With low expectations in tow, current earnings reports have been mixed and confirm that a slowdown in global growth, coupled with low oil prices, are creating pressure on corporate profit and revenue growth. The S&P 500 is poised to post a third straight decline in profits while revenue is on pace to fall for the fifth quarter in a row. More specifically, corporate earnings are on track to fall 7.3% in the first quarter of 2016, and initial projections show Q2 earnings are also set to contract. U.S. gross domestic product rose just 0.5% in the first quarter.
What is more alarming in a persistently sluggish economy is the corporations’ capacity to repay increasing debts with flat operating cash flows. Questions of sustainability arise when corporate debt has grown at almost 30% over the past year, and the cash flow to pay it has fallen slightly. To add further uncertainty into the mix, traders are now pricing in a 55% chance of higher borrowing costs that will affect stock price.
One thing is clear, revenues will be generally harder for corporations to come by during the time when global demand for goods and services remains lethargic. Therefore, corporate officers must start placing additional focus on improving profits that keep investors and analysts on board. There are various spring-cleaning type of cost reduction activities that would help maximize profitability and produce positive cash flow:
- purchasing goods and services for less and off negotiated contracts
- processing invoices and expense reports more quickly and accurately
- developing visibility into your spend
- sourcing items that decrease their total cost
- rejecting and preventing unnecessary spend, and many more
When nature bestows us with flowering blooms and floating pollen each Autumn, we find remedies that control our maverick sneezing. In similar fashion to tapering that uncontrollable sneezing, it is time for corporations to refocus their efforts on maximizing profits by putting in place strong spend management programs. Who exactly can help manage this corporate spend in such tough economic growth conditions, you ask?
Coupa is the premier vendor of real, measurable savings from operational efficiency, cost control, cash management and spend avoidance. This is all made possible with one simple cloud-based spend management software platform solution that employees actually enjoy using. Coupa can ensure customer success and profitability by achieving 100% user adoption, the highest ROI, lowest TCO, fastest time to value, and all on one unified suite. The Spend Management suite is comprised of pre-integrated cloud applications that provide visibility and savings opportunities across every area of spend: Procurement, Invoicing, Expenses, Sourcing, Inventory, Contracts, Budgets, Analytics, Open Business Network, and Storefront.
Besides the core qualities that produce exceptional results for customers, Coupa is raising the bar even further this year with Coupa Inspire ‘16. The conference will bring together customers, analysts, CIOs, CPOs, CFOs, partners, and many more in San Francisco. You do not want to miss the best opportunity to learn about the latest visibility, speed, adoption, business impact, and commitment to responsible spend this May 10-12th. Sir Richard Branson and Sam Branson will join Coupa CEO Rob Bernshteyn as Keynote Speakers. Registration is still open, and you can follow all of the magic on Twitter: #CoupaInspire.
In the end, why would you wait for your investors to panic? Contact us today to start the conversation now!