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  • Preferred Financial Advisor

Challenges of a CFO in Today's Market and How A Fractional CFO from PFA Can Help

Updated: Jul 14, 2023

There's a market shift in the air, where companies have to tighten their belts around general and administrative spending. Macro-economic factors always exist, but it appears to be a growing concern among them in recent surveys. Such a report from CFO.com:

"Nearly half (48%) of the 260 finance chiefs of SMB businesses (revenue between $3 million and $999 million) surveyed by Datarails said they’re currently living through the most difficult challenges they’ve ever faced in their careers — including rising interest rates, inflation, supply chain issues, and geopolitical risks."

With these macroeconomic concerns, CFOs across the country are having to look at their P&Ls by department and see where savings can be found from each business unit leader. As you know, you can't control what the Fed does and it's implications with the respect to inflation nor the other items listed. You have to be able to keep a very lean business and hope that you have kept a fixed leverage business rather than a variable one. Additional notes from the article, at CFO.com, suggests an impending recession:

SMB finance chiefs said their confidence in the economy is very low. According to the Datarails survey, over half (55%) of CFOs believe the economy is directly headed towards a recession or already in one.

The fascinating part of the article is how the other executives within the company see it differently with the survey mentioning that 65 of executives thought the opposite. Our view at PFA is that, generally, CFOs have a stronger sense of how the market will move and how the overall economy will perform in the near future. Sales and Operations tend to look at things in the hear and now and are not concern with the leading indicators for future macroeconomic performance.





Considering this information, this should have owners and board members focusing on how they want to plan for the future and who they should entrust the financial side of it. Enter in the PFA solution of bringing on an expert financial leader in either as a consultant or fractional CFO capacity who has had the experience of restructuring groups, divestment initiatives, seeking synergies between multiple entities or other solutions that yield material expense savings. It's important for companies to consider these variable and controlled cost measures sooner rather than having to take mandatory cuts across departments that might be difficult to replace such talent into the future. It's all about repositioning the company to come out stronger after a recession has had it's full effect.

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