Posted on 1 March, 2019 | 3 mins
With even large retailers struggling to stay afloat, the question posed by Adam Clarke—Marketing Manager at Expend—is whether technology could be the answer to controlling costs in your business.
The news has been littered sad stories of household retail names over the past 12 months. The Toys ‘R’ Us, House of Frazer, Mothercare and many more have either gone out of business entirely, gone into administration and packaged up and sold, or drastically restructured in the hope of staying solvent and relevant.
There’s no denying that the retail sector is under unprecedented levels of pressure, particularly on the high street—with an average of 16 stores closing every day in 2017. It’s not all doom and gloom, though. There are still success stories and ways that retail businesses can make themselves more profitable.
There are many things the retail sector can control and many others it can’t or can’t affect quickly enough. Foreign exchange rates, government policy, tax (in its various forms) and rent are a few examples.
Focussing on what can be changed and improved is arguably most important.
Controlling retail costs (the smart way)
On the financial side, managing cash flow, increasing purchasing efficiency and gaining a real-time view of company spending are all areas that new technology can help retail businesses, large and small, make important changes.
Alongside financial efficiencies, there’s also the operational benefits that can come with it, like drastically reducing needless admin, so employees and management can focus on what they are experts in.
Managing cash flow in the here and now is just as important—if not more so—as predicting future requirements, so businesses can make key business decisions faster and with much more confidence.
Increasing purchasing efficiency is a complex area, and what can be done varies depending on a huge number of factors.
On the manufacturing side, quite how Nissan produces over 500,000 cars a year in the UK without holding more than a couple of hours’ worth of parts still boggles the mind. But it’s proof that with the proper processes in place and a real-time view of what’s popular, not only in your store but also on social media, businesses can react faster to trends and amplify them.
Solely focussing on the payment side, huge cost savings can be made by using technology that allows cross-border payments at little or no cost. At the same time, expense management tools like Expend not only offer global payments with zero fees via the Mastercard network, but also allow companies to efficiently attach payments to cost centres, projects and tracking—massively reducing the burden and costs associated with admin.
Which brings me nicely on to gaining a real-time view and control over company spending, in its various forms. It’s not only vital in understanding what company money is being spent on, but also to spot abnormal activity like accounting fraud. Patisserie Valerie, a very recent example warned of potential accounting fraud within the company and their shares were duly suspended. The company went on record to say that it could cause a "potential material" mis-statement in its accounts. You would hope that a company of their size would be able to weather this storm, but for smaller businesses, this could be the final nail in the coffin.
Retail technology to help with cost control
A big part of company spending is expenses, and one of my favourite topics.
It’s a long-trodden path on which many companies are yet to fully embrace the best technologies. Out-of-pocket expenses and end-of-the-month submissions stop finance teams from knowing what is owing to their employees. Even sophisticated cash flow modelling cannot account for everything that the company is liable for, and there’s always the potential for those nasty end-of-the-month surprises.
So, the C-suite no longer has to wait for monthly reports from each department to be produced and shared halfway through the next month to understand the company’s cash flow. The top-level data they need is there when they need it, and action can be taken faster and before larger problems occur.
The best way to look at whether you need to change and improve the platforms that you use is to ask yourself this simple question. Are you spending too much time on admin and reporting to understand the past and not enough time focussing on the future? If that answer is yes, then you already know the next answer.
At Expend, we are helping retail businesses to not only streamline their expenses process but also provide them with a way to manage the spending of departmental budgets in real-time and purchase in foreign currencies without fees or charges.
Expend is a clever, real-time expenses solution that automates expenses and makes managing business spending a doddle.