How Finance Directors and CFOs plan to navigate the challenges of 2023

January 26th 2023 | Posted by Laurence Underwood

2023 is set to be a challenging year for Finance Directors and CFOs as they navigate the ongoing impact of the pandemic, high energy costs and borrowing rates, and the economic instability caused by the war in Ukraine.

These challenges can make it difficult for businesses to operate and grow, but experienced finance leaders are well-equipped to tackle these hurdles and have plans in place to mitigate the risks.

Defensive balance sheet strategies

Given the current position of the UK economy, One strategy that many finance leaders are adopting is a defensive approach to their balance sheet, which involves reducing costs and building up cash reserves. This can be achieved through negotiating longer-term contracts with suppliers, cutting production costs, and tightening credit policies with unreliable customers while offering enhanced terms to those who pay early.

This may help businesses to weather potential financial difficulties and protect their bottom line.

Planning to raise capital advantageously

Another significant challenge facing businesses in 2023 is the difficulty of raising capital on favourable terms. With many lenders unwilling to offer beneficial rates, securing the funds needed to operate can be costly.

To overcome this, finance executives are looking to develop long-term relationships with investors and implementing cost-saving initiatives such as energy savings schemes to reduce expenses and improve their chances of raising capital.

They are also working with other senior executives to diversify the business and spread risk to improve stability. This can help to mitigate the risk of financial instability and ensure that the business has the capital it needs to grow and thrive.

Focussing on essential aspects of the business when resources are stretched

In addition to these financial challenges, resource constraints can also present a significant problem for businesses in 2023. Finance executives are central to navigating these issues by utilising their analytical and strategic planning skills to guide the business on a path that focuses on business-critical projects.

By having this focus, limited resources are not wasted on less important projects that can temporarily be put on hold.

They are also investing in software solutions to provide analytical insights, allowing them to spend more time communicating strategies and plans, rather than sifting through data. This can help them to make the most of their resources and ensure that the business is focused on the most important initiatives.

While 2023 will present a number of challenges for businesses, including financial and resource concerns and issues with raising capital, experienced finance directors are well-positioned to navigate the current environment and guide their organisations towards a more stable future. With the right strategies in place, they can help businesses to weather the storm and emerge stronger and more resilient.

If you are a Finance Director or CFO looking for a new role, register with us. If you are an employer looking to hire an FD or CFO into your leadership team, contact us.