Global economic instability, driven by macro events like inflation, the Russia-Ukraine conflict and the ongoing fallout from Brexit, have sparked concerns of an impending recession for businesses in the UK and around the globe
The FT’s City Network, a forum of more than 50 senior executives from finance, business and policymaking, have warned that the UK faces a damaging recession later this year, while Bloomberg’s recent MLIV Pulse survey found that over four-in-five respondents expect a recession within a year. With experts and business leaders alike expecting the worst, the immediate economic future remains a top concern for leading finance executives.
When faced with market volatility, it’s not enough to simply take austere measures- such as tightening budgets or delaying investments- until the economic landscape begins to improve. To retain competitive advantages, businesses must evaluate every aspect of their processes and identify every source of potential revenue to continue to evolve and pivot their business models.
One of the ways companies are preparing for a “survival of the fittest” stretch of economic disruption is the critical area of monetisation and the effect that their quote-to-cash process have on critical metrics, like revenue leakage and customer churn, not to mention the level of agility a company needs to pivot and address changing consumer and market demands. Companies that understand this are prioritising investments into flexible, op-ex friendly, cloud-based finance technology solutions that drive agility and operational performance.
However, it’s not simply enough to just state that companies should increase investment into these new financial technologies. The challenge occurs in deciding what technology or investment in the monetisation or quote-to-cash process will provide the most benefits. While there is no one-size-fits-all approach for every business and industry, there are several key strategies that should be considered to help your business thrive.
Embrace Digital Innovation
Companies which are still utilising error-prone manual Excel spreadsheets or outdated financial software need to eliminate and integrate outdated, legacy technologies and look to embrace modern, cloud-based alternatives. Legacy monetisation solutions face the unenviable task of constant maintenance and upgrades to existing code. In addition, these technologies often do not integrate with newer products and won’t meet the changing demands for new payment methods, both within the B2B and B2C space for your business. This ongoing upheaval and upgrading of legacy systems will prove both timely and costly, potentially hampering businesses as time, money and effort is invested elsewhere.
Moving to a cloud-based monetisation solution which is scalable, cost-effective and can be configured to meet your business and consumer demands, will ensure that your business can remain ahead of the curve and have access to the latest innovation without the need for addressing legacy issues.
Automate to Innovate
Another thing businesses can do to drive efficiency is embracing automation in finance.
The reasons for embracing billing and payment automation are simple.The technology mitigates errors which risk businesses losing customers, revenue and reputation. For example, if firms want to offer customers more pricing schemes with the hope of added customer retention, an automated system which tracks inbound usage and consumption, stores and mediates data according to contracted rating agreements and creates a unique, accurate bill quickly will be an essential feature.
Pre-empt customer churn
Finally, understanding the rate of customer churn is an essential metric in uncertain market conditions, as this allows businesses to take action to mitigate losses before they become too damaging. Implementing solutions which provide insights to identify and track customer churn probabilities, based on metrics like ageing, open balances and product usage, can help businesses preempt when and who may lose interest or stop using their service. This information can then be used to target those customers and engage with them, such as through marketing materials or offers, to demonstrate the value of a firm’s service and reduce the chances of them leaving.
Businesses everywhere are facing an uncertain short to medium term future as the economy deals with increasing challenges, supply chain issues and changing political landscapes. While your firm may instinctively want to cut back in the face of these threats, now is not the time to be rash, but to be smart. Incremental investment into financial solutions such as cloud-based platforms, automation and customer churn analysis tools, just to name a few, will help navigate the future, provide opportunities for growth and ensure a more efficient and cost-effective business, while still providing the same quality services your customers have come to expect.
About the Author
Nathan Shinn is Co-Founder and CSO at BillingPlatform. BillingPlatform is an agile, cloud-based monetization platform that automates quote-to-cash processes, with a concentration on billing. BillingPlatform’s flexible platform allows companies to monetize any offering, integrate seamlessly with any system, and create a frictionless experience that turns value into revenue. Millions of transactions, billions of dollars in revenue, and the ability to support any kind of billing model.
Featured image: ©Vasyl