It’s been a bumpy ride. The pandemic and its containment have brought significant upheavals along with unwanted and unpredictable side effects, among them the global phenomenon of rising inflation.

When Pew Research Centre analysed data from 46 nations in the third quarter of 2021, inflation rates in 39 were higher than in the third quarter of 2019. Many nations showed variations on the same pattern: relatively low inflation before the arrival of Covid-19 in the first quarter of 2020; flat or falling inflation for the rest of 2020 and into 2021 as economic activity fell; and rising inflation during 2021 as the world tried to regain some semblance of normality. In the US the inflation rate is the highest it has been for 40 years, and in the UK for 30 years.

‘With economies reopening in late 2021 there was a huge surge in demand for goods, and supply chain disruptions have created bottlenecks. They are the main reason for rising prices,’ says Brigitte Granville, professor of international economics and economic policy at Queen Mary University of London and author of Remembering Inflation.

AB has asked experts in the field – heads of finance as well as business advisers – about how businesses can go about mitigating the effects of inflation.


Paula Byrne FCCA, principal, Paula Byrne Accountants, Dublin, Ireland
‘Proactively decide on your pricing strategy. The most common include cost-based pricing, value-based pricing and competition-based pricing. Cost-based would seem most appropriate during times of rising inflation, but it should mirror the value you are providing while at the same time pitching yourself competitively.’

Dev Ramnarine FCCA, partner, ExP Group, Florida, US
‘In order to implement effective pricing strategies, you need to understand your customers well. Stratify them and target the stratum that is less price-sensitive. Be upfront about any price increases.’

Carl Reader FCCA, small business consultant, UK
‘When it comes to inflationary increases, businesses need to be very careful how they present this to clients and customers. They should find a justification that benefits the customer rather than the business. This might be that you’ve built new systems that can benefit the end customer or you’ve increased your levels of service. But business owners shouldn’t be afraid to pass this on. As consumers, we are all hit by inflationary increases, and business owners need to have confidence in the way they deliver the message.’


Eddy Burello, business partner and adviser, MNP accounting, tax and business consulting, Canada
‘Increasing prices to reflect rising costs may prove inadequate on its own. Reviewing your input costs and finding efficiencies will help reduce overall operational costs to improve your EBITDA and mitigate inflationary pressures.’ (See also the AB article Mitigate rising costs.)

CR: ‘Consider whether there are smarter ways to be spending your money. By taking a zero-based budgeting approach [see below] and reviewing each and every cost in the business, you’ll hopefully be able to bring costs down.’ 

PB: ‘Pay particular attention to subscriptions and service contracts. Shop around. Perhaps change energy and internet providers. Consider hedging if you are particularly reliant on the purchase of materials. Encourage your clients to stay on top of who owes them money. Ensure reminders are timely but appropriately issued – there’s a very fine line between annoyingly chasing for payment, resulting in your client never getting work again from that customer, and polite and firm reminders about payment.’

DR: ‘A cost reduction focus could also include developing a human resource strategy to attract and retain talent with competitive monetary and non-monetary benefits.’


PB: ‘Although the European Central Bank has said rate rises in the euro area are “very unlikely”, what inevitably goes hand in hand with higher inflation is higher interest rates. I’m urging all my clients to review and reduce their debt levels wherever possible and hold off taking out new debt in the short term.’


Vincent Lim FCCA, CFO Asia Pacific, Datalogic, Singapore: ‘We have moved away from incremental budgeting to zero-based budgeting. All of our previous assumptions are no longer relevant, and we cannot allow staff to take last year’s assumptions and do just what they have always done. With zero-based budgeting you start again with everything – every single country, entity, profit centre and cost – including salaries. In normal times it would be a waste of company resources but it is the right approach right now. There can be a lot of resistance to the scrutinising of salaries, but the CFO must have the courage to stand up to this.’


EB: ‘For some clients with investments the focus is how to reposition their portfolios and prevent the erosion of their purchasing power – for example, by reassessing whether real estate or a natural resource would be a better asset than fixed income type securities. Real estate is going up as inflation is pushing up rents, so it’s a natural hedge against inflation overall.’


CR: ‘Ensure you’re using technology wherever possible to increase efficiencies. If there is still a lot of manual process within the business – eg in the sales function – consider whether this could be improved by better use of a customer relationship management system. You need to look the process and work out what doesn’t have to be done, how you can optimise that and minimise wasted resource – whether that’s time or money.’

DR: ‘Ask the question: what gets in the way of your productivity? When combatting inflation we often forget the importance of leveraging our human capital. You might identify poorly designed processes, irrelevant controls, unnecessary steps, manual tasks. Most of these can be easily changed or updated and lead to significant improvement in completion of tasks and overall improvement in individual productivity and motivation.’

Supply chains

DR: ‘The impact of Covid-19 and related shutdowns have amplified significant inefficiencies within most supply chains and are costing companies a lot. Consider establishing alternative supply chains or an expedited supply strategy – eg a domestic alternative to a foreign supplier. Undertake a fresh look at inventory management – raise stocking levels for critical supplies with low holding costs, and review the safety stock levels for just-in-time supply chains. Also take the opportunity to renegotiate contracts and terms with suppliers. Several of our clients benefited from these conversations as they were able to obtain discounts for bulk purchases.’

More information

Watch professional investor John Kattar’s videos How is inflation calculated? and What is inflation?