Market Perspective

Inflation in Perspective: How Smart Businesses Can Adapt to Rising Costs

February 11, 2022
The C2FO Team
A closer look at inflation in perspective

As inflation spikes in many markets, more companies are looking for ways to push back against higher costs and protect their margins. 

Raising prices might be the first option many businesses consider, but there are others. For example, if a company offers discounts for early payments, that can free up working capital. Those funds can then be used to negotiate better prices on inventory and materials, or fund new products and innovations. 

In this infographic, you’ll discover a clearer picture of the current inflationary environment, its potential impact and how it compares to historical trends, as well as advice on navigating what’s ahead. 

What You Need to Know About Inflation With rising costs and interest rate changes ahead, your business can meet challenges head-on.  82% of companies worldwide are seeing higher prices for wages, raw materials and more.   #2  Inflation is a huge concern for CEOs, second only to the pandemic.  How long do CEOs expect increased pricing pressure to last?  Until mid-2022 / 10% Until end of 2022 / 35% Until mid-2023 / 24% Beyond 2023 / 31%  Causes Labor shortages   Supply chain disruption  Strong consumer demand Surging exports Crop-destroying weather  Though 2021 inflation set 40-year records, the current upswing in the consumer price index is not expected to reach the heights of 1980 (13.55%) or 1974 (11.05%), according to the Federal Reserve.  How are businesses planning to respond? Cutting costs Passing price increases downstream Absorbing prices into profit margins Changing suppliers  You have more options with C2FO.  ACCELERATE PAYMENTS Dynamic discounting is a flexible early payment alternative that lets you select invoices for early payments and set discount rates.  BOOST BALANCE SHEETS Shortening your cash conversion cycle means you’ll have funds on hand to strengthen your balance sheet and meet key metrics.     REALIZE POTENTIAL With more working capital, your business can pay down debt, offset costlier shipping and production, or invest in innovation.  Sources: Conference Board C-Suite Outlook 2022, U.S. Bureau of Labor Statistics


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