesn’t mean it’ll be fit for purpose. For businesses preparing themselves for a recession, this is no longer a nice-to-have. The right policy can guarantee spending is controlled, that employees are on the same page, and that you’re not taking any unnecessary risks with your cash flow. It also means you have real-time visibility when it comes to knowing what expenses to expect and, more importantly, what your month-end end figure is going to look like.
It can be daunting knowing where to start, but the key here is keeping it concise, collaborative, relevant and accessible. We’ve even put together an Expense Policy Builder to help get you started. We’re nice like that.
If you haven’t already, start using a smart spending solution. Legacy systems will only go so far when it comes to creating a process everyone can follow without a hitch. Modern tools allow for a far greater level of control, and instead of hiding these controls behind a finance team drawbridge; they’re shared between employees.
This creates a healthy ecosystem where control of the spend and driving responsible spending lies in the hands of your CFOs, but the tools themselves lie with your employees in the shape of an autonomous solution.
2. Liberate your CFO
As we find ourselves in the midst of a recession, your CFO should be your MVP. Their financial nous will be needed to ensure your company is spending responsibly and they’ll be able to offer to-the-minute guidance on where you stand in terms of financial stability and what, if any, pivots are needed from your business.
Yet too often, we see the superpowers of CFOs spurned on sifting through receipts and sweating the small stuff when it comes to company financials. This isn’t good news for them or your business.
By moving to a smart spend solution, you can automate the nitty gritty of expense management so that no one, let alone your CFO, is wasting their time on receipts and chasing down employees’ spending details across your workplace. With your expense management in safe, automated hands, your CFO can put their attention where it’s needed; on becoming a true strategic partner to your business and ensuring that, together with your CEO, the right people are focused on the right things.
3. And don’t stop there
It’s not just your CFO that stands to benefit from automated processes either, but the rest of your workforce. A high proportion of workers’ days are taken up with manual, repetitive tasks that are not only a waste of their time but also your budget. By employing technology solutions that automate these processes, whether it’s task management, expense management, data entry, or more, you can ensure your people are remaining productive and focused on the tasks that make the best use of their time.
Trimming the fat like this can also serve you well in the future. Not only will your business grow more agile and not bogged down by time-intensive tasks, but employee satisfaction (and eventually retention) will rise from roles that enable them to make a difference. Resources will also be relocated to an area of the business where they can make a far more significant impact – especially in light of a recession.
4. Look for the rewards
Right now, businesses will want to spend money to make money. And, at Pleo, we’ve taken this quite literally with the launch of our cashback scheme. We want to help you get more value for money when it comes to managing your business expenses and our new offering means that for those companies using Pleo to automate their expense management and save buckets of time, they’ll also earn money with every purchase.
Earning up to 1% cashback on every Pleo card transaction, your team will receive automated cashback transfers to your Pleo Wallet every month. Whether it’s from a software subscription, a client lunch, train tickets, or more, Pleo is returning cash to you when it’s most needed and rewarding you for not just using our service (thank you, kindly) but getting on board with the future of expense management. As for what you’ll spend your cashback on, that’s down to you.
5. Don’t leave your workforce out of pocket
Remember that beyond your revenue, your people will be feeling the strain of any impending recession too. Inflation is outpacing salaries, and personal outgoings, including rent and energy bills will be skyrocketing for everyone.
While you may not be in a position to offer pay rises, what you can do is ensure your employees aren’t out of pocket because of business expenses. We found that 92% of employees are covering business expenses with personal money, which is less than ideal in this current economic climate.
Employers should take the opportunity to implement a smart spending solution that ensures the wait time for reimbursement is down and the expenses workflow is as streamlined as possible. This will also mean that at a time when you need your people to focus on the work that will make a difference, they’re not preoccupied with laborious processes and hunting for paper receipts.
The truth is that none of us know what the impact of the impending recession will look like. But by evolving our expense management now, we not only stand to get through it, but come out the other side with a system, and a business, built for the future.
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