An optimistic future: CFO insights and strategies for 2023 and beyond
As we move deeper into 2023 and approach 2024, the outlook for CFOs is becoming slightly more optimistic. Inflation has been steadily decreasing in the US, and GDP is rising, leading to a more stable environment with US rates 5.3% higher than the pre-pandemic level, while the Eurozone is 2.5% higher. Global supply chain issues have been alleviated to some extent, and technology has allowed new and improved resource management methods.
This has led to a less volatile landscape for CFOs in the upcoming year, though it is important to remain cautious and proactive in their planning against the backdrop of uncertainty. With the use of technology, CFOs will be able to take full advantage of the more favorable economic outlook in 2023/2024.
According to the Deloitte CFO Survey: 2023 Q1, although uncertainty is high, it is at its lowest since pre-pandemic (Q4 2019) times. The key objectives for CFOs remain increasing cash flow, managing the talent shortage, boosting resilience, risk management, and reducing costs.
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Economic outlook for 2023/2024
Any significant changes in the economy and monetary policy in the US do have a trickle effect on other markets. Ongoing challenges caused by the Ukraine/Russia conflict, climate change, and higher energy prices continue to disadvantage Europe. One of the positive signs is the lowering of inflation in the US. This is a relief for CFOs who have been grappling with rising prices and increasing costs over the past year. With inflation expected to peak and then decrease, businesses can expect a little breathing room regarding pricing and profit margins. When inflation is high, it can cause uncertainty and volatility in the market, making it challenging for CFOs to plan and forecast budgets and expenditures. However, the US Federal Reserve is projecting that inflation will gradually decline from around 5% to closer to its target rate of 2% by 2024.
Another positive development is the slight GDP recovery that is expected to continue. While the pandemic has undoubtedly taken a toll on the global economy, GDP is projected to grow over the next few years. This growth can translate to more opportunities for businesses to expand and grow.
Supply chain issues have been a major challenge for CFOs over the past year, but there are indications that these issues are lessening. As businesses adapt to new ways of operating, they are finding ways to work around supply chain disruptions and improve efficiencies through cost optimization. This should provide some relief to CFOs who have been dealing with inventory shortages and delays.
Talk about artificial intelligence (AI) is still trending and may be a beacon of light for CFOs who can harness the technology to help automate financial processes, analyze large volumes of financial data to identify trends and predict future outcomes, identify potential fraud or anomalies, generate more accurate financial forecasts and scenario plans, and identify areas where costs can be reduced, such as inefficient processes, and unnecessary expenses.
Following the results of the Deloitte CFO Survey: 2023 Q1, Ian Stewart, chief economist at Deloitte, said, “The CFOs foresee artificial intelligence helping to drive UK productivity, an outcome that could provide a lasting boost to business growth. They are divided, however, on how AI will affect the number of jobs in the economy, highlighting the need to ensure the gains from new technologies are widely shared.”
The general outlook among CFOs is slightly brighter for 2023/2024. However, there is still a degree of caution given the unpredictability of the post-pandemic environment and the potential for new challenges to emerge. CFOs will need to remain vigilant and adaptable and work to increase the resilience of their organizations to navigate any changes that may arise.
Cautionary notes for CFOs
First and foremost, it's important to remember that uncertainty is still present in the market. While it may not be as acute as in previous years, there are still potential risks and challenges that could impact financial planning. In addition, while inflation is lowering in the US, it's important for CFOs operating in other countries to continue monitoring the situation and planning for potential impacts. Inflation can impact a wide range of financial decisions, from pricing strategies to budgeting for expenses, and it's important to stay ahead of any potential impacts.
And while supply chain issues are lessening, it's still important for CFOs to remain mindful of any potential bottlenecks or disruptions that could impact the flow of goods and materials. This is particularly true for organizations with global supply chains that may be affected by shifting trade policies and geopolitical risks.
The positive GDP recovery is a good sign for CFOs, but it's important to remember that growth can be uneven, and there may still be pockets of the economy that are struggling. CFOS must stay on top of the latest economic data and trends in order to make informed decisions.
Overall, while the outlook for CFOs in 2023/2024 appears slightly brighter than in previous years, there are still challenges and risks that must be navigated carefully. With a degree of caution and careful planning, CFOs can help ensure their organizations thrive in the years ahead.
How Unit4 can help CFOs plan for the future
CFOs need a 360 view across their organizations. Integrating software solutions such as ERP, HCM, and FP&A helps achieve the goal of strategically planning for the future. Our cloud-based software is designed to provide businesses with the tools they need to optimize financial performance and drive growth.
One of the key features is real-time data visibility, enabling CFOs to stay up-to-date with the latest information and trends in the industry. Our platform provides a comprehensive overview of your financial operations, enabling you to make informed decisions based on current and reliable data.
Unit4 FP&A helps you to forecast and predict future outcomes accurately. Our advanced algorithms and machine learning technology analyze data from multiple sources, including historical trends, to produce reliable and insightful predictions.
With Unit4 FP&A, CFOs can create powerful financial models, scenario planning, and budgeting tools. Our software provides in-depth analysis of potential scenarios, enabling you to evaluate various options and identify the best course of action.
