Sales Forecasting

91% of CFOs Concerned with Hitting Sales Forecasts: Weekly Stat

Preservation strategies, an unpredictable labor market, and a looming recession are already impacting 2023’s projections, per a recent report.
91% of CFOs Concerned with Hitting Sales Forecasts: Weekly Stat
Photo: Thomas Barwick

Despite recent widespread agreement a recession would likely occur in 2023, CFOs have shown confidence in their companies’ ability to bob and weave their way through a struggling economy. Despite this confidence, new data suggests that there are multiple financial, social, and technology-induced factors that are making some CFOs already doubt their predictions and goals for the next 6 to 2 months.

Recent survey data from Coupa found that more than nine in 10 (91%) of finance chiefs are already concerned about hitting their sales forecasts this year. The survey was comprised of 500 North American-based CFOs. 

Costs, Growth, and Profitability  

A sense of urgency is undoubtedly being felt by CFOs. Nearly all (93%) of CFOs surveyed by Coupa indicated they were concerned about their company’s performance should a recession occur. Finance leaders identified declining profitability and margins (42%), meeting payroll (39%), and falling behind competition (37%) as their top worries.

To overcome these evolving issues, CFOs are crafting strategies to simultaneously increase profitability and efficiency. While over half (53%) reported basing strategies around both efficiency and digitization, half (50%) of CFOs identified efforts in the ongoing competition for talent, as their talent retention efforts are a part of their plans to increase profitability in 2023.

CFOs report strategizing around avoiding layoffs if at all possible. Nearly nine in 10 (87%) of financial officers said layoffs solve an immediate problem but create long-term challenges.

Despite efforts to increase profitability and efficiency, CFOs are aware that cost-cutting initiatives need to be planned and rolled out. When gauging strategies to drive growth over the next 6-12 months, a third (33%) of CFOs said they would enforce stricter spending rules and limits. Alongside those measures, 32% said they were planning to reduce business travel this year, as the economy continues to impact how executives gauge the value of attending conferences.

Technology Issues and Unreliable Data

According to Tony Tiscornia, CFO of Coupa, using technology for accurate decision-making is paramount for any finance executive looking to overcome both the short- and long-term consequences of a recession. With nearly half (46%) of CFOs telling Coupa they lack visibility into company spending data, a proper tech stack’s value to any CFO is continuing to become a requirement for success.

“Economic volatility calls for a strategy of managing costs intelligently, rather than hurrying to cut costs reactively,” said Tiscornia. “The ability to do this hinges on having a wealth of data that is accurate and timely to inform decision-making. 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.”

Economic volatility calls for a strategy of managing costs intelligently, rather than hurrying to cut costs reactively. — Tony Tiscornia, Coupa

The issues surrounding both the harvesting and accuracy of data hamper many CFOs’ decision-making. While nearly half (44%) of CFOs reported they need multiple systems to access spending data, the same percentages reported the challenging labor aspects around retrieving the data. As CFOs reported waning confidence in their cash flow data late last year, executives may have to revisit the quality of their forecasting fundamentals.

People Problems

The looming economic downturn, combined with the need for quick, accurate decision-making is creating friction in the C-Suite. When asked about tensions with other teams or executives, nearly half (49%) of CFOs named their relationship with their CEO as the tensest. A third (33%) reported tension with their CIO, while more than a quarter reported tension with their CPO. 

The distribution of work among leaders is strongly impacting the comradery in the C-suite, according to the CFOs surveyed. More than four in five (84%) face an increasing amount of pressure from other company leaders to make sacrifices for immediate relief without considering the long-term impacts, per survey data.