The pandemic, Brexit, ongoing geopolitical conflicts, and rising inflation have placed unprecedented pressure on the global logistics industry. Soaring material costs, wavering customer demand, and disrupted shipping patterns are just some of the challenges businesses are continuing to face as a result.
Against a backdrop of such unpredictability, flexibility and adaptability remain crucial for logistics businesses. It enables them to better adapt to unexpected shifts in market conditions. While some businesses have sought to nearshore manufacturing operations or diversify suppliers in an attempt to wrestle back some control over the uncertain landscape, many neglect to consider how internal processes could hold more of the answers.
Although back-office accounting systems are rarely a focus for logistics leaders, modern cloud finance platforms can knit seamlessly together with other fundamental business systems to provide valuable features and insights. It can equip teams with better, more comprehensive data that can be used to make meaningful business decisions to maximise flexibility and opportunities for growth.
Strategic stock management
One of the crucial areas in which businesses can leverage data to enhance flexibility is stock management. Interoperable accounting systems can interact with, and share information across, other mission-critical programmes from third-party providers, including inventory management, to bring all the crucial data in one place. Stock levels can be scrutinised alongside financial and operational data in real-time so inventory can be scaled up or down strategically. This data-driven strategic stock management can help reduce the amount of money being held in stock that’s not being required at the expected rate, or unlikely to be used soon. This can free up the budget to be reallocated elsewhere, allowing logistics businesses to accommodate new priorities quickly.
Increased visibility and real-time reporting
Logistics managers need access to a detailed and up-to-date breakdown of costs to help inform decisions across the business. Interoperable systems automatically replicate data across systems, eliminating the need for error-prone rekeying or manual reporting and allowing users to easily extract relevant data. They can see cost data across different areas, including warehousing, labour, fuel and shipping, to evaluate spend and take fluctuating prices and market conditions into account. This granular visibility allows managers to quickly identify over or underspending, inefficiencies, and unnecessary expenses. They can then quickly and easily reallocate funds where they’re needed most. This visibility allows businesses to keep their fingers on the pulse of changing conditions and act quickly to maximise opportunities.
Greater insight also brings benefits to cash flow and helps teams ensure there’s enough liquidity to meet operational needs. With constant moving parts and continuous billing and payment cycles, managing all the moving parts can be a challenge. Yet, this data-driven insight, enabled by a centralised cloud finance platform, allows businesses to plan more effectively for unforeseen expenses or take advantage of opportunities that require quick financial action.
Streamlining operations with enhanced activity insights
With a comprehensive view of key operational information across the business, logistics leaders have all the information they need to optimise operations and streamline processes at their fingertips. It can help identify frequent sticking points or inefficiencies across the business and equip the business with the data they need to take effective action. Frequent errors in manual order picking, for example, and the knock-on impact on business finances, could indicate the need for new automated technology that would quickly overcome challenges. This means resources can be adjusted accordingly, with employee time and effort being reallocated to more strategic and fulfilling business activities. This insight and data can be leveraged with individual expertise to deliver a better overall business outcome.
The data and insight offered by modern, interoperable cloud financial systems provide a more granular and accurate picture of what’s going on in the business, the data-based evidence to make strategic changes, and the ability to identify and mitigate risks early on. This agility is crucial in adapting to rapidly changing market conditions, unexpected disruptions and new opportunities. While there’s a hope that the geopolitical landscape will settle somewhat in 2024, the businesses that take full advantage of their accounting software and operate with good visibility, control and flexibility will be better placed to weather the storm.
By Pascal Chandler (pictured), business consultant at cloud-based accountancy software bluQube