Are you worried about a potential recession? You might not be, after all, Goldman Sachs think the risk of a recession is low. However, there are considerable risks to the US and world economy which could result in another recession.
One concern is the increasing investor interest in the chance of a recession. In addition, there are weaknesses in the Chinese economy and Brexit could result in the UK going into a recession. Historical experience has demonstrated that should another country enter recession, so will the US.
Therefore, as a business leader, you need to prepare for the potential of a financial crisis and ensure your business is ready.
Preparing Your Procurement Process
Ensuring that you have healthy profit margins is the key to surviving any uncertain future. If you don’t have good profit margins, you’ll find a small decrease in revenue can really put your business at risk. There are only two ways you can improve profit margins, increase sales or decrease costs.
Increasing sales can be more challenging and while in the long-term it is a great solution, it often requires more money to advertise. Therefore, in the short-term, it can actually lower profit margins.
In contrast, decreasing costs can be a much more rewarding and a simpler solution. All you need to do is optimize several aspects across your company to make your money go further and reduce the need to spend financial assets.
One trick to do this is to look at your procurement process and ensure that it’s optimized so you aren’t wasting resources.
Optimizing Your Procurement For A Successful Future
There are several ways you can optimize your procurement processes to ensure that you are getting the most return. The first step should be to switch to an eProcurement solution. This is by far one of the most efficient ways to get your procurement processes efficient. An eProcurement solution can automate many tasks that don’t require human input. This frees up your time, or your staff’s, to do other tasks that can add value to the business.
Research has found that eProcurement can offer returns of up to 720%. These savings aren’t just from lower cost suppliers, they are from optimizing supply requests so the costs per unit and deliveries can be reduced. You can also schedule the resupply of materials so they arrive just in time, limiting the space needed for storage of materials and lowering wastage due to being damaged while in storage.
Finally, you don’t need to pay each individual supplier separately. The right software can allow you to assess invoices and authorize their payment all at once.
Therefore, simply implementing a system like ProcurePort’s can help you save money even with your existing suppliers.
You can also save money by having an efficient eAuction for new suppliers. You might not just get better prices for your suppliers, but you can get better rates for your delivery or terms for supply, credit, etc…
Why Do You Need To Do This Now?
You need to start looking at making the changes now. If a recession happens, or just the risk of one increases, then businesses will look to tighten their belts. This can make a big difference in how successful your procurement optimization can be.
Therefore, by getting your procurement processes optimized now, you can not only save by completing the tasks more efficiently, but you can also get the best deals and contract suppliers to keep favorable terms for your business for the foreseeable future.
Are You Looking For A Great Deal Now?
The future is far from certain. There are concerns on the horizon that could threaten your business. Only by ensuring you have enough profit margin now to cope with a quick dip in sales in the future can you be certain you will survive in the long-term.
If you want to see how eProcurement can support your business now and in the future, then why not contact us. We’ll be happy to give you a demo of our software and show you how we have helped businesses of all sizes optimize their procurement processes.