Last week’s news that the economy grew a mere 0.7% over the quarter (undershooting most predictions of 1%) was unwelcome for many business owners in South Africa. Although this was an improvement on the previous quarter, when output decreased by 1.3%, the overall growth trajectory is underwhelming.
The South African economy has faced a number of headwinds this year, with the rand weakening substantially against the dollar, power outages affecting output and the prices of platinum and copper taking a knock. Economist Elize Kruger summed up the feelings of many when she said: ““Things look very bleak going forward. We just missed a technical recession and have nothing to be excited about today.” So against this very grim backdrop, how does a financial accountant keep the vision? Is it possible for keep aiming not only for survival but even to set your sights on business growth in this type of environment?
The answer is yes. Although this is a difficult undertaking, a financial accountant with the right mindset and know-how can help a company stay on a steady upward path, even in today’s economic climate. Here are some ways they can do this:
- Manage cash flow better than ever. In tough economic times cash flow is probably the most important aspect of a business which needs to be closely managed, as suggested in an insightful article from Mercantile Bank. A financial accountant should spend time analyzing how to drive down overhead costs and how to drive up efficiencies. In addition to this, he or she should think twice before approving new projects that are capital-intensive. Apart from the monetary outlay, expansion into new markets is likely to get muted results when consumers are cash-strapped and their confidence has taken a knock.
- Look for opportunities to merge or buy in your supply chain. In a low-growth environment, it pays for a financial accountant to be in touch with the business environment in which they operate. Are there other companies in the supply chain that are looking to shed assets or sell? Financial difficulties for others may create opportunities for your company to bring on a strategic partner or buy a competitor. A financial accountant should be cognizant of these. Taking a calculated risk at the right time – even when times are lean for you – could pay back dividends when the economy rebounds.
- Necessity is the mother of invention – or so the saying goes. For a financial accountant, that doesn’t necessarily mean inventing new products, but it does mean looking for new, more efficient ways to get things done. Can you expand the use of your existing accounting software to do something else for free? Can you think of ways to incentivize sales among your workforce without eating away at your existing bonus savings?
While all employees feel the strain of lean times, the financial accountant feels this more than most. They’re under the pressure to make money stretch further, keep employees paid and happy, and simultaneously maintain a healthy cash flow. With these kinds of demands being made on their role, one can easily be tempted to lose sight of the company’s vision and follow a chronological, rather than strategic, management style by responding to the most recent or urgent need first. If your company could use the help of a financial accountant who maintains a strategic focus and helps to keep the business on a growth trajectory even in tough economic times, get in touch with The Finance Team. Our seasoned, qualified finance executives can provide part time or interim assistance to your business according to its needs.