Driven by increased demand for remote work, fluctuating regulations around personnel and public health policies, and worldwide supply chain disruption, 5- and 10-year plans for digital transformation have been compressed into much shorter time periods. And the future is still uncertain.

The QuickBooks Small Business Recovery Report, released in April 2021 by Susan Woodward, former chief economist of the U.S. Securities and Exchange Commission and the Department of Housing and Urban Development, provided some encouraging observations.

The study found that while some sectors collapsed and others surged during the height of the pandemic, overall business performance was surprisingly resilient. In April 2020, median monthly revenue across U.S. small businesses dropped a total of about$4.6 billion. A year later, by March 2021, all ten sectors studied had rebounded to pre-pandemic revenue levels. Nationally, at the end of June, monthly revenues of small businesses were up by 25% compared to the same month before the pandemic. That's equivalent to an extra$4,000 in monthly revenue per business.

Together, these ups and downs pose substantial business management challenges and opportunities. For example, a resurgence caused by new COVID strains, plus shortages of workers and competition for goods that are still in short supply may increase financial strain in the short and medium terms. 

Shifts Driving the New Normal

In addition to the financial challenges experienced by small businesses during the pandemic, a number of shifts have emerged that are changing the way businesses operate. Understanding these shifts will allow small businesses to adapt and evolve to fuel growth.

Shifts in transaction channels, especially at retail:Some of the vast disruptions we've seen -- particularly the shift from local retail to online shopping and gig worker-based delivery -- may be here to stay. Consumers and workers are getting used to the remote model. 

Disruptions to manufacturing, supply, warehousing, and distribution:These elements of industry are linked inextricably, and their interdependency has been proven during the pandemic. Social distancing, worker availability, and access restrictions based on government policies and health recommendations have led to workplace chaos. Unpredictable supply chains, along with changes in trade policy, caused many organizations to rethink their traditional just-in-time and rapid inventory turn strategies. 

Transformation in the construction industry:Construction companies are handling supply shortages and demand surges simultaneously. Access to goods like lumber has been difficult, both because of the pandemic worker shortage and the 2020 wildfires. And home sales have skyrocketed with overall sales up 9%, median home prices up 16%, and inventory of homes for sale at a record low, dropping 30% year-over year, according to CNN and the National Association of Realtors. 

"The global changes brought about by COVID-19 have posed a myriad of challenges for business owners of all sizes, but advancements in technology are not only helping to overcome these pain points, but also fast-track digital transformation, improve agility, and achieve more success," said Joanna Hamilton, Director of Marketing, QuickBooks Desktop Ecosystem at Intuit.  

How technology can help

Businesses no longer have years to evolve their systems for flexibility. As we saw during the early months of COVID, companies need the ability to change in a matter of months, or even weeks. McKinsey reports that companies are increasing their use of advanced technologies in operations 25 times faster than they had originally planned.

With this need for acceleration, long evaluation cycles are a thing of the past. That's why it's very important to go with a proven accounting and inventory management partner that has a long track record and trusted reputation.

Accounting and inventory management technology can help business plan for the unavoidable, avoid business interruption, and adjust successfully to today's rapidly changing conditions.

Inventory management and predictive analysis help reduce errors

A comprehensive business software solution can help manufacturing and distribution companies track individual inventory items by the row, shelf, and bin. The ability to track and locate items in transit or on consignment is also essential.

Mobile technology comes into play here, as well. Workers in warehouses need to scan barcodes and perform live inventory audits without shutting down the facility in order to keep goods flowing out and revenue flowing in. Intuit QuickBooks Enterprise, for example, supports online sales, integrating with Amazon, Shopify, and EDI-compatible systems, and it provides tools for labeling and shipping.

Supplier relationship management accelerates processes and normalizes costs

Manufacturers need to be able to track sub-assemblies, assemblies, and finished goods. Operations managers need solutions that can map the dependencies between each stage of production in order to visualize processes and troubleshoot anomalies quickly. 

Managers can use inventory management software to see details about how many finished items can be built with materials on-hand, drilling all the way down to the sub-assembly. Manufacturing operations also need automation tools that can identify when materials are in short supply and generate purchase orders and detailed build orders based on established thresholds and rules. The ability to set automated pricing and markup rules based on fixed pricing or current bill-of-materials costing helps bring income above expenses reliably and consistently.

Pricing and shipping optimization reduce delays, improve customer satisfaction

Solutions like QuickBooks Enterprise help managers compare contracts and pricing across vendors, develop automated pricing rules, and prevent out-of-stock situations, which are a growing reality for businesses.

In fact, 2020 and 2021 have had the largest spike in lost shipping containers in seven years. This is an example of why flexibility in a changing environment, with capability to manage inventory and raw materials on the fly, is mission-critical. Being able to choose which warehouses fulfill orders, or to split an order between warehouses to make sure goods make it to the customer in the best possible time, are now essential functions.

End-to-end visibility for transparent customer service

One industry that is highly dependent on complex supply chains is construction; it requires a constant flow of raw and early-stage materials, just like the manufacturing sector. Unlike manufacturing, construction also relies heavily on a very experienced and expensive workforce. Since work output is often funded directly by customers, transparency and communication are absolute necessities.

Construction executives need to rely on digital solutions more than ever. Job costing, a practice that's usually tedious but predictable, has become much more difficult, as estimates now require a wide range of unknown factors. Worker time tracking -- on site, in the field, and using each worker's individual rate -- needs to feed into real-time cost prediction. Armed with the right technology, contractors can predict costs before the job ends, allowing them to adjust expenditures and manage cost overruns.

Of course, construction isn't the only industry that requires end-to-end visibility and transparent customer service. In the mobile-driven age, companies in manufacturing, distribution, retail, professional services, and more will benefit from a solution like QuickBooks Enterprise. It even integrates accounting and inventory systems with other third-party solutions like CRM, social media management, and helpdesk.

As Hamilton said, "QuickBooks was created to help entrepreneurs and business owners manage their financial lives seamlessly -improving their cash flow and powering their prosperity. As businesses grow, they need more features than when they initially start -and that's why QuickBooks Enterprise and its enhanced partner ecosystem exists -to help businesses evolve alongside the rapidly changing world in order to support and manage so much more than just accounting."

Learn more today at QuickBooks Enterprise.com.