As stagnant wage growth and lacklustre consumer sentiment continue to put the brakes on economic growth in Australia, finding efficiency gains has never been more important, for local enterprises that hope to survive and thrive in the 2020s and beyond.
Research published by one of the country’s leading insolvency firms last year revealed almost 10,000 small and medium sized businesses were teetering on the brink.
According to the SV Partners Commercial Risk Outlook Reportof August 2018, political uncertainty and the property market slump were primarily responsible for dragging businesses into the doldrums.
The Australian Industry Group’s Australian economy in 2019: Outlook for industry and businessreport published in May 2019 noted that surveys of business conditions had confirmed a sharp slump in the second half of 2018, continuing into 2019.
Weak productivity growth (down to just 0.5 per cent in 2017-18) was identified as the single biggest challenge facing the Australian business market in 2019. The report noted its knock-on effect on income growth and named investment, innovation and skills as the remedy.
Embracing new technologies in the finance and accounting sphere can give local enterprises a productivity boost on multiple fronts. Here are three of them.
Productivity acceleration through automation
Automating processes in the accounts department can be a quick win for Australian businesses which currently tackle the month-end close manually.
Implementing financial software which automates tasks and workflows with rules-based systems can eliminate many hours spent on low value transactional activities. This can either free accounts staff up to undertake higher value work, or enable the enterprise to reduce its headcount in the finance division.
Not sure if it’s worthwhile making the switch? Other enterprises around the world are voting with their feet. According to research by Accenture, up to 50 per cent of transactional roles will disappear over the next five years. That means Australian businesses which persist with old school accounting processes may find themselves at serious disadvantage to competitors which have embraced the automation trend.
Leveraging business insights to pursue productive plans for growth
When it comes to making business decisions, ascertaining their effect on the bottom line is critical. Having immediate access to key data makes it easier to determine whether opportunities are worth pursuing and the resources that doing so will necessitate.
Implementing cloud accounting software means the end of ‘decision making by feel’, courtesy of the fact such solutions can deliver an up-to-the-minute view of the enterprise’s position.
Coupled with self-service business analytics tools which allow leaders across the organisation to extract and interpret data to inform their decisions, it can assist companies to chart the course most likely to boost profitability and growth.
Attracting higher calibre employees by embracing productive, tech-driven practices
Embracing change begins with developing a culture that attracts top talent. And top talent is attracted to enterprises which are forward thinking and proactive.
Implementing business software which enables a culture of data-driven decision making lets employees and potential employees know the enterprise is across the changes the digital revolution has wrought and is willing to evolve accordingly.
That’s an attractive proposition for innovative individuals who want to ensure their own skills remain current in a rapidly changing market.
Time to act
Taking a business as usual approach to operations has become a risky option for many Australian enterprises, as difficult economic conditions and intense competitive pressures continue to put the squeeze on their growth prospects and profitability in 2019-20.
Embracing automation and leveraging new technology across the enterprise can help businesses of all stripes achieve the productivity gains that are critical to their long term viability.
Claudia Pirko is Australia and New Zealand Vice President at BlackLine.