Despite ongoing economic volatility, there’s a wave of optimism surging through British firms at present. Nearly half of small businesses are feeling more positive about the future, while recent research by American Express shows that 88% of finance leaders in larger businesses in the UK are feeling confident about the year ahead.
In response to the challenges of recent years, many companies are leaner, more agile and more efficient than before, with leaders now starting to turn their attention from survival to growth.
Key to sustainable business growth is the ability to remain agile and responsive to change. Here are three ways to become more nimble and resilient in 2023.
#1 Improving Cash Flow Management
Tracking your business incomings and outgoings is crucial for ensuring there’s always enough money available to pay bills on time, reinvest for growth, and save. But forward-looking business leaders are increasingly prioritising better cash flow planning and forecasting, to improve access to working capital and provide more accurate data for decision-making.
Our research reveals that as many as 85% of UK finance leaders now consider accurate cash flow forecasting as crucial for business success. And about a third are revising forecasts as often as every month. The data generated allows decision-makers to effectively plan ahead, by identifying periods when cash is tight and times when the business is generating a surplus that could be reinvested for growth.
Regular revisions, alongside technologies that improve accuracy, mean cash flow projections are becoming more accurate. For example, AI-backed software can provide real-time visibility on financial performance. It can automate transactions, invoices, and invoice reminders, to prevent late payments. It can automate reporting and even flag errors and potential fraud.
Managing cash flow more effectively gives you greater transparency on how much working capital you have available - and when. It also enables you to spot constraints on cash flow, such as late invoices, unnecessary expenses or money held in surplus stock.
The American Express® VPayment solution can help your cash flow forecasts with its automated spend analysis feature. Vpayment streamlines supplier payment and reconciliation to give you greater control over your company spending, consolidating invoices into one monthly payment and providing a paperless VAT processing¹.
#2 AI and Automation Revolutionising Operations
The rapid emergence of ChatGPT has highlighted how AI-backed tools that boost productivity and spur innovation are now more readily accessible to companies of all sizes, across all sectors.
Innovative technologies that automate and assist manual, time-consuming tasks are crucial for remaining agile, by releasing employees from low-value, mundane work to higher-value, growth stimulating activities. Through its ability to rapidly ingest, process and analyse reams of data, AI and automation can transform business operations.
In finance, machine learning is supporting a shift away from spreadsheets, with algorithms that can automate calculations and reporting. American Express Buyer Initiated Payments automates the scheduling of supplier payments and can integrate seamlessly with your organisation’s enterprise resource planning (ERP) software. It enables you to choose the time and amount of payments, improving cash flow predictability².
Or, take retail, where the industry has embraced AI and automation to streamline business operations. AI-powered algorithms optimise inventory management systems and personalise customer experiences, while automation improves supply chain efficiency, leading to enhanced productivity and competitive advantage.
From smarter payments to slicker customer service, personalisation and predictive analytics, AI and automation allow companies to make better decisions, find quicker resolutions, lower costs and minimise errors.
#3 Smarter Supplier Payments
Convoluted supply chains can significantly constrict growth. Purchasing lower volumes from multiple suppliers reduces the benefits that can be realised through economies of scale, giving you little wiggle room to negotiate better prices. This makes your business more vulnerable to price hikes, while also ramping up time spent on administration.
Rising costs from suppliers are a concern for 41% of UK businesses [1], leading to price hikes. Consider trimming your supply chain to focus on one or two reliable suppliers that are wellpositioned to minimise the extent to which rising costs impact their prices. In turn, this will give you more time not only to focus on your core business but also to build stronger relationships with suppliers.
A key part of strengthening supplier relationships is through smarter payments. For example, automated transactions ensure suppliers are paid on time and your business avoids late payment fees. Or strategic payment solutions, like dynamic discounting, and flexible and next-day payments, that secure better rates for you while motivating suppliers to deliver on time.
In fostering closer relationships with fewer suppliers, you will have more room to negotiate payment terms, for example, to sync payment cycles with cash flow, so that payments are made at the best time for your business. The need for oversight will be reduced and errors are less likely to be made.
American Express Buyer Initiated Payments can streamline and schedule payments, reducing errors and providing predictability to your payments that can help strengthen your supplier relationships.
Managing cash flow, utilising new technologies and streamlining your supplier payments process, increases your business’ ability to make quick, accurate and data-led decisions for growth while reducing time and costs. And if anything has been learnt from the events of the past few years, the need to remain agile is crucial for sustaining a strong growth trajectory, ensuring your business is well equipped to adapt when it needs to.
Find efficient ways to consolidate supplier payments and keep your business moving with the American Express® Corporate Payment Solutions.
1. Paper invoices are still needed for VAT reclaim unless the Supplier is enabled to provide tax-compliant line item detail and VAT information.
2. The number of days by which your DPO is extended will vary depending on: (i) when during your American Express Card billing cycle you charge a transaction to a supplier; (ii) the date the transaction is posted to your account; and (iii) the date you pay the amount due on your American Express billing statement. DSO reduction varies depending on the agreed terms upon which your customer makes a payment using BIP.
Sources:
[1] Business insights and impact on the UK economy: 26 January 2023, Office for National Statistics
