As of June 13 2022 we officially entered a "bear market" as the S&P index has tumbled more than 20% from the all time highs. Since 1945, about 70% of all bear markets is either caused or leads directly into a recession which makes me think of two words “cost cutting”. Any whiff of any form of a slow down automatically trigger every business and consumer into tightening their wallets. Yet, at the same time as business owners we are expected to maintain the same level of service while somehow magically manage with less incoming revenue. As always the first place to look for cost cutting is at "people costs" since this is typically the highest essential cost after expenses such as office and equipment.
However, I want to challenge this typical boom and bust theory of hiring people when the economy is good and letting people go when the economy slows down. My thoughts are that if a company has to let people go when the economy slows down, I feel this is a reflection and indicator of “bad management". Why? Simply because every person who works for the company should be adding value to the bottom line. In other words where there is an opportunity to utilizing technology to automate and weed out imperfections in a company’s operations/process a business manger has to augment and align existing resources with software and processes in order to maximize each employee’s value contribution to the company.
For example, I am often baffled by potential customers that I speak with that prefer to keep employees in a state of “manually downloading checks and statements” versus using their G-d given brains to do something a little more constructive than what a trained monkey can do!! Now that the US economy is heading (according to some- already in) a recession, shouldn’t montonous boring work be automated via software and people should be tasked with more higher thinking/challenging jobs?
I know this makes common sense, but as the saying goes “common sense is not so common” so I’ll say it outright, if you have to let people go in your company because of a recession it’s an indication of weak management and lack of foresight to focus healthy investments in technology and automation. In other words a manager should always be running the company like it is a recession and so when a recession hits, the firm is in good shape and never has to face the dreaded laying off conversation.
One of Ldgersync’s coolest features is our ability to fetch bank statements and check images and deposit those images into Xero’s filing cabinet. Think about it all those manual hours spent on downloading statements and check images automated and fed into Xero!
About Maurice Berdugo: Maurice started Ledgersync (https://www.ledgersync.com) back in 2016 to help Accountants and Bookkeepers automate reconciliation process by auto fetching bank statements and check images.