Planning ahead: How will the vaccine roll out impact your bottom line?
Despite the disruption and continued uncertainty caused by Covid-19, there has been positive news for the UK’s business community in light of the approved use of effective Covid-19 vaccines.
While the full effects of the vaccines on our day-to-day routine won’t be felt for some time, meaning customer and team habits won’t change immediately, with the beginning of the roll-out it does now mean that business leaders can, with more confidence, start to put plans in place for a post-Covid business landscape.
Of course, no one can be sure what that landscape will look like. Many of the habits we have picked up during lockdowns and restrictions are likely to stay alongside old ones that we will return to when a more normal way of life resumes.
For businesses, it is likely to be different for each depending on their sales model and sector, but now is the time for all business leaders and finance teams to assess what may change and, ultimately, how those changes may impact the company’s bottom line.
It's been remarked by those who are most optimistic that by Spring, the business world could almost be back in full-swing; with operations back up to near-100 per cent, customers able to visit bricks and mortar stores, and employees likely to be able to mix up their working weeks with home working and going back to the office.
With stricter restrictions put in place again in England and Scotland, this currently feels a long way off. Yet it's important finance teams plan long-term, as the rollout of the vaccine will begin to gather pace in the coming weeks and months and it’s crucial finance teams are prepared for the impact it will have on customer habits.
Online boom
For some time now, the habits of buyers have been evolving with retail insight experts forecasting the decline of the traditional shopping experience in favour of the digital world. And this is being echoed right across all industries and their supply chains, where businesses in 2020 had to order products and services online out of necessity - yet are likely to continue to do so going forward.
Reports suggest the trend to e-commerce will continue in 2021 with an estimated 2.14billion people worldwide expected to buy goods and services online[1].
For many businesses, e-commerce stores have been a cost-effective way of selling their products and the pandemic has led to thousands of businesses pivoting their sales strategy – some temporarily, others permanently. This has been seen right across all sectors from hospitality to manufacturing to recruitment. Businesses in every industry have had to move at least some elements of their operation online.
According to BusinessWest,[2] a fifth of large businesses have increased investment in digital transformation initiatives and, according to some estimates, the pandemic has sped up digitisation by five years, giving us strong indicators that online will be key in the long-run.
Prepare ahead
It’s important that your finance teams are prepared for the impact of both customers and staff changing their habits. You will need to budget for things like new supplies for your physical store if you are to reopen, the return of staffing and premises costs such as heating and lighting if your workforce is returning to the office and for industries like recruitment, you may go back to conducting in-person interviews, seeing the return of travel costs. All of these could have an effect on the company’s bottom line.
Having access to a strong financial management system with real-time data available, finance teams will be able to look ahead and project how their finances may take a hit or revenue surge. Forecasting will be key - and having an understanding of how your online sales and bricks and mortar sales will be impacted by a post-Covid world will give you a better understanding of your future revenue.
Insights from the real-time data will help to bring together the finance, sales, customer, and operational divisions within the company, helping them to make well-informed decisions collaboratively on opportunities for business expansion, or highlight areas where the company may be able to save costs.
With the continued vaccine roll-out a positive light at the end of the tunnel, now is the time for finance teams to put productive plans in place to step ahead of the game. We’ve all spent the last nine months or so planning for an uncertain and unclear future and reacting to the changes in customer habits and restrictions to the best we can. With more restrictions put in place it might feel like a never-ending situation - but now is the time to look beyond that and to start looking forward.
To find out more about The Access Group’s financial management software, visit www.theaccessgroup.com/finance/.
[1] Source: https://www.statista.com/statistics/251666/number-of-digital-buyers-worldwide/
[2] Source: https://www.businesswest.co.uk/blog/how-businesses-are-utilising-technology-adapt-covid-19-climate
