Inflation is well anchored in France and it creates instability and deep concern within companies. In this context, how to manage expenses in order to maintain investment?
2023 has started with unabated financial pressure, with many companies facing major challenges and corporate management, under pressure from inflation, are now putting the brakes on investments to save on expenses. What are the consequences of these restrictions on companies and their employees?
Many organizations react impulsively to save money, at the risk of losing alignment with their overall strategy and jeopardizing their long-term growth. We find that 36% of French companies believe that technological platforms that are too complex are a major obstacle to ensuring the management of several entities and having optimal financial visibility. Paradoxically, 31% of them have decided to reduce completely or partially their investments in technical supports due to the financial situation.
Technology is key
For several years, French organizations have been facing difficulties which have been accentuated by the complicated economic situation. Legacy systems that are too heavy are both expensive and rarely used to their full potential due to their complexity. However, organizations are aware of their areas for improvement, with 36% believing that better access to technological tools would allow them to reduce their professional costs.
There is no longer any doubt that modern technologies are the solution for businesses. Nevertheless, many are choosing to reduce their investments in these same solutions in the hope of saving enough to survive the crisis. This paradox indicates that they still underestimate the potential of the technologies available today, even more so when we know that many solutions are available at low cost or even free of charge In addition, investing in an expense management tool brings visibility and enhances the data to enable companies to identify and limit unnecessary costs but also to make accurate budget forecasts.
Efficiency is deteriorating in many areas
The uncertain economic situation also affects employees, whose daily lives are increasingly strained. Thus, 32% of companies have suffered the refusal of their employees to spend their own money on business purchases for fear that reimbursements will take too long.
The savings not only lead to an increase in the administrative burden, but also limit the possibilities for employees to perform their work properly. Two problems an innovative expense management solution can solve.
Declining morale at work
Not only can these spending limits negatively impact productivity, but they can also affect work culture. Indeed, a significant number of companies (92%) say that the cost of living crisis has had a negative impact on their culture and employee morale. Furthermore, as we have seen above, employees are sometimes obliged to personally advance professional expenses. Whether the latter simply refuse to do so or make up their minds, the relationship of trust between employers and employees is damaged, especially when reimbursement takes several months. Adopting new strategies and finding the right solutions allows companies to survive and grow after this difficult period, but also to improve the daily lives of employees while increasing productivity in a more ethical framework.
Savings and new financial solutions will be needed, but companies also need to realize that the technology to solve many of their efficiency and cost challenges already exists. Additionally, investing in modern spend management solutions is an effective way to improve employee well-being and retain talent, a critical issue in these turbulent times.