Growth and development will remain the main business priorities for UK CFOs over the next 12 months, but their immediate concerns are how to manage their firm’s balance sheets and how best to control cashflow, according to a new report from leading recruitment specialist Robert Half. However, nearly four in 10 (38%) CFOs questioned indicate that their finance teams lack the time or resources required to support the business.
The Robert Half report, Strategic Priorities for UK Businesses, reveals that over half (51%) of CFOs are increasingly focusing on managing their balance sheets in order to demonstrate to internal and external audiences that the business is well-run and under control – a key process when credit is tight and regulatory reporting stringent. Indeed, almost a third (31%) of CFOs indicate that they are keeping a cushion of higher cash reserves rather than investing revenues or returning monies to investors.
CFOs were asked, “Which, if any, of the following would you say are the three biggest concerns that you currently face in your role?” Their responses:
Managing the balance sheets 51%
Cash flow 42%
Uncertain economic outlook and its effect on forecasting 34%
Access to investment financing 27%
Managing growth 26%
Internal controls 25%
Meeting future finance needs cost-effectively 23%
Keeping pace with information technology 20%
The next biggest concern, cited by 42% of CFOs, is to control cashflow in the face of restrictions in credit and lending. Of those CFOs who cite cash management as their biggest concern, 50% attribute to lower revenues, while a third (33%) put it down to pressure on pricing and margins and 29% say that it is a result of higher costs.
Ashley Whipman, Director, Robert Half Management Resources (UK) said, “The role of the CFO is vitally important as they are increasingly required to understand the business from a strategic perspective. Under this burden, CFOs appear to be concentrating on the business concerns most directly impacting their organisations. Managing the balance sheets and controlling cash flow are essential practices in any economy, but never more important than when the finance team is being charged with driving organisational growth in unstable market conditions.”
However, despite these pressures, the survey suggests that many finance teams are under-resourced and do not include the right mix of skills for strategic and operational requirements. Indeed, many CFOs believe that a lack of commercial and technical acumen is potentially damaging for the business, as is a serious lack of time to do the role effectively.
CFOs were asked, “Thinking about your finance team, which, if any, have a negative impact on your business?” Their responses
Lack of time to complete work and projects 36%
Lack of permanent employees to complete work and projects 19%
Inadequate commercial skills 18%
Inadequate technical skills 13%
Research shows that in addition to their core finance roles, CFOs are expected to understand the business from a strategic point of view, which means that they are often drawn into other areas of the business such as operations, business development and sales. This extra responsibility contributes to the fact that today’s CFOs are spending over one fifth (20.7%) of their time on project management, resulting in increased pressure for financial leaders and their teams.
Ashley Whipman continues, “CFOs recognise that whatever happens in the wider global economy, their own business never stands still. Their role today must therefore cover a strong mix of financial and broader commercial skills and they must be able to manage both day-to-day tasks and project-based work. Many CFOs are finding that engaging senior-level finance professionals on an interim basis is an effective way to manage strategic and complex initiatives while improving efficiencies and supporting business growth.”