With the continuing ecomonimc and political uncertainty in the Eurozone, downgraded credit ratings and the latest news that despite some "green shoots", the UK will continue to endure public sector cuts, the way ahead is likely to continue to be choppy. Despite what economists have called "some genuinely encouraging news" on the back of the unexpected growth in UK manufacturing figures, what organisations need most of all is a tight control on cash flows. That might sound obvious, but maintaining enough liquidity to sustain growth is what keeps many CFOs awake at night.

Eurozone Exposure

For example, with about 40% of Britain’s trade in the Eurozone, banks in the UK have billions of pounds worth of exposure to the European financial market which makes them more reluctant to lend – with potentially catastrophic results for organisations’ cash flows. A  factor which is being compounded by many companies hoarding cash in an effort to stave off overexposure.

Localisation

This situation is set within a wider global financial framework, where the new buzz word is “localisation”. Not simply an opposite position to globalisation, but one which draws its focus from the local economy and aims to control risk by doing so, by providing sustainable growth within local markets. In effect, the trend to be looking out for over the next couple of years is a new “third way” of doing business. The old methods of outsourcing business in the way that it currently stands, will not be robust enough in the future. Organisations cannot afford to do business in a country where the supply chain is at risk from events that cannot be controlled.

In some cases it is precisely because of the current market conditions that organisations are looking at improving controls, visibility and creating strategic alliances with partners and suppliers. In an effort to minimise risk, many organisations have developed better business models. Whereas once upon a time an expanding business might have developed a new department, or bought out a business which complemented theirs, these days it’s increasingly likely that an organisation will simply “borrow” their goods, services or consultancy. A key factor to the ongoing success of these relationships will be whether they are sustained in periods of growth and stability.

Opportunities are Out There

Organisations which are able to recognise the opportunities that do come from periods of uncertainty, able to minimise risks to assets and explore new ways of doing business will find themselves better placed to withstand volatility. For example, P2P departments are finding themselves under more scrutiny now than ever before, and are acting as the powerhouse for cash flow within their organisations. As a result, many CEOs are exploring what can be done with the data already being extracted from the process and leveraging that to help improve their organisation’s bottom line.

Workflow Your Departments

In the future it’s likely that we’ll see an increasing interdependence of various departments with Procurement, AP and Treasury working ever closer together. With process automation clearing the way for employees to leave behind the more mundane processing and take on more operational tasks – CFOs with their fingers on the pulse will use workflow technology throughout these departments to increase controls, highlight risk and maintain crucial cash flow levels.

With the focus on the right kind of automation technology for your organisation, being able to take advantage of early settlement discounts, paying suppliers on time, and being able to accurately report to the market replaces corporate uncertainty with predictability.

AP in the Driving Seat

In a period where there is so much volatility, organisations which are able to demonstrate sustainable growth and are accurate in their reporting methods will win the confidence of partners, suppliers, banks and investors. Ultimately where there is stability, there is confidence, and where there is confidence – often there is profit. If P2P is able to provide that for an organisation, those involved will increasingly find themselves in the driving seat.