Businesses in all industries are bracing themselves for the oncoming recession. With 81% of American Adults anticipating a recession in 2022, company morale is impacted as inflation rates continue to skyrocket. The current annual U.S. inflation rate is 8.5%, compared to 0.7% in 2015 and 1.7% in 2013.
To survive the economic downturn, businesses often turn to internal cost-cutting measures, like letting reliable employees go. Although these kinds of strategies can keep companies afloat for the short term, they don’t account for lower profit margins and inconsistent cash flow. Moreover, the relationship between consumers and vendors can be jeopardized when product costs become exorbitant.
An Automated Solution
While there is no one-size-fits-all model for coping with inflation, automation allows businesses to optimize their workflows. Automation technologies can seamlessly shorten companies’ most tedious processes. From digitizing client onboarding to transforming the way datasets are organized, it’s crucial for businesses to invest in platforms that can increase profitability and productivity without requiring manual input.
Automating payment processing is one of companies’ most impactful ways to fight inflation. This technology has the power to automatically offer customizable payment forms, ACH and credit card processing, recurring billing options, and more. As a result, digital transformation platforms like Regpack are seeing a 25% reduction in client churn and a 30% increase in cash flows. In addition, both sides of B2B and B2C transactions can see the benefits of automated payment processing.
From the business’ perspective, automated payments create a much higher level of consistency and control.
Before these technologies existed, employees were forced to juggle the monotonous daily tasks of invoicing, billing, client communications, and pricing updates. A 2018 survey found that of more than 280 companies, 25% of employees reported spending 20 hours a week on manual data processes. This statistic incentivizes companies to explore the digital landscape and optimize efficiency. Imagine all the growth-related opportunities these same employees could be taking advantage of.
How do these platforms protect companies against inflation? First, automated payments come with predictable cash flow. Companies and consumers are no longer waiting for each other to send and receive funds. Additionally, companies can further ensure unmissed payments by using saved payment methods and offering customers the ability to sign terms of service through the same platform. Companies can scale faster when they eliminate these financial insecurities, and profit margins will increase as opposed to labor costs.
The wins of automation improve the customer experience as well. This technology keeps users paying on time and doing so on their terms. Many online payment software allows customers to pay for products on any device they wish. A reduction of paperwork helps streamline the process as well. So, no matter the time or place, consumers can make their purchases quickly and not forget about recurring bills.
So, in short: an automated payments process builds customer loyalty while optimizing companies’ cash flows in and out of economic downturns.
Data Integration Fights Inflation
Businesses cannot foresee supply chain disruptions or signs of a recession if their data is disorganized. Data integration is a key reason why digital transformations are so impactful: companies can confidently review their datasets all in one place through automation. In context to payment processes, this includes financial reports, customer purchase histories, and supply-and-demand data. Looking at a company’s operations at both macro and micro levels will lead to tremendous success through inflation. It is all about thinking holistically, and automation can help executives see the bigger picture.
But even automation has its downfalls when it comes to fighting inflation. Inflation often pressures companies to change their prices frequently—automation and client commitment to a payment plan inhibit that. But at the same time, digital transformation prepares businesses to be more competitive due to increased efficiency. So, in reality, it is vital for business leaders to customize their solutions and consider ways for tech tools like automation to lessen the load their employees bear. Even though automation narrows some payment options, it still provides consistent, precise data and minimizes manual tasks.
To survive these uncertain times, small businesses must explore the technologies at their disposal. The tides of inflation will dissipate when companies’ infrastructures evolve and utilize automation for good.
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Asaf Darash
Asaf Darash is the founder and CEO of Regpack, an online payment management platform. With extensive experience as an entrepreneur and investor, he has built three successful companies to date, each with an exit plan or that are still in operation. He specializes in product development for the web, team building, and bringing a company from a concept to profitability. His specialties include extreme programming, programming languages, JavaScript, MongoDB, system structures and new media, enabling him to build versatile products based on achievable business models. He holds a PhD in New Media from Hebrew University of Jerusalem and has served as a visiting scholar at the University of California, Berkeley.
