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.

The CFO has 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, it's more important than ever to monitor cash flow, payments and currency exposure. But for many corporates, this is a major problem in itself. They have to contend with multiple banking partners and different portals and tools, and struggle to get a single view on 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 get worse – companies are being squeezed by rising costs and a shortage of workers.

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

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

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

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

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

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

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

How are CFOs reacting to the upcoming challenges?

With the onslaught of negative news facing CFOs, it seems as though 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 in terms of cost optimisation as and when needed – they now expect the challenges and so are better prepared. According to Gartner, more than two-thirds of CFOs plan either to lead or be significantly involved in a wide range of actions moving forward.

CFOs are changing up where they invest their budgets to cope with what's ahead – technology will be a key 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 on 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, but automation and investment into digital transformation initiatives will put them in the best position to battle against the economic uncertainties ahead of them.