With Recession Pressure Mounting, More Than 1 in 3 CFOs Worry about Paying Employees on Time

Rhea-AI Summary

On February 14, 2023, Coupa Software (NASDAQ: COUP) released its first Strategic CFO survey, revealing that economic uncertainty is prompting CFOs to make trade-offs between cost-cutting and profit-building strategies. Key findings include that 91% of CFOs are focused on hitting sales forecasts in the next 6-12 months, while 42% are concerned about declining profitability. A notable 86% state layoffs are a last resort, with many turning to alternative cost-cutting measures, such as raising prices and renegotiating supplier contracts. Additionally, 46% of CFOs lack visibility into their spend data, complicating informed decision-making. Investing in automation is viewed as critical for navigating economic challenges.

Positive

• CFOs recognize the need for investment in automation to improve financial resilience.
• Survey indicates strong focus among CFOs on achieving sales forecasts, indicating potential business stability.

Negative

• 91% of CFOs are concerned about sales forecasts, indicating potential revenue challenges.
• 42% are worried about declining profitability and margins, which could impact financial health.
• 46% of CFOs lack visibility into spend data, hindering effective cost management.

Coupa's inaugural Strategic CFO survey reveals the tradeoffs CFOs are making between cost-cutting and profit-building strategies to remain competitive

SAN MATEO, Calif., Feb. 14, 2023 /PRNewswire/ -- The imminent threat of a recession is increasing worry among CFOs, forcing them to make short-term business decisions that may significantly impact growth levers for the long-term.

The priority concern is hitting sales forecasts in the next 6-12 months (91%), as well as declining profitability and margins (42%), meeting payroll (39%), and going bankrupt/running out of cash (36%), according to new survey data from Coupa Software (NASDAQ: COUP), the leader in Business Spend Management (BSM).

CFOs will continue to face mounting hardships among today's economic uncertainty and increasingly look to cut costs. Many have already resorted to layoffs, despite 86% saying layoffs are a last resort to cut costs and 87% recognizing layoffs create long-term issues. That's leading CFOs to prioritize alternate cost-cutting measures this year, including increasing the price of products and services sold (38%), enforcing stricter spend rules (33%), and renegotiating supplier contracts (32%).

CFOs Can't Cut What They Can't See

Without a granular level of visibility across a company's entire spend activity, CFOs will not be able to make informed cost-cutting decisions that allow them to stay competitive. Nearly half (46%) of CFOs surveyed suffer from a lack of visibility. They point to critical blockers within their organizations:

• 57% have spend data siloed across multiple systems.
• 44% have extremely labor-intensive processes to gather data.
• Less than half (46%) have proactive and predictive financial forecasting and risk management tools, indicating a majority are ill equipped to plan for the future.

"Economic volatility calls for a strategy of managing costs intelligently, rather than hurrying to cut costs reactively. The ability to do this hinges on having a wealth of data that is accurate and timely to inform decision making," said Tony Tiscornia, Coupa CFO. "Resilient companies use intelligent spend data to execute in the present with urgency, but in a way that reduces the risk of unintended long-term negative consequences."

CFOs Turn to Automation to Boost Profitability

Despite the need to cut costs, CFOs recognize the importance of investing in automation to reach a state of financial maturity to combat disruption and achieve long-term success. 

"Automation technologies allow CFOs to chart a course through the storm and emerge stronger," continued Tiscornia. "With a potential recession on the way, it's absolutely critical CFOs optimize financial health by equipping their organization to respond faster and more strategically to disruption. It's how CFOs will help their companies survive a recession and come out of it ready to accelerate growth."

Read the full report: The Strategic CFO: Maintaining a Competitive Edge in Uncertain Times.

Methodology

The survey was conducted among 600 CFOs and finance leaders (SVPs and higher who report to the CFO) in businesses with over $500M in revenue across Canada, the US, UK, Ireland, France, and Germany. The survey was carried out online with an email invitation between November and December 2022 by Wakefield Research.

About Coupa Software

Coupa is the cloud-based Business Spend Management (BSM) platform that unifies processes across supply chain, procurement, and finance functions. Coupa empowers organizations around the world to maximize value and operationalize purpose through their business spend. To learn more about Coupa, visit coupa.com or follow us on LinkedIn and Twitter.

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SOURCE Coupa Software

FAQ

What did Coupa's Strategic CFO survey reveal?

The survey indicated that CFOs are making trade-offs between cost-cutting and profit-building due to economic uncertainty.

What are the primary concerns of CFOs according to Coupa's survey?

CFOs are particularly worried about hitting sales forecasts (91%) and declining profitability (42%).

How do CFOs plan to manage costs during economic uncertainty?

They are exploring alternatives like raising prices, stricter spend rules, and renegotiating supplier contracts.

What percentage of CFOs lack visibility into spending data?

According to the survey, 46% of CFOs reported lacking visibility into their spend activities.

What role does automation play for CFOs according to the survey?

CFOs view automation as essential for enhancing financial health and navigating economic challenges.