Managing business finances better during inflationary times

There are ways businesses can manage their finances better during inflation, writes Ray Ryan from The Noledge Group.

Businesses are facing some of the most uncertain times in history, with global inflation at a very high level. Lingering supply-chain issues are causing rising costs of goods; war is driving energy and fuel price inflation; and together these factors are conspiring to disrupt Irish businesses and their customer bases and supply chains around the world.

It is so difficult for businesses to manage fluctuating input costs and sales prices. Just think of how the construction sector is struggling to cope with rapidly changing contractor and material prices in terms of costing work for customers. Achieving some predictability when margins are thin is ultra-difficult.

“We are currently facing several unprecedented challenges. It is therefore more important than ever to be able to analyse business data to understand company performance and the current market”

The other result of prices climbing at a brutal rate, is that people have less disposable income than they did before the cost-of-living crisis. This in turn means people are less likely to buy things that aren’t essential, which will have a rippling negative effect on businesses.

Experts predict that an economic recession could be looming, and in the next few months many small businesses could be on the verge of financial difficulties. In response to inflationary threats, many businesses are reducing their labour forces and delaying major financial decisions.

Reacting to changing circumstances

The good news is that the fate of small businesses isn’t written in stone and are usually able to react quicker to these changing circumstances. There are ways businesses can manage their finances better during inflation so that they don’t have to suffer from lack of sales or profits due to slow economic growth and rising costs.

Companies can take advantage of data to understand their business better and prepare them for the challenges ahead. Leveraging technology and adopting smarter approaches can certainly help businesses to navigate the choppy waters ahead.

Enhanced visibility

Understanding your numbers goes a lot deeper than knowing how much money is in the bank account. By collecting and analysing their data, organisations can achieve increased visibility of their overall business performance. Consumer demands are ever-changing in an uncertain economy. Finance leaders should have access to real-time reporting to enhance decision-making and respond quickly to evolving trends and market conditions, including rising input costs.

Financial and enterprise software can be used to manage inventory processes and handle shifts in consumer demands and supply chain cost increases. By deploying an Enterprise Resource Planning (ERP) software management system for example, companies can get real-time data that can be used to support stock ordering, storage, and control, preventing stock levels from being too high or too low, and critically ensuring better forecasting and costing.

Our customers are telling us how the uncertainty of the inflationary financial situation makes it even more critical for them to be able to clearly see the path ahead, make quick decisions and take control of their own journey.

Automate day-to-day processes

By bringing automation into an organisation, business owners can better manage day-to-day operations. There are many ways to incorporate automation. For example in the areas of streamlining payments and invoices, companies can set up automated alerts for customers to remind them of outstanding payments.

Additionally, automating business processes means that companies have access to more accurate financial information at all times, allowing business owners to monitor how well their business is performing against its purchasing and sales budgets on a weekly basis. Again, this is essential during periods of inflation as it will allow any necessary adjustments to budgets and pricing to be made before they become issues down the line. 

Enterprise and financial systems can drastically cut down the time spent manually inputting information such as financial reports, inventory control, and order processing. These solutions automate these processes so that businesses can run in real-time and respond to spikes in costs, for example.

Greater flexibility

Amid high inflation, consumer demands are shifting. Instead of having multiple systems for finance, sales and marketing, a business should consider the value of having one platform to manage all its data. By having different systems, companies need to produce reports for each department, which will take longer to assemble as data must be re-entered in different systems. This is not only inefficient but can lead to errors and inconsistencies in forecasting, pricing and reporting, not to mention result in financial and productivity costs.

With an ERP system for example, companies can analyse and organise data to reduce stock holding and forecast material purchasing needs more accurately, which will allow faster customer order processing with less errors leading to a better customer experience. In addition, by monitoring customers’ payment behavior and predicting how much cash is likely to be in the bank at any point in the month, inflation driven cash crunches can be predicted better and avoided. Alerts can be set up to inform staff when they need to chase invoices or if there are any overdue payments so they can act straight away.


When looking ahead, it is important that organisations use software that will support them as they grow and respond quickly to changing demands. We are currently facing several unprecedented challenges. It is therefore more important than ever to be able to analyse business data to understand company performance and the current market.

Investing in streamlining enterprise and financial technologies is one of the most effective ways to manage a business during inflationary times. It can save critical time, money, and other valuable resources. 

While these systems can initially be costly, businesses that take the leap and invest in the technologies can ultimately increase their efficiency, security, performance, and service delivery. Critically, modernising a company’s financial management system can help businesses remain competitive and alive during the most challenging of inflationary times.

Ray Ryan
Ray Ryan is CEO, and founder of The Noledge Group, a leading provider of financial and Enterprise Resource Planning systems and software. It has evolved from the coming together of two long-established ERP and financial software specialists OSSM (a leading NetSuite Solution Provider) and Envisage (Award Winning Sage Partner).