CFOs Will Stay Alert For Risks To Profit Margins As Recovery Unfolds - Old Growth Models Not Applicable
New research from APQC reveals that CFOs feel "a greater sense of urgency" to improve precision in financial performance planning and management
(Houston, TX - August 18, 2009) - APQC, a nonprofit business benchmarking and research firm, has published an article in Financial Executive magazine that offers clues on how chief financial officers (CFOs) will operate in the post-recession era. Read the full article or listen to an audio synopsis at www.apqc.org/finance.
Relying on personal interviews with CFOs and survey findings gathered since June 2009, the article's author, APQC Senior Research Fellow Mary Driscoll, concludes: "Finance executives now want to bolster the speed and precision of performance analyses and forecasts. Looking for signs of revenue quality (read: booked sales that can be recognized and collected), and looking for warning signs of margin erosion, CFOs are asking tough questions about sales pipelines, cost assumptions, pricing, marketing effectiveness, and channel viability."
CFOs are also determined to beef up their analyses of asset utilization—the hope being that business unit managers will gain a fuller appreciation of the true cost of spare or idle equipment and facilities. "Before the slump, capital markets were awash in liquidity and many CEOs were aiming for robust revenue growth globally, often without proper regard for whether profit margins were sufficient and sustainable in discrete world regions. CFOs are now determined to steer major capital investment toward regions and customers that will significantly drive their companies' year-over-year earnings growth," says Driscoll.
On the tactical side, she adds, CFOs are now focused on:
strengthening visibility of customer demand;
maintaining proper levels of free cash flow;
improving working capital management; and
developing planning, budgeting, forecasting, and business analysis capabilities that can help companies anticipate and master fast-moving risks and opportunities.
To learn more about APQC's ongoing research on financial management best practices and process improvement initiatives in the post-recession era, visit www.apqc.org/finance.
APQC is the leading resource for performance analytics, best practices, process improvement, and knowledge management worldwide. The organization's research studies, benchmarking databases, and renowned Knowledge Base provide managers with intelligence to transform their organizations for better results. A member-based nonprofit founded in 1977, APQC currently serves over 750 of the Fortune Global 1000 companies and numerous government organizations. For information, visit www.apqc.org or call +1.713.681.4020.
About Mary Driscoll
Mary Driscoll, senior research fellow for APQC, is an author, editor, and lecturer with expertise in corporate finance and business management. She leads APQC's new financial management best practices research initiative. Previously, she was president of CFO Research, the research services arm of CFO magazine, and spent seven years as a senior editor at CFO, developing features on topics ranging from finance transformation and capital markets to financial management information systems and leadership development.
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