CFOs Prepare to Automate Their Way Through a Challenging Future

After a year of unexpected challenges for CFOs, including rising energy costs, higher inflation, reduced consumer confidence and reduced government support, they are looking increasingly to automation and technology to manage what comes their way writes Laurent Descout, CEO and Founder of Neo.

Fintech for CFOs

CFOs have felt the effects of global economic pressures and extreme uncertainty more so than any other position in the C-suite, according to a Raconteur report.

It’s not set to get any easier for CFOs who can expect to face a looming global recession, the threat of the economy shrinking, rising inflation and tightening credit requirements in the year ahead.

In these challenging times, monitoring cash flow, payments, and currency exposure is more important than ever. But for many corporates, this is a significant problem in itself. They must contend with multiple banking partners, portals, and tools and struggle to get a single view of their firms’ finances and exposures.

As a result, CFOs are prioritising digitised solutions which provide everything they need in one place for enhanced visibility and efficiency.

What does the future have in store for CFOs?

The future isn’t looking too bright for businesses. 

More than half of London’s business leaders expect the city’s economy to worsen – rising costs and a shortage of workers are squeezing companies.

According to a Deloitte CFO survey, bank borrowing and debt issuance were rated less attractive now than ever since the financial crisis.

With interest rate hikes, finance chiefs rate credit more expensive than ever since 2009, with 70% of CFOs rating credit as costly.

In a move that the Federation of Small Businesses described as ‘catastrophic’, smaller businesses also face reduced government support on energy costs. It’s estimated that tens of thousands of companies are at risk of collapse.

Supply chain disruption and rising costs for businesses

They also have to deal with the knock-on effects of the cost-of-living crisis on consumers and their reduced spending.

In the foreign exchange (FX) world, recent volatility has meant corporates without formal hedging strategies suddenly take massive hits on their books.

Supply chain disruption and rising costs are the most significant worries facing UK’s mid-sized businesses in the coming months, according to a survey by BDO. Factors such as manufacturing and production significantly influence supply chain timescales, but so do cross-border payment cycles. Traditional approaches to cross-border payments are complex, long, and expensive, adding to inventory days. 

All in all, the immediate future is set to be highly challenging for CFOs.

How are CFOs reacting to the upcoming challenges?

With the onslaught of negative news facing CFOs, there is no light at the end of this very long tunnel.

However, a survey from Grant Thornton revealed that CFO optimism increased from 39% in Q2 of last year to 45% in Q3.

CFOs are now taking economic trends in their stride and shifting their focus on cost optimisation as and when needed – they now expect the challenges and are better prepared. According to Gartner, over two-thirds of CFOs plan to lead or be significantly involved in various actions moving forward.

CFOs are changing where they invest their budgets in coping with what’s ahead – technology will be a crucial trend for them evermore, with 57% of finance leaders planning to increase their investments in cloud-based planning and reporting solutions.

Many are exploring modern, scalable treasury management systems which offer access to customised interfaces that are easy to use, tailored to individual business requirements, and vitally provide a single view of their firms’ finances and exposures.

Take the rough with the smooth

While the future will be full of challenges for CFOs, many have accounted for this and have adjusted their budgets. Many remain cautiously optimistic.

They will be stretched thinly across many activities. Still, automation and investment in digital transformation initiatives will put them in the best position to battle against the economic uncertainties ahead of them. 

About the Author: Laurent Descout is the CEO of Neo.