The Fastest Growing Challenge of 2023 for CFOs

While CFOs have always had to deal with numerous challenges, the current environment is proving to be exceptionally complex. The global pandemic has disrupted supply chains, led to inflationary pressures, and forced businesses to adopt new ways of operating. These challenges have been further compounded by a range of global poly-crises.

Given this complex landscape, CFOs are under intense pressure to manage a wide range of priorities. They must balance the needs of their shareholders, employees, customers, and communities while navigating a rapidly changing environment. As a result, CFOs must be agile, flexible, and responsive, constantly adapting their strategies and plans to respond to changing circumstances.

In November, Taulia, in partnership with market research agency Opinium, conducted an extensive poll in four key regions (the UK, USA, Germany, and Singapore) to discover the biggest drivers and concerns for financial decision-makers for the year ahead.

The data collected showed that inflation was the highest concern, given the interest rate rises experienced during the end of 2022. With record-high interest rates and rising costs worldwide, businesses were in a precarious position going into 2023. As business expenses increased, financial decision-makers were under immense pressure to maintain existing profit margins.

Interestingly, supply chain disruption emerged as the second biggest concern for CFOs, with three in ten senior financial decision-makers citing a lack of inventory and supply chain disruption as their biggest challenge for 2023. This marks a notable shift from 2022 when supply chain disruption was the fourth biggest concern. It overtook COVID-19 and the implementation of ESG programs in the minds of financial decision-makers. This shift highlights the importance of businesses focusing on their supply chains to ensure operational resilience.

The report also highlights geographical variation, with labor shortages cited as a major concern for German businesses and preparing for new regulation as a key challenge for the UK and the US.

In response to these challenges, many CFOs are taking steps to better manage the unexpected. They are building resilience by developing effective working capital plans that enable them to weather the storm of inflation and supply chain disruptions while continuing to drive growth. This involves optimizing their cash flow, managing inventory levels, and developing strong relationships with suppliers and customers.

Despite the challenges, CFOs remain optimistic about the future. They recognize that the world is changing rapidly and that there are many opportunities for growth and innovation. With the right strategies and plans in place, they believe that they can navigate the current environment successfully, and emerge stronger and more resilient than ever before.

In summary, 2023 is presenting complex challenges for CFOs, and it is crucial that they remain agile and well-positioned to tackle future challenges. The ability to anticipate and manage risks, particularly in relation to supply chains, will be key to achieving resilience and growth.

For more insights, download Taulia’s Working Capital Revolution report.