2024 - Will It Be The Year of the CFO?

Introduction

As a new year begins, the team at Savant, like all of our clients, seeks to make sense of the economy and draw conclusions about how it will impact our business. With this in mind, I have been taking the time to read various reports and predictions, including a report by PwC, which I have included in this blog.

The conclusion I have arrived at is that the role of the CFO/FD will be of paramount importance in a company's ability to set strategy, and having a strong and knowledgeable CFO in the boardroom could potentially be the difference between success and failure.

The Key Decisions

A CFO's role is arguably more straightforward when the macroeconomic environment is strong. The release of new products or services or the ability to raise funds to support growth is often less complicated.

However, when the economy is facing flat growth, the cost of money is high, and inflation is above normal levels, the CFO and their knowledge become crucial to unlocking opportunities and managing risk.

Key questions include:

• Do we raise prices along with the competition, or look to support an alternative pricing strategy for our products/services?
• Do we look to raise funds or gain financial support as a way of kick-starting sluggish growth, but open up the risk of repayments, or do we "bunker down" and look to ride out the storm while maintaining a status quo and looking towards more risky strategies being employed once the economy begins to turn a corner?
• How does the company balance the collection of cash and the payment of invoices with maintaining good client relationships?
• Does the company look to cut costs through the reduction of staff numbers and risk losing talented people, or "double down," backstaff and ensure that the organization is ready to ride the wave of recovery through their embedded knowledge and skill-set?

The Year of the CFO

A strong, influential CFO who possesses a strategic, commercially-focused outlook will support and advise the board on all of the above. A challenging economy will pose countless other questions. Managing a company during a boom period often relies on strong sales and commercial teams, but the balance in the boardroom changes when the company is managing costs or when delicate and clever pricing decisions need to be made.

If you would like to discuss this article or explore the idea of recruiting an FD/CFO, please contact us here at Savant. We have the experience and market knowledge to help you strengthen your finance team.

PwC Economic Report:

https://www.pwc.co.uk/press-room/press-releases/pwc-uk-economic-predictions-2024.html#:~:text=The%20UK%20will%20be%20the,average%20relative%20to%202019%20levels.