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3 ways CFOs can lead through inflationary times

Jeni Peacock
Published by Jeni Peacock on 1st August 2022
Technology Finance Partner Discussing Business

CFOs are facing multiple uncertainties right now. The IMF has slashed its global growth forecasts. Inflation’s surging, interest rates are rising, and war threatens supply chains and energy markets as well as peace and security.

With the Bank of England forecasting a UK recession in 2023, this challenging environment looks set to continue. However, it’s also true that CFOs are in a unique position to protect and confidently guide their organisations through these challenges. When you combine your financial acumen and experience with effective data and insights, there’s no one better placed to lead a business through difficult times.  

In this article, we take a closer look at three areas where CFOs may need to reconsider their approach in order to lead their company through the chaos

1) Strengthen cashflow management  

Economic downturn and inflation usually mean some belt-tightening and certainly more focus on cost control and budgeting. Right now, the mood in many boardrooms is one of caution rather than panic. According to Ian Stewart, Chief Economist at Deloitte, finance directors are ‘bracing for recession’ but are not in ‘batten down the hatches mode’.

In practical terms what that means is that CFOs are focussing more on three key areas:

  • Ensuring they have a detailed grasp of cost analysis across the organisation
  • Implementing robust approvals processes and workflows to manage expenses
  • Automating as many manual processes as possible to reduce costs, boost productivity and retain skilled people in what remains a tight labour market.

As AccountsIQ’s Chief Revenue Officer, Nick Longden, recently said in AccountingWeb:

“…organisations need more detailed cost analysis than they can get from bookkeeping systems designed for small businesses like Xero and QuickBooks. There’s also a deeper focus on spend management, with companies looking for more robust approvals processes and workflows to manage expenses. That focus isn’t so prominent in good times but it’s increasingly prevalent now.”

2) Boost collaboration

Working in isolation from other parts of the business is no way to operate in periods of uncertainty. Smart finance teams are implementing system integrations beyond finance to include the wider organisation. The pandemic magnified the value of collaborative working and data-informed decision making; now inflation and a possible recession are further highlighting the need for finance to assert control over data and business intelligence.

Restaurant chain, Camile Thai, knew they needed granular business intelligence information from across their entire group to manage their growth sustainably and profitably. They worked with AccountsIQ’s software integrations team to integrate their finance system with MarketMan (a restaurant inventory management system).

“It’s so important to us that AccountsIQ integrates with MarketMan. It means we’ll have detailed information on everything from our stock levels to our most profitable dishes, and we’ll be able to do profit level variance analysis.”

Eoghain Grant, Financial Accountant, Camile Thai

Read our Camile Thai case study.

AccountsIQ enables companies to do detailed cashflow forecasting.  The software also seamlessly integrates with other apps to help finance teams automate and streamline finance processes, reporting, budgeting and forecasting. We also support customised integrations with your in-house systems.

Read more about how working with our Systems Integration Consultants can help you make the most of your accounting software.

3) Adopt a continuous scenario planning mentality

As businesses plan for a future of rising inflation, energy costs and economic uncertainty, one-off budgeting and planning isn’t going to be helpful. Finance teams will need to run multiple potential scenarios and forecasts. For example, if inflation is predicted to hit 10%, what happens to your margins if it’s 11% - or even higher?

In less volatile times, companies often felt they could get by with manual finance processes and spreadsheets. When the pandemic hit, many struggled. Now, market conditions are pushing CFOs to think and act differently.

There’s more of a need to run scenarios and reforecasts, and inform business leaders and budget holders of all possible outcomes. Finance is no longer just about reacting and reporting. It’s also about proactively planning for various scenarios and advising leadership on the best course of action to secure financial stability and be agile enough to adjust to economic shifts.

AccountsIQ integrates with financial forecasting tool, ProForecast. This enables finance teams to bring in data from AccountsIQ, set your budgets/targets, then refresh this data with actuals as often as you want. It’s perfect for those ‘what if’ scenarios because you can see the impact of business changes such as expansion, contraction, price increases, cost increases, or new products, services and markets.

Find out more about financial scenario planning

Read our blog: Expect the unexpected! Why forecasting software integrated with your accounting software can help you in times of uncertainty.

See AccountsIQ in action

Join our next live Demo Webinar on Thursday 25 August 11am.


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